INET 2000

Developing Countries Networking Symposium

18 July 2000, Yokohama-Japan

e-commerce in
three landlocked nations*
Michael Minges
minges@itu.int
International Telecommunication Union

* The views expressed are those of the author and may not necessarily reflect the opinions of the ITU, its
members or the countries profiled in this presentation.

Topics
Why e-commerce for developing
countries
Barriers to e-commerce in developing
countries
What kind of e-commerce for
developing countries
e-Strategies

Internet Case Studies

ITU project to examine diffusion
of Internet in developing countries
Americas

Asia

Africa

Bolivia

Nepal

Uganda

www.itu.int/ti/casestudies

Why e-commerce for

developing nations?
Increase sales, generate hard currency,
boost employment and
welfare
Dhaka Shawl
Gain expertise in
Producer in Nepal
collects: US$ 6.60
information
technology, reduce
Consumer in Nepal pays:
brain drain &
US$ 11.00
urbanization
Consumer in USA pays:
Lead to better
US$ 77.00
business practices,
Source: ICIMOD.
enhance
transparency & efficiency

Barriers to e-commerce
Economic, social,
linguistic
Infrastructure
Market size
e-Business costs

GNP per capita

1998, US$
Uganda

$300

Nepal

$200

Bolivia

$1'000

Source: World Bank.

Language & Literacy

Main
#
Country
mother
Langu- Literacy
tongue
ages
Spanish 40%
Bolivia
39
86%
Quecha 37%
Aymara 24%
Nepal
Nepali 58%
124
39%
Uganda Luganda 16%
46
64%
Source:

Ethnologue www.sil.org/ethnologue,
UNDP <www.undp.org/hdro>.

Infrastructure
Bolivia

Nepal

Uganda

67%

15%

4%

Telephone
lines
(Density)

502403
(6.2%)

234668
(1.1%)

59424
(0.27)

Mobile
phones
(Density)

420344
(5.2%)

3154
(0.01%)

87173
(.40)

PCs per
100 People

1.2%

0.27%

0.28%

Households
with
electricity

Internet market
Bolivia

Nepal

Uganda

7/95

7/95

7/95

Number of
ISPs

10

Number of
subscribers
(Density)

25600
(0.32%)

8900
(0.04%)

4100
(0.02%)

Number of
users
(Density)

75000
(0.94%)

35000
(0.15%)

25000
(0.12%)

1.2 up
1.7 down

US$ 37

US$ 38

US$ 146

Internet start

International
bandwidth
(Mbps)
30 hours of
dial-up
Internet

Setting up a web business

Leased
line per
month

Bolivia

Nepal

Uganda

US$
1000
64kbps

US$ 570
38.8 kbps

US$ 250
64kbps

US$ 12 30

US$ 10 /
month
minimum

.np
free

.ug
US$ 50

Web
hosting
per month
Price of
domain
name

.bo
US$ 100

Payment
Limited use of
credit cards for
B2C:
Nepal: High income
level for credit card,
only good in Nepal
and India
Uganda: Cashbased society
Bolivia: Around
200000 cards (2%
of population)

Local sites cannot

process credit
cards

What to sell?
Understand e-commerce categories
Show me the money
Foreigners
Expatriates

Develop areas where there are natural

advantages
Local products and services
Travel

e-commerce dimensions
Domestic
BusinessConsumer
BusinessBusiness
GovernmentBusiness /
Consumer

Foreign

Local business
selling to local
consumers

Local business

Local business

Local business

selling to local
business

selling to foreign
business

Government

Export-related

applications

documents

selling to foreign
consumers

Tourism
Bolivia

Nepal

Uganda

Lake Titicaca
Mt. Everest
Source of Nile
Eco-tourism
Buddha Birthplace Mountain gorillas
434000 tourists* 435000 tourists* 238000 tourists*
13% exports*
11% exports*
22% exports*

http://www.mcei.gov.
bo/web_mcei/Turismo/
turismo.htm

http://www.
welcomenepal.com

* 1998. Source: World Tourism Organization.

http://www.utbsite.com

Mikes B2C tourism ecommerce experiences

Hard to locate
information
Pricing not
transparent
Could not place
reservation from
web form
Clunky
compared to
big hotel chain
websites

www.yakandyeti.com

www.nilehotel.com

Bolivian B2C
Many developing countries suffer from e-commerce
logistical deficiences such as billing & shipping
A big barrier is the
lack of support for
credit card payment
One way around this
hurdle is to host the
site overseas
For example Boliva
Mall which sells local
products aimed at
expatriates as well as services such as local
flower delivery
www.boliviamall.com

Gurkhas & Pashmina

One of Nepals most famous
exports is Pashmina shawls.
Dozens of web sites advertize
Pashmina wool products.
However no Nepal located site
accepts credit cards.
www.huikaipashmina.com

Nepalese Gurkhas have served as

reknowned soldiers abroad for
over 200 years. Ex-Gurkha
servicemen are leveraging that
image and using the Internet to
locate overseas jobs for their
countrymen.

www.nepalonline.net/gurkhamanpower

Selling stamps in Uganda

Uganda Post
Office is
advertizing
stamps on its
web site
Many
requests from
overseas but
payment
must be
made off-line
http://www.ugandapost.com/

One group does it all

In many developing countries, large groups
dominate a significant
portion of private
economy
If they can be brought
online, significant
boost for e-commerce
Madhvani Group
Uganda
Largest private
investor
http://www.madhvani.org
Over 20 companies

Government2Business
Significant portion of population in Bolivia,
Nepal and Uganda is rural
Governments
should
assist
e-commerce
applications
for farmers
Product prices,
input costs,
transport schedules, weather reports
M.S. Swaminathan project in southern India

Strategies
Act now not later. Amazon.com did not wait
for perfect legal framework!
Build professional looking sites with good
payment and fulfillment process to make
web pages indistinguishable from 1st World
sites.
Take advantage of free software and
applications and support from bi-lateral and
multi-lateral agencies.
Government should endorse directories
and develop relevant local applications
Be different.

The end
Selected references
ITU Internet Case Study site: www.itu.int/ti/
casestudies
UNCTAD e-commerce publication: www.unctad.org/
ecommerce/building.pdf
IDRC e-commerce project for Uganda: www.idrc
.ca/reports/read_article_english.cfm
?article_num=451
Nepal e-commerce presentation:
www.unctad.org/ecommerce/colombo/nepal/sld001.
htm
eriSign small business e-commerce support:
www.internet-trust-services.com/customers/smallbusiness.html