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Electronic commerce (e-commerce) is increasingly discussed and written about in today’s knowledge-based economies. Although there are currently no internationally agreed-upon definitions of e-commerce, the OECD (Organization for Economic Co-operation and Development) defines e-commerce transactions as: the sale or purchase of goods or services, whether between businesses, households, individuals, governments, and other public or private organisations, conducted over computer-mediated networks. The goods and services are ordered over those networks, but the payment and the ultimate delivery of the good or service may be conducted on or off-line.¹ The concept of e-commerce extends into communications, promotion, customer service, statistics, and usage patterns. However, often overlooked when examining e-commerce acceptance or failure is the social and cultural impact of conducting conventional business transactions over the Internet.

The absence of an agreed-upon definition for e-commerce creates a challenge when comparing e-commerce modalities in different countries. For some people, e-commerce is limited to credit-card transactions that take place over the Internet. For others, e-commerce means using any electronic device to purchase goods or services. The entire e-commerce process is complex and requires meticulous and well-informed planning to succeed. Businesses need to look beyond issues such as what products and services to offer, how to design and maintain a portal, and how to handle security issues. They must closely examine less tangible, but equally important issues, such as social and cultural norms in the region; sustainable funding strategies, and the formation of strategic partnerships.

E-Commerce in the Asia-Pacific Region

The Asia-Pacific region is an extremely diverse testbed for e-commerce because of its different levels of economic, political, and technological expertise and stability. Overall, the number of e-commerce transactions has been increasing since the late 1990s; however, many of these transactions are concentrated in a handful of countries. The Asian e-commerce landscape is far from evenly distributed. Japan, the world’s second biggest economy, is responsible for more than $27 billion of online revenues within the region, or approximately 70 per cent of the total.

Research on E-Commerce

The International Development Research Centre (IDRC) is a Canadian public corporation that has been helping developing countries to use science and technology to find practical, long-term solutions to the social, economic, and environmental problems since 1970. The e-commerce paradigm is compelling to IDRC, as the Centre actively supports research into innovations that can contribute to the knowledge and information economies of developing countries.

The e-commerce issues examined by IDRC’s Pan Asia Networking (PAN) programme range from providing electronic payment systems and authentication to studying the policy environment within which e-commerce activities are conducted. By supporting research in countries that did not have e-commerce infrastructure and policies, PAN is able to help local research teams examine the obstacles and issues that are encountered when piloting such a unique business model. This book discusses the experiences of four e-commerce research projects supported by PAN in Asia.

PAN Regional E-Commerce Mall

The PAN e-commerce mall is a not-for-profit e-commerce portal <www.panaseanemall.org> that serves the development community in the Asia-Pacific region. This initiative was the first of its kind in the region to successfully confront the issue of secure electronic payment. With contributions from thirteen countries in the region (Bangladesh, China, India, Indonesia, Laos, Malaysia, Mongolia, Nepal, Pakistan, the Philippines, Singapore, Sri Lanka, and Thailand) in the form of arts and crafts, publications, videos, and CD-ROMs, this truly regional e-commerce site has been in operation since June 2000. The PAN e-commerce mall is part of a larger undertaking — the ICT4D (Information and Communication Technologies for Development) Collaboratory, hosted at the ASEAN Foundation in Jakarta, Indonesia <http://www.ict4dasean.org />.

India: Direct Marketing of Artisanal Products

Indiasocial.org uses information and communications technologies (ICTs) to create a bridge between artisanal clusters in India and their potential markets. These previously isolated groups can now build on local knowledge and use ICTs to develop a comprehensive, cost-effective way to market their products globally. Four clusters of artisans participated in this pilot project. The report outlines the steps taken by Indiasocial.org to introduce e-commerce to theese isolated communities and discusses some of the project’s successes and failures. Four pilot sites have been established <http://www.moradabadcluster.org; http://www.saharanpurcluster.org; http://www.chandericluster.org; and http://www.firozabadcluster.org>.

India: Online Marketers

The Foundation of Occupational Development (FOOD), a non-governmental organization (NGO) in South India, successfully experimented with the use of online marketers (e-marketers) to promote product sales for rural women co-operatives and NGOs. These e-marketers were thoroughly trained in Internet technologies and custumer service issues to assist the artisans and customers. FOOD has set up the Indiashop, an online e-commerce portal highlighting a variety of Indian clothing, crafts, and jewellery <http://www.xlweb.com/indiashop>.

Vietnam: Policy Environment

For e-commerce to flourish, the policy environment must be conducive to the unique elements of its activities. PAN funded a study of the policy environment for e-commerce development in Vietnam to assess the current policy framework, determine the readiness of businesses to develop e-commerce activities, and suggest policy recommendations to the Vietnamese Government. This chapter outlines the role of the government in e-commerce, including the establishment of the Department for Information Technology and E-Commerce at the Ministry of Trade in early 2003.

Challenges in E-Commerce Adoption

Each chapter in this book deals with a unique situation that depends both on the form of e-commerce used and the social and cultural norms of the customers and vendors. However, several challenges are common to setting up virtually any e-commerce system. For example, when the PAN e-commerce mall was established in Singapore as a regional portal, one of its main objectives was to establish a secure form of online payment using credit cards. This was a significant challenge because of the need for encryption technologies, the existing social norms that often prohibit such online transactions, and the limited number of credit-card holders in some Asia-Pacific countries.

E-commerce purchases often complement regular storefront acquistions, however more frequently, these electronic purchases compete with conventional storefront operations. Issues common to traditional storefront stores, such as touching, packaging, and shipping the product, suddenly become very important factors to consider when setting up an effective and profitable e-commerce portal. The research reported in this book looks at most of these e-commerce adoption criteria.

E-commerce is expected to become increasingly important to businesses in Asia. The research reported in this book presents insights into how this technology might be better adapted to rural settings, and how policy decisions can affect e-commerce development.

Note

1. OECD Guidelines for the Interpretation of the Definitions (WPIIS Proposal April 2001) <http://www.oecd.org/dataoecd/34/16/2771174.pdf>.

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