UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENTM ENT

EMBARGO The contents of this Report must not be quoted or summarized in the print, broadcast or electronic media before 24 March 2015, 17:00 hours GMT

INFORMATION ECONOMY REPORT 2015 UNITED N A TIONS CONFERENCE O N TRADD E ANA D DEVELOPMM ENT

INFORMATION ECONOMY REPORT 2015

New York and Geneva 2015 ii INFORMATION ECONOMY REPORT 2015

NOTE

Within the UNCTAD Division on Technology and Logistics, the ICT Analysis Section carries out policy-oriented analytical work on the development implications of information and communications technologies (ICTs). It is responsible for the preparation of the Information Economy Report. The ICT Analysis Section promotes international dialogue on issues related to ICTs for development, and contributes to building developing countries’ capacities to measure the information economy and to design and implement relevant policies and legal frameworks. In this report, the terms country/economy refer, as appropriate, to territories or areas. The designations employed and the presentation of the material do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. In addition, the designations of country groups are intended solely for statistical or analytical convenience and do not necessarily express a judgement about the stage of development reached by a particular country or area in the development process. The major FRXQWU\JURXSLQJVXVHGLQWKLVUHSRUWIROORZWKHFODVVLƄFDWLRQRIWKH8QLWHG1DWLRQV6WDWLVWLFDO2IƄFH7KHVHDUH Developed countries:7KHPHPEHUFRXQWULHVRIWKH2UJDQL]DWLRQIRU(FRQRPLF&RRSHUDWLRQDQG'HYHORSPHQW 2(&'  RWKHUWKDQ&KLOH0H[LFRWKH5HSXEOLFRI.RUHDDQG7XUNH\ SOXVWKHQHZ(XURSHDQ8QLRQPHPEHU FRXQWULHVWKDWDUHQRW2(&'PHPEHUV %XOJDULD&\SUXV/DWYLD/LWKXDQLD0DOWDDQG5RPDQLD SOXV$QGRUUD /LHFKWHQVWHLQ0RQDFRDQG6DQ0DULQR Countries with economies in transition:6RXWK(DVW(XURSHDQGWKH&RPPRQZHDOWKRI,QGHSHQGHQW6WDWHV Developing economies:,QJHQHUDODOOWKHHFRQRPLHVWKDWDUHQRWVSHFLƄHGDERYH)RUVWDWLVWLFDOSXUSRVHVWKH GDWDIRU&KLQDGRQRWLQFOXGHWKRVHIRU+RQJ.RQJ6SHFLDO$GPLQLVWUDWLYH5HJLRQ +RQJ.RQJ&KLQD 0DFDR 6SHFLDO$GPLQLVWUDWLYH5HJLRQ 0DFDR&KLQD RU7DLZDQ3URYLQFHRI&KLQD 5HIHUHQFHWRFRPSDQLHVDQGWKHLUDFWLYLWLHVVKRXOGQRWEHFRQVWUXHGDVDQHQGRUVHPHQWE\81&7$'RIWKRVH companies or their activities. 7KHIROORZLQJV\PEROVKDYHEHHQXVHGLQWKHWDEOHV 7ZRGRWV  LQGLFDWHWKDWGDWDDUHQRWDYDLODEOHRUDUHQRWVHSDUDWHO\UHSRUWHG5RZVLQWDEOHVKDYHEHHQ RPLWWHGLQWKRVHFDVHVZKHUHQRGDWDDUHDYDLODEOHIRUDQ\RIWKHHOHPHQWVLQWKHURZ $GDVK  LQGLFDWHVWKDWWKHLWHPLVHTXDOWR]HURRULWVYDOXHLVQHJOLJLEOH $EODQNLQDWDEOH}LQGLFDWHVWKDWWKHLWHPLVQRWDSSOLFDEOHXQOHVVRWKHUZLVHLQGLFDWHG $VODVK  EHWZHHQGDWHVUHSUHVHQWLQJ\HDUVIRUH[DPSOHLQGLFDWHVDƄQDQFLDO\HDU 8VHRIDQHQGDVK t EHWZHHQGDWHVUHSUHVHQWLQJ\HDUVIRUH[DPSOHtVLJQLƄHVWKHIXOOSHULRG LQYROYHGLQFOXGLQJWKHEHJLQQLQJDQGHQG\HDUV 5HIHUHQFHWRqGROODUVr  PHDQV8QLWHG6WDWHVRI$PHULFDGROODUVXQOHVVRWKHUZLVHLQGLFDWHG $QQXDOUDWHVRIJURZWKRUFKDQJHXQOHVVRWKHUZLVHVWDWHGUHIHUWRDQQXDOFRPSRXQGUDWHV Details and percentages in tables do not necessarily add up to the totals because of rounding. The material contained in this study may be freely quoted with appropriate acknowledgement.

