Bringing SMEs onto the e-commerce highway
ITC publication explores transformative effect of e-commerce sets out challenges and opportunities for SMEs
E-commerce across borders is transforming the business world in developed countries – a trend that could galvanize small firms in developing countries and help them leapfrog into global markets. But if these SMEs are to seize the opportunities, several key policy challenges have to be addressed, as outlined in a new International Trade Centre (ITC) report launched in China last week.
The report, Bringing SMEs onto the e-Commerce Highway, was launched on Saturday 28 May at the China Beijing International Fair for Trade in Services (CIFTIS), during a high-level forum on E-Commerce Dialogue: G20 Policy Options, which ITC has organized with the China Council for the Promotion of International Trade (CCPIT) and B20 China.
The report examines challenges in the four components of e-commerce: establishing online business, international e-payment, international delivery, and aftersales. It gives examples of best practices and provides a checklist for success.
‘New rules and regulations at the national level require international solutions when e-commerce crosses borders,’ said ITC Executive Director Arancha González. ‘And while e-commerce provides opportunities for the inclusion of developing-country SMEs in global markets, support is often needed to translate them into realities. Closing the digital gap between the rich world and the poor world, and between SMEs and large firms – particularly in developing countries – is critical.’
‘This publication is meant as a starting point for business-government dialogue to address e-commerce bottlenecks, especially for small firms in developing countries,’ Ms González added.
At the firm level, the report finds that competitiveness depends on being tech-savvy and dealing directly with foreign customers. A competitive business environment depends on affordable Internet access, access to online e-commerce platforms, access to international e-payment services, and access to express delivery services.
Both domestically and internationally, e-signature recognition is crucial, as is consumer and data protection. These points are driven home by four young e-entrepreneurs from developing countries, who describe in their own words how their businesses were helped, or hindered, by national and international e-commerce policies. These business people, whose stories helped them win an ITC contest for developing-country e-commerce exporters, are sponsored to participate in the Fair, where the ITC publication is being launched.
The report closes with a global overview of cross-border e-commerce and detailed e-commerce country profiles in the BRICS and three emerging markets. While the main features of each market vary, as does the regulatory environment, the key challenges – from intellectual property protection and taxation to logistical hurdles and restrictions on e-payments abroad – are largely shared by them all.
Another common thread is the reliance largely on national platforms, as opposed to the international platforms that have proven far more lucrative elsewhere. Access to the latter is hampered in many cases by restrictions on international e-payments that are imposed by the international platforms themselves, as well as by national financial regulations.