Impact of e-commerce on Impact of e-commerce on developing countries developing countries

Honghong SunHonghong SunAvinash TatineniAvinash Tatineni

Jun TuJun TuPrudhvi Nag ValluruPrudhvi Nag Valluru

Outline of Our PresentationOutline of Our Presentation

Impact of E-Commerce to Retail Market in Impact of E-Commerce to Retail Market in ChinaChina

Internet Fraud on Developing Countries Internet Fraud on Developing Countries

Impact of E-Commerce on Import & Export Impact of E-Commerce on Import & Export

Impact of E-Commerce on IT Development Impact of E-Commerce on IT Development

E-Tourism on Developing Countries E-Tourism on Developing Countries

Impact of E-Commerce on Impact of E-Commerce on Retail Market in ChinaRetail Market in China

The Development Environment The Development Environment of E-Commerce in Chinaof E-Commerce in China

China is the world's fastest China is the world's fastest growing major economy growing major economy

Total internet user in Total internet user in China:China:123.00 million (CNNIC,2006)

Trading volume of E-Commerce in E-Commerce in China: 553.1 billion yuan (=70.4 China: 553.1 billion yuan (=70.4 billion US $) billion US $)

B2B(98%):542 billion yuan B2B(98%):542 billion yuan B2C & C2C(2%):11.1 billion yuan B2C & C2C(2%):11.1 billion yuan

Characteristics of Retail Market Characteristics of Retail Market in Chinain China

Huge retail market:950 billion US $ Huge retail market:950 billion US $ and High growth rate:13%and High growth rate:13%

Most of retailers in China don’t have Most of retailers in China don’t have substantive investment in B2C E-substantive investment in B2C E-Commerce Commerce

A large number of transnational retail A large number of transnational retail enterprises have invested in China's enterprises have invested in China's retail marketretail market

Opportunity to Retail Opportunity to Retail Enterprises by E-Commerce:Enterprises by E-Commerce:

Reduce costs Reduce costs effectivelyeffectively Give the retail enterprises Give the retail enterprises

more information to more information to procure products in the procure products in the world-wideworld-wide

Reduce the size of Reduce the size of entitative shop entitative shop

Reduce the cost the cost of Reduce the cost the cost of storage and transport of storage and transport of goods goods

Opportunity to Retail Opportunity to Retail Enterprises by E-Commerce:Enterprises by E-Commerce:

Expand Market Expand Market SharesShares

Expand B2C market to compete Expand B2C market to compete with C2C websites (It’s nearly with C2C websites (It’s nearly like a virgin market in China!)like a virgin market in China!)

According to know the special According to know the special needs of customers through the needs of customers through the internet, provide customers internet, provide customers with personalized services with personalized services

Most of the internet users are Most of the internet users are young high-educated people young high-educated people (Potential purchasing power)(Potential purchasing power)

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

Credit System Credit System

Most of Chinese(84%) Most of Chinese(84%) prefer Face-to-faceprefer Face-to-face transactions to online transactions to online transactionstransactions The modern credit The modern credit

system system has developed slowly in has developed slowly in China (Only a few people China (Only a few people have credit card)have credit card)

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

MechanismMechanism Laws and regulations Laws and regulations

on online transactionson online transactions

are incompleteare incomplete Concerns about the Concerns about the

security technology of security technology of

online transactionsonline transactions

INTERNET FRAUDINTERNET FRAUD

WHAT IS INTERNET FRAUD ?WHAT IS INTERNET FRAUD ?

The term Internet fraud refers to any type of fraud The term Internet fraud refers to any type of fraud

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

Major Types of Internet Fraud Major Types of Internet Fraud

Auction and Retail Schemes Online. Auction and Retail Schemes Online.

Business Opportunity/"Work-at-Home" Schemes Online.Business Opportunity/"Work-at-Home" Schemes Online. Identity Theft and Fraud Identity Theft and Fraud

Spam Mails. Spam Mails.

Credit-Card SchemesCredit-Card Schemes NO, no more spam! (c) John Coppens

2003

Other Schemes Other Schemes

Impact of this on developing countries: How ?Impact of this on developing countries: How ?

Example: 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 ?What to do when I get effected with the fraud ?

Report immediately to the concerned officials or Report immediately to the concerned officials or to security alert teams or Anti-fraud agencies.to security alert teams or Anti-fraud agencies.

Impact of e-commerce on IT Impact of e-commerce on IT development on Developing Countriesdevelopment on Developing Countries

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

picture1picture1

Picture 1 shows that rate of hardware ,software and Picture 1 shows that rate of hardware ,software and service change in china from 2002 to 2004.service change in china from 2002 to 2004.

2. Development of e-commerce needs 2. Development of e-commerce needs

a lot of IT employers. A research froma lot of IT employers. A research from

the biggest software organization in the biggest software organization in

India shows that the number of IT India shows that the number of IT

employers increased 24.5% in 2003. employers increased 24.5% in 2003.

Meanwhile it is predicted that the number Meanwhile it is predicted that the number

of IT employers will be 1.1 million in 2008.of IT employers will be 1.1 million in 2008.

Impact of e-commerce on import and Impact of e-commerce on import and export on Developing Countriesexport on Developing Countries

Import and export corporation can get feedback from Import and export corporation can get feedback from customers in other countries by e-mail. This can help customers in other countries by e-mail. This can help Import and export corporation know what they need to Import and export corporation know what they need to do.do.

Global e-commerce increased from 0.6 billion dollars to Global e-commerce increased from 0.6 billion dollars to 66.5 billion dollars between 1996 and 1999. The number 66.5 billion dollars between 1996 and 1999. The number of this increased to 1317.3 billion dollars in 2003. We can of this increased to 1317.3 billion dollars in 2003. We can know from these figures that e-commerce becomes more know from these figures that e-commerce becomes more important in our lives. important in our lives.

eTourism, What is it?eTourism, What is it? A dynamic interaction between Information & A dynamic interaction between Information &

Communication Technologies (ICTs) and Communication Technologies (ICTs) and Tourism exists. Each transforms the otherTourism exists. Each transforms the other

eTourism unites Business Management, eTourism unites Business Management, Information & Communication Technologies Information & Communication Technologies (ICTs) and Tourism(ICTs) and Tourism

ICTs are applied to tourism processes to ICTs are applied to tourism processes to maximise efficiency and effectiveness of the maximise efficiency and effectiveness of the organisationorganisation

The eTourism concept and eTourism domains (Buhalis 2003)

eTourism

IT / IS

• Information systems

• Information Communications technologies

•Telecommunications

Tourism

• Transport

• Travel

• Hospitality

• Leisure

• Heritage

Business

• Management

• Marketing

• Finance

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 country’s 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.