81,7('1$7,21638%/,&$7,21 81&7$',(5 6DOHV1R(,,' ,661 ,6%1 H,6%1 &RS\ULJKW†8QLWHG1DWLRQV $OOULJKWVUHVHUYHG3ULQWHGLQ6ZLW]HUODQG PREFACE iii

PREFACE

7KH  HGLWLRQ RI 81&7$'pV Information Economy Report examines electronic commerce, and shows in detail how information and communications technologies can be harnessed to support economic growth and sustainable development. (OHFWURQLF FRPPHUFH FRQWLQXHV WR JURZ ERWK LQ YROXPH DQG JHRJUDSKLF UHDFK DQG LV LQFUHDVLQJO\ IHDWXUHG in the international development agenda, including in the World Summit on the Information Society outcome GRFXPHQWVDQGLQWKHRXWFRPHRIWKHQLQWK0LQLVWHULDO&RQIHUHQFHRIWKH:RUOG7UDGH2UJDQL]DWLRQ The Information Economy Report 2015 highlights how some of the greatest dynamism in electronic commerce FDQEHIRXQGLQGHYHORSLQJFRXQWULHVEXWWKDWSRWHQWLDOLVIDUIURPIXOO\UHDOL]HG7KHUHSRUWH[DPLQHVRSSRUWXQLWLHV and challenges faced by enterprises in developing countries that wish to access and use e-commerce. It KLJKOLJKWVWKHODWHVWPDUNHWWUHQGVEHQFKPDUNVFRXQWU\}SHUIRUPDQFHVZLWKWKH81&7$'(FRPPHUFH,QGH[ reviews examples of e-commerce in rural areas and low-income countries, addresses relevant legal issues and provides policy recommendations. As the world looks ahead to implementing a new agenda for the next generation of our development work, I commend this report to all those seeking to help unlock the potential of e-commerce for developing countries.

