Developing Countries - World Trade Organization
e-commerce indeveloping countriesOpportunities and challenges forsmall and medium-sized enterprises
World Trade OrganizationThe World Trade Organization is the international body dealing with the global rules of tradebetween nations. Its main function is to ensure that trade flows as smoothly, predictably and freelyas possible, with a level playing field for all its members. The WTO aims to place developingcountries’ needs and interests at the heart of its work programme.What is e-commerce?For the purposes of the trade focus of this brochure, e-commerce is the sale or purchase ofgoods or services conducted over computer networks by methods specifically designed forthe purpose of receiving or placing of orders. Even though goods or services are orderedelectronically, the payment and the ultimate delivery of the goods or services do not have to beconducted online.An e-commerce transaction can be between enterprises, households, individuals, governments,and other public or private organizations. Included in these electronic transactions are ordersmade over the web, extranet or electronic data interchange. The type of transaction made isdefined by the method of placing the order. Normally excluded are orders made by telephonecalls, fax or manually typed e-mails.Workshop on E-Commerce, Development and Smalland Medium-sized EnterprisesA workshop at the WTO on 8 and 9 April 2013 highlights the relationship between e-commerceand development and examines how small and medium-sized enterprises (SMEs) in developingcountries have been using e-commerce to promote, market, service and sell their productsnationally and abroad. The workshop focuses on both the opportunities and the challengesfacing developing countries and assesses how such issues concerning adequate levels oftelecoms infrastructure, regulation and investment either help or hinder SMEs from finding newopportunities through e-commerce.This document has been prepared under the responsibility of the WTO Secretariat and is withoutprejudice to the positions of WTO members and to their rights and obligations under the WTO.
1IntroductionMany small and medium-sized enterprises(SMEs) in developing countries have thepossibility to benefit enormously from mobiletelephony, the internet and other forms ofinformation and communication technology(ICT) in their day-to-day business activities.This has already resulted in enhancedproductivity in a number of areas.However, SMEs in these countries arenot always maximizing the use of ICT.Governments and their partners, including theprivate sector, need to take greater advantageof the opportunities emerging in the newICT landscape. Also, governments need toensure that users benefit not only from beingconnected to the internet but also from anytechnological evolutions that increase thespeed of data flows and that can help reducecosts to consumers.E-commerce and SMEsIn both developed and developing countries,SMEs make up a majority of business and employthe majority of workers in both manufacturingand services sectors. SMEs cater mostly to theirdomestic market and their contribution to GDP,although normally very small, can vary greatlydepending on the value of the goods or servicesthey produce. While less than 6 per cent of theformal work force is employed in manufacturingin SMEs in Azerbaijan, Belarus and Ukraine, thisshare is more than 50 per cent in other developingcountries such as Ghana, Turkey and Ecuador.Research has indicated that countries withlarge SME sectors also tend to benefit from thesignificant contribution which SMEs make to GDP.A study by the United Nations Conference onTrade and Development (UNCTAD) has shownthat SMEs, while generally lagging in ICT, havethe most to gain from increases in productivitythanks to e-commerce. SMEs, however, actuallyrun the risk of missing opportunities in bothproductivity and profitability by not engaging ine-business. SMEs also have a large role to play inthe economies of developing countries becauseit is these same countries that have the greatestpotential to benefit from e-commerce. The extentof ICT use by SMEs is dependent on both sectorand size of the business. Typically, those SMEswhich are export or import-oriented as wellthose involved in the tourist sector have strongerincentives to invest in implementing ICT in theirrespective businesses.E-commerce has been hailed by many as anopportunity for developing countries to gaina stronger foothold in the multilateral tradingsystem. E-commerce has the ability to play aninstrumental role in helping developing economiesbenefit more from trade. Unlike the requirementsnecessary to run a business from a physicalbuilding, e-commerce does not require storagespace, insurance, or infrastructure investment onthe part of the retailer. The only pre-requisite is awell designed web storefront to reach customers.Additionally, e-commerce allows for higher profitmargins as the cost of running a business ismarkedly less.Another advantage provided by e-commerceis that it allows for better and quicker customerservice. In some cases, customers could havedirect access to their own personal accountsonline and can avoid calling companies on thephone. This can save both time and money.Adding customer online services such asovernight package delivery services can alsohave commercial benefits. These can becomplemented by package tracking serviceswhich allow customers to check the whereaboutsof their packages online. This helps provide goodlevels of customer satisfaction with very littleeffort from the side of the business.
