World Chambers Competition
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World Chambers Competition Best unconventional project Chamber of Commerce of Guayaquil Ecuador FINALIST CCG’s Cyber Monday Executive summary: Nowadays, e-commerce has become the most important sales channel for many companies around world. However, Ecuador has not been able to exploit the benefits of this channel despite the increasing access to Internet and the substantial decrease in digital illiteracy during the past eight years. One of the main constraints that impedes the development of e-commerce in the country is the lack of consumers’ confidence in doing online shopping. Therefore, the Guayaquil Chamber of Commerce (CCG) created the “Cyber Monday” in 2012, which consists of a landing web page providing trust among buyers and promoting e-commerce in Ecuador. In addition to create a landing web page, the role of the CCG is to make careful selection of companies, which have a recognized profile in doing business online. By completing this task, the CCG reduces the possibility of online shopping frauds and ensures a satisfactory experience for consumers. In the past two years, the results of the Cyber Monday have been outstanding based on the number of companies involved in the project and the number of visits to the lading page. The CCG’s Cyber Monday has become a key contribution to Ecuador’s e- commerce development as it has accomplished three main goals, including: 1) strengthening consumers’ trust in buying online, 2) showing to Ecuadorian companies that e-commerce represents a growth opportunity, and 3) helping businesses to diversify their sales from a specific target population or market. 1. Briefly, describe how your project originated. How did the idea come about, what needs were identified and why? Cyber Monday is a term originated in the United States in 2005. It refers to the Monday immediately after Black Friday, created by businesses to encourage consumers to buy online. The main advantage of this strategy is to enable online purchaser to enjoy great sales and promotions without moving from the comfort of their home or work. The project originated as an initiative of the Guayaquil Chamber of Commerce (CCG) in 2012, with the goal to solve a critical problem in Ecuador’s e-commerce development, such as the lack of consumers’ trust in doing online purchasing. Despite the increasing access to Internet and the substantial decrease in digital illiteracy in Ecuador during the past eight years, consumers did not trust to do online shopping due to the risk of frauds at the beginning of this decade. In fact, one of the main constraints impeding the development of e-commerce in the country is the lack of consumers’ trust in buying online. Therefore, the Guayaquil Chamber of Commerce (CCG) created the “Cyber Monday” in 2012, which consists of a landing web page that provides trust among consumers and hence to promote e-commerce in Ecuador. REG 1.5.1-1 2. Describe your project based on the category selected. (Context, innovative character, invested resources, difficulties met.) Context: In the past eight years, Ecuador has experienced a significant progress in the use of information technologies, access to the Internet, and reduction of digital illiteracy. Additionally, Ecuadorian companies are now making a remarkable effort and large investments in e-commerce, as they recognized the importance of offering their products and services on Internet. The non-store retailing channel, which includes online shopping, direct sales and vending machines, has grown significantly in Latin America. According to Forbes- Mexico, this positive trend will continue in 2017 and 2018. However, the Ecuador’s growth rate in this channel is below Colombia and Peru’s growth rate since 2014. This statistics shows the need to promote Ecuador’s e-commerce and build trust among online consumers. Source: Forbes México Internet Access in Ecuador: Households’ access to Internet has grown significantly since 2008 in Ecuador, when only 7% of households had access to Internet. In 2016, this indicator reached to 36% nationwide. REG 1.5.1-1 Source: INEC Ecuador Digital Illiteracy in Ecuador: Digital illiteracy has experienced a significant reduction since the year 2008, when this indicator represented 32.4% of the population between 15 and 49 years. In 2016, digital illiteracy decreased to 11.5% of population between 15 and 49 years. Source: INEC Ecuador Smartphones Users in Ecuador: The percentage of population over 5 years old owning a smartphones has substantially increased in the past five years. In 2011, the population using smartphones was only 5%, while in 2016 this indicator reached to 30%. REG 1.5.1-1 Smartphones Users in Ecuador 35% 30% 30% 25% 21% 20% 17% 15% 11% population over 5 years old 5 years population over 10% 8% % 5% 5% 0% 2011 2012 2013 2014 2015 2016 Source: INEC