%$1.LPRRQ Secretary-General United Nations iv INFORMATION ECONOMY REPORT 2015

ACKNOWLEDGEMENTS

The Information Economy Report 2015ZDVSUHSDUHGE\DWHDPFRPSULVLQJ7RUEMÓUQ)UHGULNVVRQ WHDPOHDGHU  &ÆFLOH%DUD\UH6FDUOHWW)RQGHXU*LO6XZDQ-DQJ0LQ-DH.LP'LDQD.RUND6PLWD/DNKH1JR]L2QRGXJRDQG 0DULH6LFDWXQGHUWKHRYHUDOOVXSHUYLVLRQRI$QQH0LURX['LUHFWRURIWKH'LYLVLRQRQ7HFKQRORJ\DQG/RJLVWLFV 7KH UHSRUW EHQHƄWHG IURP PDMRU VXEVWDQWLYH LQSXWV SURYLGHG E\ .LP $QGUHDVVRQ 0DUWLQ )DON (YD +DJVWHQ +DUVKD/L\DQDJH%HQ/\RQ0LFKDHO0LQJHVDQG7KDR1JX\HQ$GGLWLRQDOLQSXWVZHUHFRQWULEXWHGE\'RPLQLTXH &KDQWUHO*LXVHSSHGL&DSXD3DYDQ'XJJDO0RKDPHG(V)LK5RFÊR0DUWLQH]+RXVVD\DQG0DUFR)XJD]]D Comments on a draft version of the report were provided by experts attending a peer review meeting in Geneva LQ'HFHPEHULQFOXGLQJ%ULJLWWH$FRFD-RVÆ$QVÐQ2OJD&DYDOOL0DULD5RVDULD&HFFDUHOOL3DXO'RQRKRH -DPHV+RZH'HQLV.LELULJH1LU.VKHWUL6LOYLD0RQ]ÐQGH%LGDUW)LRUHOOD1LUR,DQ:DOGHQDQG.HH+ZHH:HH Additional comments were received at various stages of the production of the report from Luca Castellani, Angel *RQ]¾OH]6DQ]5LFKDUG+HHNV$UQDX,]DJXHUUL-DQ+RIIPDQ6WHYH0DF)HHO\'DYLG6RXWHU/HH7XWKLOODQG +DQV3HWHU:HUQHU 81&7$'LVJUDWHIXOIRUWKHVKDULQJRIGDWDE\QDWLRQDOVWDWLVWLFDORIƄFHVDQGUHVSRQVHVUHFHLYHGWRWKH81&7$' annual survey questionnaire on ICT usage by enterprises and on the ICT sector. The sharing of data for this report E\WKH,QWHUQDWLRQDO7HOHFRPPXQLFDWLRQ8QLRQ ,78 DQGWKH8QLYHUVDO3RVWDO8QLRQ 838 LVKLJKO\DSSUHFLDWHG UNCTAD is equally grateful for the sharing of data for the global mapping of cyberlaws by Gema Campillos, *UDKDP *UHHQOHDI 6WHSKHQ 0DVRQ +HLGHPDULH 0HQGHO (YD 9DijNRY¾ DQG 3RORQD =DYEL DV ZHOO DV E\ WKH &RPPRQZHDOWKVHFUHWDULDWWKH&RXQFLORI(XURSH'/$3LSHU*RRJOH1RUWRQ5RVH)XOEULJKWWKH2(&'7KH 3D\SHUVWKH8QLWHG1DWLRQV&RPPLVVLRQRQ,QWHUQDWLRQDO7UDGH/DZ 81&,75$/ WKH8QLWHG1DWLRQV2IƄFHRQ 'UXJVDQG&ULPHDQGWKH(FRQRPLFDQG6RFLDO&RPPLVVLRQIRU:HVWHUQ$VLD The cover and other graphics were done by Nadège Hadjemian. Desktop publishing was done by Nathalie Loriot and the Information Economy Report 2015ZDVHGLWHGE\-RKQ5RJHUV )LQDQFLDOVXSSRUWIURPWKH*RYHUQPHQWRI)LQODQGLVJUDWHIXOO\DFNQRZOHGJHG CONTENTS v

CONTENTS

Note ...... ii Preface ...... iii Acknowledgements ...... iv List of Abbreviations ...... ix Overview ...... xi

CHAPTER I REVISITING THE DEVELOPMENT POTENTIAL OF E-COMMERCE ..... 1 A. E-commerce and development ...... 2 % 'HƄQLWLRQVRIHFRPPHUFH ...... 3 C. Implications of e-commerce ...... 4 1. The e-commerce value chain...... 4  (FRQRPLFLPSDFWVRIHFRPPHUFH ......   1HZHYLGHQFHRQWKHSURGXFWLYLW\LPSDFWRIHFRPPHUFHLQ(XURSH ......  D. Roadmap to the report ...... 7 CHAPTER II GLOBAL AND REGIONAL TRENDS ...... 11 A. The global e-commerce market is evolving ...... 12  0DUNHWVL]HHVWLPDWHV ......   &URVVERUGHUHFRPPHUFH ...... 15  (FRPPHUFHXVHE\KRXVHKROGVDQGHQWHUSULVHV ......  4. What do consumers buy online? ......   /DUJHVW%&HFRPPHUFHFRPSDQLHV ......  B. Regional trends ...... 23  $IULFD'\QDPLFJURZWKIURPDORZOHYHO ......   $VLDDQG2FHDQLD0DMRUPDUNHWZLWKJUHDWGLYHUVLW\ ......   /DWLQ$PHULFD'LYHUVHHFRV\VWHPVWLOOWRUHDFKIXOOSRWHQWLDO ......  C. Conclusions ...... 30 CHAPTER III MEASURING THE E-COMMERCE READINESS OF COUNTRIES ...... 33 $ )DFWRUVLQƅXHQFLQJWKHVFRSHIRUHFRPPHUFH ...... 34 1. Internet access ......   3D\PHQWV\VWHPVIRURQOLQHSXUFKDVHV ......   'HOLYHU\V\VWHPV......  B. The UNCTAD B2C E-commerce Index ...... 39 C. Concluding remarks ...... 43 vi INFORMATION ECONOMY REPORT 2015