E-commerce in developing countriesOpportunities and challenges for small and medium-sized enterprises2Growth of the internetChart 1Number of people using the internet, 2029.125.512.410CIS*WorAldrabStatesAPa siaci &ficAfricamer Tic heasrope0AUNCTAD’s recent Information EconomyReport 2010 shows how ICT use by microenterprises and SMEs has improved not onlybusiness performance but has helped improvelivelihoods in some of the world’s poorestregions and communities. Many entrepreneurs indeveloping countries now have a real possibilityto benefit from ICT in their business activities.In many cases, this has resulted in gains inenhanced productivity.Chart 2Individuals using the internet per100 inhabitants, 2011EuThe first decade of the new millennium witnesseda profound change and dramatic increase in theway business and trade takes place electronically.Each day, more users in least-developed anddeveloping countries are accessing the internetthrough terminals. A growing percentage ofusers are now also accessing the web throughmobile technology. It is predicted that the internetand especially the use of mobile applicationswill expand exponentially in the decades ahead.There is enormous potential for using ICT tocontribute to the social and economic progress ofdeveloping countries worldwide. A key role in thisregard is played by SMEs.* Commonwealth of Independent StatesSource: ITU World Telecommunication / ICT IndicatorsdatabaseBy improving communication channels, bothdomestically and internationally, the applicationof relevant ICT can greatly enhance thecompetitiveness of business. Governmentefforts to further improve, upgrade and expandICT use by the private sector should, therefore,be reinforced. UNCTAD’s study finds thatgovernments and their various partners, includingthe private sector, are far from taking fulladvantage of the opportunities that are emergingin the new ICT landscape. This is evident in partfrom the relatively limited attention that has beengiven to ICT in strategies aimed at promotingprivate sector development.Of all the internet users in 2011 (see Chart 1),1.3 billion were from the Asia-Pacific region, theMiddle East, Africa or Latin America, indicatinga shift in the regions with the most peopleonline. However, in spite of this growing trend ininternet use, developed countries still continue tosurpass developing countries in terms of numberof connections.1,5001,000500Source: International Telecommunication Union Chart 2 highlights the number of individuals usingthe internet per 100 inhabitants. While the Africaregion has a penetration rate of 12.4, Europehas the highest penetration rate, with 68.4 out ofevery 100 Europeans having access.
3Growth of e-commerceThere is no question that e-commerce has grownrapidly since the first users started to browse theworldwide web in search of goods and services.Today, sales realized over the internet representa significant proportion of overall commercialsales. In 1991, the internet had less than 3 millionusers around the world and its application toe-commerce was non-existent. Almost a decadelater, by 1999, an estimated 300 million usersaccessed the internet and approximately onequarter of them made purchases online fromelectronic commerce sites, worth approximatelyUS 110 billion. This year, global business-toconsumer e-commerce sales are set to pass theUS 1.25 trillion mark.B2B, B2C or B2G?There are numerous types of commercialtransactions that occur online, from buying goodssuch as books or clothes to purchasing servicessuch as airline tickets or making hotel or carrental reservations. Since the main focus of thisbrochure is on how SMEs use the internet, thediscussion here concerns only a few serviceswhich relate closely to SME economic activity.These include electronic communications in thearea of business to business (B2B), business toconsumers (B2C), business to government (B2G)and mobile e-commerce.Business to business (B2B)B2B is e-commerce between businesses suchas between a manufacturer and a wholesaler, orbetween a wholesaler and a retailer. This is theexchange of products, services, or informationbetween businesses rather than betweenbusinesses and consumers.Global B2B transactions comprise 90 per cent ofall e-commerce. According to research conductedby the US-based International Data Corporation(IDC), it is estimated that global B2B e‑commerce,especially among wholesalers and distributors,amounted to US 12.4 trillion at the end of 2012.If the expansion in e-commerce continues at thisrapid pace in developed markets as is expected,B2B and B2C e-commerce transactions willaccount for about 5 per cent of all inter-companytransactions and retail sales by 2017.Business to consumers (B2C)B2C e-commerce entails businesses selling tothe general public, typically through cataloguesthat make use of shopping cart software.Although B2C e-commerce receives a lot ofattention, B2B transactions far exceed B2Ctransactions.
4E-commerce in developing countriesOpportunities and challenges for small and medium-sized enterprisesAccording to the IDC, global B2C transactionswere estimated to reach US 1.2 trillion atthe end of 2012, ten times less than B2Btransactions. Although B2C e-commerceaccounts for only a small share of e-commerceas a whole, it continues to grow. B2Ce-commerce is highest in Norway, Denmark,Sweden, the United Kingdom and theUnited States and covers mainly computerrelated products, clothing and digitized products.Despite the low value of its transactions, B2Ce-commerce has received the most attention,partly because issues such as consumer trustand data protection have received considerableconcern from policy makers.Business to government (B2G)Business to government (B2G) commerce isgenerally defined as e-commerce betweencompanies and the public sector. It refers tothe use of the internet for public procurement,licensing procedures, and other governmentrelated operations.In B2G e-commerce, the public sectorgenerally assumes the pilot role in establishinge‑commerce in an effort to make its procurementsystem more efficient. The size of the B2Ge‑commerce market as a component of totale-commerce is still rather insignificant asgovernment e‑procurement systems still remaincomparatively undeveloped.