Ecuador Innovative character: The Guayaquil Chamber of Commerce (CCG) created the “Cyber Monday” in 2012, which consists of a landing web page providing trust among consumers and promoting e-commerce in Ecuador. This aims to provide a solution to one of the main constraints to Ecuador’s e-commerce growth, which is the lack of consumers’ trust in buying online. In addition to create a landing web page, the role of the CCG is to make careful selection of companies, which have a recognized profile in doing business online. By completing this task, the CCG reduces the possibility of online shopping frauds and ensures a satisfactory experience for consumers. As a result, the Cyber Monday becomes a win- win situation for sellers and buyers. On the one hand, businesses can promote their online stores and have the opportunity to increase their sales. Meanwhile, online buyers can enjoy excellent sales/promotions with a great degree of trust. It is important to mention that the project was also opened to micro, small and medium-sized companies in order to promote an inclusive environment within Ecuador’s e-commerce. In this manner, the CCG’s Cyber Monday has become a key contribution to Ecuador’s e-commerce development in the past five years. Additionally, this project fosters economic activity and quality employment in the country. Invested resources: Below are the total investment made by the Guayaquil Chamber of Commerce in Cyber Monday in the past two years. In 2016, there was an important reduction in expenses, showing the efficiency of our institution in organizing this project. More importantly, this reduction in the project’s expenses was accompanied by a 15,5% increase in the visits to the landing page (www.cybermonday.ec). REG 1.5.1-1 Difficulties: The following aspects are the most relevant difficulties of the project: Lack of consumers’ trust in buying online. Absence of similar standards among Ecuador's online stores at the begging of the project. Increasing cases of fraud through online shopping, online banking and ATM machines. The CCG had to understand all these difficulties and provide solutions to them in order to succeed in the project's implementation. 3. What have been the results and influence of this project? (Short and long term impact, measurable data, and benefits.) Short-term impact: First, to promote e-commerce in Ecuador by encouraging companies and buyers to take advantages of the benefits offered by the CCG’s Cyber Monday. Another key result of the project is to strengthen consumers’ trust in doing online shopping by reducing the possibility of any type of fraud and ensuring a reliable and satisfactory experience. Long-term impact: To convince Ecuadorian buyers and sellers that e-commerce is a reliable channel of doing business, and represents a growth opportunity due to the access to new markets and customers. To contribute to Ecuador’s e-commerce development in a sustainable manner. To narrow the gap between Ecuador’s e-commerce growth and other countries in the region. To foster economic activity and quality employment through an innovating sale channel. Measurable data: In 2015, the number of visits to the landing page (www.cybermonday.ec) reached to 155,000. By 2016, the number increased to 179,000 visits, which represented an increase by 15,5% during this period. Additionally, the number of companies involved in the Cyber Monday increased from 25 participants in 2015 to 33 in 2016. REG 1.5.1-1 Number of visits to the Cyber Monday's website 185.000 179.000 180.000 175.000 170.000 165.000 160.000 155.000 155.000 Number of visitsof Number 150.000 145.000 140.000 2015 2016 2015 2016 Source: CCG Benefits: These are the most important benefits of the projects: To strengthen consumers’ trust in buying online by reducing the possibility of fraud and ensuring a reliable and satisfactory experience. To increase companies’ online sales and to improve online buyers’ satisfaction. To convince Ecuadorian companies from any sector and size that e-commerce represents a growth opportunity due to the access to new customers and markets. To help businesses in diversifying their sales from a specific target and market, and hence reducing the risk of a high concentration in a sector. To foster economic activity and quality employment through an innovating sale channel. 4. Can your idea be applied in other parts of the world? (Please explain how and why.) Yes, the CCG’s Cyber Monday can be implemented in other countries around the world, especially, in those nations with gaps in the use of information technologies relative to developed countries. This project can have a significant impact in middle-income countries similar to Ecuador, where the access to Internet and digital illiteracy has improved in the past decade. However, these are nations where the e-commerce is not widely used due to the lack buyers’ trust in doing online shopping.