CHAPTER IV E-COMMERCE BY SMALL AND RURAL ENTERPRISES IN DEVELOPING COUNTRIES ...... 45 A. Options for micro and small enterprises to engage in e-commerce ...... 46 1. Using existing online marketplaces ......   $FFHVVEDUULHUVWRLQWHUQDWLRQDOHFRPPHUFHSODWIRUPV ......   6HWWLQJXSDVWDQGDORQHHFRPPHUFHVLWH ...... 49  3URFHVVLQJRISD\PHQWV ......   2UGHUIXOƄOPHQW...... 51  7KHLPSRUWDQFHRIORFDOVROXWLRQV ......  B. Opportunities for rural enterprises to sell online ...... 53 1. Grassroots-led rural e-commerce in China ...... 54  5XUDOHFRPPHUFHLQWKH5HSXEOLFRI.RUHD7KHFDVHRIWKH,QIRUPDWLRQ1HWZRUN9LOODJH platform...... 55  5XUDOHFRPPHUFHLQ7KDLODQG ......  4. Lessons from the three cases ......  CHAPTER V MAPPING THE LEGAL LANDSCAPE FOR E-COMMERCE ...... 63 A. Legal issues and challenges for e-commerce ...... 64 B. Compatibility of e-transaction laws needed for cross-border e-commerce ...... 66 C. Coverage of consumer protection online is patchy ...... 68 D. Data protection laws are spreading rapidly ...... 70 E. Cybercrime – a global priority ...... 73 F. Conclusions and recommendations ...... 74 1. Align e-transaction laws......   6WUHDPOLQHFRQVXPHUSURWHFWLRQSROLFLHV ......   6WUHDPOLQLQJGDWDSURWHFWLRQDQGF\EHUFULPHSROLFLHV ......  4. Strengthening the capacity of lawmakers and judiciary ......   (QKDQFLQJWKHDZDUHQHVVRIFRQVXPHUVDQGFRPSDQLHV ......  CHAPTER VI STRATEGY AND POLICY IMPLICATIONS ...... 81 A. National policies and strategies to enable e-commerce ...... 82 1. Strategic approaches to the development of e-commerce......   .H\SROLF\DUHDVWRDGGUHVVLQDQDWLRQDOVWUDWHJ\ ......  B. E-commerce policies at the international level ...... 88  (FRPPHUFHDQGLQWHUQDWLRQDOWUDGHUXOHV ......   7D[DWLRQFRQFHUQVUHODWHGWRHFRPPHUFH ......   6XSSRUWE\GHYHORSPHQWSDUWQHUV ......  C. Concluding remarks ...... 91

References ...... 93

STATISTICAL ANNEX ...... 99

Selected Unctad Publications In The Area Of Science, Technology And Ict For Development ...... 115