5Accessing the worldwide web throughmobile telephonyThe most popular ICT in developing countriesand one which is progressing very rapidly inAfrica and Asia, in particular India, is the mobilephone. Mobile phones are increasingly playinga larger role in the expansion of e-commerce indeveloping countries, especially among userswithout terminal connections.Chart 3 shows that in the past ten years, mobilecellular subscriptions in developing countrieshave increased nearly tenfold. Not only have theyhelped to improve how businesses are run, theyare also helping to close the poverty gap. Mobilephones are making it possible for rural farmersto engage in mobile money services, allowingthem to open saving accounts, earn interest ontheir deposits and access a variety of credit andinsurance products.In many developing countries, mobile phones arestill mostly used for voice communication andtexting. Recently, however, they are increasinglybeing used for data applications such asm-commerce and m-banking. In a number ofAfrican countries, notably Kenya, South Africa,Tanzania and Zambia, mobile telephones arebeing used to do personal banking services.Entrepreneurs are using calling and textingservices to acquire locally relevant informationand services. In the near future, internet-enabledphones may help to deliver the same services butmore efficiently. Micro enterprises and SMEs, manyof which are in the informal sector in developingcountries, appear to be the most positively affectedby the adoption of mobile telephony.What are the prospects ofthe global mobile market?Developing countries – particularly major emergingeconomies – will continue to drive growth of theglobal mobile phone market. This is due to theirlarge population, low penetration rates and risingdisposable incomes although the true growthpotential depends also on government policies tohelp liberalize the market and enhance competitionamong network providers.During 2011-20, the number of mobilesubscriptions in Africa and the Middle East isforecast to grow at an average rate of 5.6 percent per year, compared with the global averageof 3.7 per cent. However, the expected growthin Africa and the Middle East is from a relativelylow base: in 2010, the mobile penetration rate inAfrica stood at 56.5 per cent of the population.Chart 3Mobile-cellular subscriptions per 100 loping4020Source: ITU World Telecommunications/ICT Indicators 020In the agriculture and fisheries sectors in Asiaand Africa, for example, mobile phones are nowfrequently used to conduct sales and purchases,to establish delivery times and destinations andto negotiate prices. While these are classictransactions normally carried out over personalcomputers, they are being done on location usingmobile technology. For fishermen, mobile phonesare regularly used to check weather reports andto receive early warning announcements of severeweather conditions on land or at sea.
6E-commerce in developing countriesOpportunities and challenges for small and medium-sized enterprisesThe Asia-Pacific region will continue to be thelargest regional mobile phone market, with3.9 billion subscriptions in 2020 (up from 2.4billion in 2010). China will continue to be hometo the world’s largest number of mobile phonesubscriptions, with 1.3 billion subscribers in 2020(up from 839 million in 2010).However, India – currently the world’s secondlargest mobile phone market – will have significantgrowth potential not only in the Asia-Pacific regionbut globally, with the number of mobile phonesubscriptions forecast to grow at an averageannual rate of 5.7 per cent during 2011-20, toreach 1.1 billion in 2020. From a luxury productused primarily in developed countries, mobiletelephony has become universally available. It isnow an integral part of life for many.Meanwhile, in the developed world, thecommercial deployment of next-generationtechnologies and devices will increase usageof advanced mobile services, which in turnwill open up many new, e-commerce businessopportunities and especially in developingcountries. Meanwhile, more data applicationsare now regularly being used in developingcountries to conduct business (m‑commerce),engage in retail or commercial banking activities(m-banking) and to find work (m‑labour).Mobile phonerevolutionThe number of mobile phonesin use worldwide between 2000and 2012 grew from less than1 billion to more than 6 billion.The mobile revolution istransforming livelihoods, helpingto create new businesses,and changing the way wecommunicate, work and earnand spend income. The mobilephone network is already “thebiggest machine” the worldhas ever seen, and now thatmachine is being used to deliverdevelopment opportunities ona scale never before imagined.During this second decade ofthe new millennium, maximizingthe potential of mobile phonesis a challenge that will engagegovernments, the privatesector, and the developmentcommunity alike.Source: World Bank, Information andCommunications for Development 2012:Maximizing Mobile
