Impact of e-commerce on

developing countries
Honghong Sun
Avinash Tatineni
Jun Tu
Prudhvi Nag Valluru

Outline of Our Presentation

Impact of E-Commerce to Retail Market in

China

Internet Fraud on Developing Countries

Impact of E-Commerce on Import & Export

Impact of E-Commerce on IT Development

E-Tourism on Developing Countries

Impact of E-Commerce on
Retail Market in China

The Development Environment

of E-Commerce in China

China is the world's fastest

growing major economy
Total internet user in
China:123.00
million
China:
(CNNIC,2006)
Trading volume of E-Commerce in
China: 553.1 billion yuan (=70.4
billion US $)
B2B(98%):542 billion yuan
B2C & C2C(2%):11.1 billion yuan

Characteristics of Retail Market

in China

Huge retail market:950 billion US $

and High growth rate:13%
Most of retailers in China dont have
substantive investment in B2C ECommerce
A large number of transnational retail
enterprises have invested in China's
retail market

Opportunity to Retail
Enterprises by E-Commerce:
Reduce costs
effectively

Give the retail enterprises

more information to
procure products in the
world-wide
Reduce the size of
entitative shop
Reduce the cost the cost of
storage and transport of
goods

Opportunity to Retail
Enterprises by E-Commerce:
Expand Market
Shares
Expand B2C market to compete
Expand B2C market to compete
with C2C websites (Its nearly
like a virgin market in China!)
According to know the special
needs of customers through the
internet, provide customers with
personalized services
Most of the internet users are
young high-educated people
(Potential purchasing power)

Challenge to E-Commerce
Retail Market in China :
Credit System

Most of Chinese(84%)
prefer Face-to-face
transactions to online
transactions
The modern credit
system
has developed slowly in
China (Only a few people
have credit card)

Challenge to E-Commerce
Retail Market in China:
Security
Mechanism

Laws and regulations

on online transactions
are incomplete
Concerns about the
security technology of
online transactions

INTERNET FRAUD

WHAT IS INTERNET FRAUD ?

The term Internet fraud refers to any type of fraud

scheme that uses email, web sites, chat rooms or
message boards to present fraudulent
solicitations to prospective victims, to conduct
fraudulent transactions or to transmit the
proceeds of fraud to financial institutions or to
other connected with the scheme.

Major Types of Internet Fraud

Auction and Retail Schemes Online.

Business Opportunity/"Work-at-Home" Schemes Online.

Identity Theft and Fraud

Spam Mails.

Credit-Card Schemes
2003

Other Schemes

NO, no more spam! (c) John Coppens

Impact of this on developing countries: How ?

Example: Impact on ISPs

Bandwidth costs = USD 600 / MB / month

Bandwidth consumption for mail = 70 MB / day
Incoming mail rejected as spam = 80%
Percentage of accepted mail that is spam that gets
past
filters = 15%
Monthly bandwidth cost of spam = USD 6300
Monthly storage cost of spam = USD 5400
Monthly salary expenses for mail / abuse
administrators = USD 75,000
Plus the costs of support for users upset at being
spammed

ACTION REQUIRED BY DEVELOPING

ECONOMIES AGAINST SPAM

Putting in place technical solutions

Open Source software solutions
Formation of CSIRTs and CERTs

Computer Security and Incident Response Teams (CSIRTs) or

Computer Emergency Response Teams (CERTs)
Training of ISP personnel in security and spam handling
Anti-spam policy setting and enforcement for ISPs

What to do when I get effected with the fraud ?

Report immediately to the concerned officials or

to security alert teams or Anti-fraud agencies.

Impact of e-commerce on IT
development on Developing Countries
1.

Governments will need to invest a great number of

money in IT development, because e-commerce is
not advanced in developing countries. In China, the
report from CCW Research shows that the
government invests 34.5 billion yuan (about 2.3
billion pounds) in 2003. Compared with 2002, the
investment increased by 15.0%. The investment in
2004 increased by 15.9%.
picture1

Picture 1 shows that rate of hardware ,software and

service change in china from 2002 to 2004.
2. Development of e-commerce needs
a lot of IT employers. A research from
the biggest software organization in
India shows that the number of IT
employers increased 24.5% in 2003.
Meanwhile it is predicted that the number
of IT employers will be 1.1 million in 2008.

Impact of e-commerce on import and

export on Developing Countries

Import and export corporation can get feedback from

customers in other countries by e-mail. This can help
Import and export corporation know what they need to
do.
Global e-commerce increased from 0.6 billion dollars to
66.5 billion dollars between 1996 and 1999. The number
of this increased to 1317.3 billion dollars in 2003. We can
know from these figures that e-commerce becomes more
important in our lives.

eTourism, What is it?

A dynamic interaction between Information &

Communication Technologies (ICTs) and
Tourism exists. Each transforms the other
eTourism unites Business Management,
Information & Communication Technologies
(ICTs) and Tourism
ICTs are applied to tourism processes to
maximise efficiency and effectiveness of the
organisation

The eTourism concept and eTourism domains (Buhalis 2003)

Business
Management
Marketing
Finance

eTourism
IT / IS
Information systems
Information
Communications
technologies
Telecommunications

Tourism
Transport
Travel
Hospitality
Leisure
Heritage

E-Tourism in developed countries

1.Tourism in U.S is mainly domestic and 90 percent pf tourism sales
are made through online
2.Travel is largest source of bussiness to consumer revenues with
$52.4 billion in 2004 and is predicted to reach over $119 billion by
2010
3.The top 3 U.S online travel agencies,Expedia,Travelocity,Orbitz all
owned by Cendant corp.,comprise about 77 percent of market.
4.Development of online booking,gross booking at expedia increased
by 578 percent from $1793 million in 2002 to $10,364 million in 2004
5.In Europe,Opodo and Travelocity represents 60 percent of entire
online market
6.The European online travel market grew by 51 percent to reach
$23.3 billion in 2004 and estimated to grow to $49.9 billion by this year

E-Tourism for developing countries

1. Tourism in Asia mainly intraregional(78 percent of
international tourism arrivals)
2. The international tourism arrivals in Asia and Pacific
reaches 147 million in 2004 and has recorded higher
growth than in Europe and North America
3. The spectacular growth of China interm of international
tourism arrivals is the key factor in rise of tourism in
EastAsia
4. According to WTO,china will establish itself as the first
tourism destination by 2020.

The main objectives of a DMS are the following:

To collect, manage and distribute information on tourism products to a
larger proportion of consumers and tourism distributors throughout the world;
To develop an integrated tourism product and service offerings;
To provide up-to-date and attractive tourism information and products
according to the countrys interests;
To allow consumers to easily make a reservation and quickly receive a
confirmation;
To reduce marketing costs compared with traditional channels (such as
printed material);
To collect information on customers and to design marketing strategies for
different market segments.