Readership Survey ...... 119 CONTENTS vii

Boxes

, (FRPPHUFHWKH:RUOG6XPPLWRQWKH,QIRUPDWLRQ6RFLHW\DQGWKH:RUOG7UDGH2UJDQL]DWLRQ ....  , 7\SHVRIHFRPPHUFH ......  ,, %DUULHUVWRLQWHUQDWLRQDOHFRPPHUFHtDVXUYH\ ...... 15 ,, 7KH$OLEDED*URXS......  ,, (FRPPHUFHFRPSDQLHVLQVXE6DKDUDQ$IULFDtVHOHFWHGH[DPSOHV ......  ,, 'DWDRQHFRPPHUFHLQ%UD]LO......  ,, 0HUFDGR/LEUH ......  ,,, 0HWKRGRORJ\RIWKH81&7$'%&(FRPPHUFH,QGH[ ......  ,9 3ODWIRUPFRPSHWLWLRQLQWKH3KLOLSSLQHV ......  ,9 %%RQOLQHPDUNHWSODFHVtRSSRUWXQLWLHVIRUPLFURDQGVPDOOHQWHUSULVHVWRSDUWLFLSDWHLQ international supply chains......  ,9 )UHHODQFHRSSRUWXQLWLHVIRUZRPHQHQWUHSUHQHXUV ......  ,9 6KRSLI\LQtDORFDOL]HG6DD6H[DPSOH......  ,9 6XSSRUWZLWKFRPSOLDQFH7KH3$&,5SURMHFWLQ&ÑWHGp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pV)',SROLF\UHODWHGWRHFRPPHUFH......  9, 81&7$'VXSSRUWWRHFRPPHUFHGHYHORSPHQWLQGHYHORSLQJFRXQWULHV ......  viii INFORMATION ECONOMY REPORT 2015

Tables

,, 8QLWHG6WDWHV7RWDODQGHFRPPHUFHUHYHQXHVE\VHFWRUt }ELOOLRQV ......  ,, %&UHYHQXHVLQWKHWRSFRXQWULHVUDQNHGE\QXPEHURIRQOLQHEX\HUVt...... 14 ,, ,QWHUQDWLRQDOGHOLYHULHV WRQQDJH RIVPDOOSDFNHWVSDUFHOVDQGSDFNDJHVDQG GLVWULEXWLRQRIUHJLRQDOƅRZVDVDVKDUHRIJOREDOƅRZV SHUFHQW ......  ,, $YHUDJHVKLSSLQJWLPHIRUSDUFHOV QRUPDOVHUYLFH 4WR4 (Number of days from origin to destination) ......  ,, (VWLPDWHGQXPEHURIRQOLQHEX\HUVZRUOGZLGHE\UHJLRQDQG ......  ,, 2QOLQHEX\LQJLQWHQWLRQVLQWKHQH[WVL[PRQWKVE\UHJLRQ 3HUFHQWRIUHVSRQGHQWV  ......  ,, /DUJHVW,QWHUQHWUHWDLOHUFRPSDQLHVLQWKH8QLWHG6WDWHV(XURSH$VLDDQG/DWLQ$PHULFD t ......  ,, 7RSRQOLQHVLWHVE\JURVVPHUFKDQGLVHYDOXH }ELOOLRQV ......  ,, %&HFRPPHUFHVDOHVLQVL[FRXQWULHVLQ$IULFDt }ELOOLRQV ......  ,,, (WUDQVDFWLRQVYDOXHE\SD\PHQWPHWKRGVE\UHJLRQ SHUFHQW ......  ,,, 7\SHRIDFFRXQWVDQGSD\PHQWPHWKRGVE\UHJLRQVKDUHRISRSXODWLRQ aged 15 or more (per cent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

Annex

 81&7$'%&(FRPPHUFH,QGH[ ......   $PD]RQH%D\DQG3D\3DOVHUYLFHVDYDLODELOLW\LQ8QLWHG1DWLRQV0HPEHU6WDWHV......   $YDLODELOLW\RIOHJLVODWLRQRUGUDIWOHJLVODWLRQLQNH\DUHDVRIF\EHUODZV ......  LIST OF ABREVIATIONS ix