7How do poorer countries benefit frommobile telephony?Mobile technology can be utilized by SMEsoperating in the agricultural and fisheriessectors. It also has uses for labour and transportmobilization, for micro‑credit services and formobile money. This section provides an overviewas to how mobile technology is being used bySME business operators in various sectors indeveloping countries.AgricultureGreater productivity can help boost farmers’income, especially for small-scale farmers andfishermen, who have limited resources to growand market their produce. Creating a moreefficient value chain at local or national levelsalso requires engaging many stakeholders, fromfarmers growing crops and raising cattle tosuppliers and distributors.Farmers in developing countries are increasinglyutilizing mobile technology to increase theircommercial potential. According to a World Bankstudy released in 2012, the benefits for farmerswho use mobile phones includes access toagricultural information concerning stock piles andprices, data visibility for value chain efficiency andbeing able to tap into new and existing markets.When farmers have access to information aboutprices and stocks, it helps them to reduce therisk of under‑selling and of either over or undersupplying their crops in a given market. The WorldBank study shows that access to price informationby farmers has helped to increase farming incomeby 24 per cent. Sellers realized even greater gainsof up to 57 per cent, with overall price reductionsfor consumers of around 4 per cent.Information transmitted by mobile phone alsoincludes access to early warning systems tomitigate the risk of losses due to extreme weatherconditions or to the spread of disease.Online data and informationservicesMobile services can also enable better accessto markets and other value-chain stakeholders.Sellers are increasingly using their websites torelay online information on transport and logistics,with some of these services being provided onmobile phones.For example, through the use of voice andSMS in Morocco, farmers coordinate with localtruckers to improve product transport and toidentify where the best locations are for them todeliver their products. Some farmers also makeuse of two-way trade by bringing products backfrom larger, regional markets to sell in their ownrural communities.Case studySara Maunda, groundnut farmerMalawi“In June 2011, a grain trader arrived at my gateoffering me 30 kwacha per kilo for my peanuts”,Sara Maunda said. “My SMS from Esoko told methat the price was more than four times the trader’sprice. When I showed him, he said, ‘These peopleare lying to you — you will go very far and find thatyou have lost money.’”Maunda trusted both her instincts and the textmessages. She and four neighbours rented a pickup truck in Madisi, the nearest town, and headedsouth to Lilongwe, 80 kilometres away, to sell theirgr
World trade organization The World Trade Organization is the international body dealing with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible, with a l
4 5 TRADE AND PVERT REDCTIN NEW EVIDENCE OF IMPACTS IN DEVELOPING COUNTRIES TRADE AND PVERT REDCTIN NEW EVIDENCE OF IMPACTS IN DEVELOPING COUNTRIES Trade and Poverty Reduction: New Evidence of Impacts in Developing Countries: Introduction and Overview 1 The chapters for this report were selected following a call for papers by the WTO and World Bank that provided new empirical work on the trade .
101 Manuel O. Asitimbay World Trade Center 102 Gregg A. Atlas World Trade Center 103 Gerald Thomas Atwood World Trade Center 104 James Audiffred World Trade Center 105 Louis F. Aversano, Jr. World Trade Center 106 Ezra Aviles World Trade Center 107 Sandy Ayala World Trade Center 10
The World Trade Organization (WTO), headquartered in Geneva, seeks to supervise and liberalize international trade. It's153 members account for 97% of world trade. It regulates trade between members; provides a framework for making trade agreements; and offers a dispute resolution process. Seeks to enhance trade involving poorer countries, but
The World Trade Organization deals with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible. About this publication World Trade Statistical Review provides a detailed analysis of the latest developments in world trade.
World Trade Report 2015 Speeding up trade: benefits and challenges of implementing the WTO Trade Facilitation Agreement ISBN 978-92-870-3985-9 The WTO Trade Facilitation Agreement (TFA), which was agreed by WTO members at the Ministerial Conference in Bali in December 2013, is the first multilateral trade agreement
Map of World Trade: Gravity European and U.S. Trade Trade within Europe is the largest, about 28% of world trade. Many countries Easy to ship between countries because import tariffs are low European Union (EU) countries have zero tariffs on imports from each other. EU has 25 members with two more joining in 2007.
240 Klaus Bothe World Trade Center, Flight 175 Passengers 241 Carol Marie Bouchard World Trade Center, Flight 11 Passengers 242 J. Howard Boulton World Trade Center 243 Francisco Eligio Bourdier World Trade Center 244 Thomas Harold Bowden, Jr. World Trade Center 245 Donna M. Bowen Pentagon 246 Kimberly S. Bowers World Trade Center
Playing Guitar: A Beginner’s Guide Page 7 Practicing Here are a few notes about how to approach practicing with the best frame of mind. First, don’t hurt yourself, especially when you’re just starting.