LIST OF ABBREVIATIONS

$6($1 Association of Southeast Asian Nations %% business to business %& business to consumer %* business to government && consumer to consumer e-commerce electronic commerce e-signature electronic signature ($& (DVW$IULFDQ&RPPXQLW\ (&& 8QLWHG1DWLRQV&RQYHQWLRQRQWKH8VHRI(OHFWURQLF&RPPXQLFDWLRQVLQ,QWHUQDWLRQDO Contracts (&&1HW (XURSHDQ&RQVXPHU&HQWUHV1HWZRUN (&2:$6 (FRQRPLF&RPPXQLW\RI:HVW$IULFDQ6WDWHV (', electronic data interchange )', foreign direct investment *'3 gross domestic product HD KLJKGHƄQLWLRQ ,&3(1 ,QWHUQDWLRQDO&RQVXPHU3URWHFWLRQDQG(QIRUFHPHQW1HWZRUN ICT information and communications technology ,19,/ ,QIRUPDWLRQ1HWZRUN9LOODJH IT information technology ITC International Trade Centre ITU International Telecommunication Union LDC least developed country 0ELWV megabit(s) per second 0,&7 0LQLVWU\RI,QIRUPDWLRQDQG&RPPXQLFDWLRQ7HFKQRORJ\ 7KDLODQG 2(&' 2UJDQL]DWLRQIRU(FRQRPLF&RRSHUDWLRQDQG'HYHORSPHQW 3., public key infrastructure SaaS software as a service 606 short message service 7)$ 7UDGH)DFLOLWDWLRQ$JUHHPHQW 81&,75$/ United Nations Commission on International Trade Law 81*&3 8QLWHG1DWLRQV*XLGHOLQHVRQ&RQVXPHU3URWHFWLRQ 838 8QLYHUVDO3RVWDO8QLRQ 85/ uniform resource locator 9$7 value added tax :&2 :RUOG&XVWRPV2UJDQL]DWLRQ :28*1(7 Women of Uganda Network WSIS World Summit on the Information Society :72 :RUOG7UDGH2UJDQL]DWLRQ

OVERVIEW xi

OVERVIEW

Global e-commerce is expanding fast with The report outlines key opportunities and developing economies gaining prominence challenges of e-commerce ...

The Information Economy Report 2015 examines $ QXPEHU RI SURYHQ DQG SRWHQWLDO EHQHƄWV DUH opportunities and challenges faced by enterprises in SUHVHQWHG E\ %% DQG %& HFRPPHUFH VXFK developing countries that want to engage in electronic as enhanced participation in international value commerce (e-commerce). As online transactions are chains, greater market access and reach, and increasingly embraced by enterprises and consumers, LPSURYHG LQWHUQDO DQG PDUNHW HIƄFLHQF\ DV ZHOO DV the global landscape is rapidly changing, with lower transaction costs. It may spur job creation in developing countries as a group assuming a more the information and communications technology prominent role as both buyers and sellers of goods (ICT) sector and in enterprises that become more and services online. competitive thanks to online procurement and sales. It is estimated by UNCTAD that the value of global 1HZ HYLGHQFH IURP (XURSH SUHVHQWHG LQ WKH UHSRUW EXVLQHVVWREXVLQHVV %%  HFRPPHUFH LQ  SRLQWVWRVLJQLƄFDQWSURGXFWLYLW\JDLQVIURPVHOOLQJRYHU H[FHHGHG}WULOOLRQZLWKPRUHWKDQWKUHHTXDUWHUV the Internet and indicates that such effects are larger of the total accounted for by, in order of magnitude, for smaller enterprises and in services industries. WKH 8QLWHG 6WDWHV WKH 8QLWHG .LQJGRP RI *UHDW %XW EHQHƄWV IURP HFRPPHUFH GR QRW DFFUXH %ULWDLQ DQG 1RUWKHUQ ,UHODQG -DSDQ DQG &KLQD 7KH automatically and this form of trading also raises importance of e-commerce increased substantially in challenges for some existing players. With the the past decade. In the United States, for example, entrance of competitors offering new product features its share in total manufacturing revenue surged from DQG FXVWRPHU VHUYLFHV HFRPPHUFH UHGHƄQHV }SHUFHQWLQWRPRUHWKDQKDOILQ WKH PDUNHWSODFH )RU H[DPSOH WUDGLWLRQDO qEULFNV *OREDO EXVLQHVVWRFRQVXPHU %&  HFRPPHUFH DQGPRUWDUr VWRUHV LQFUHDVLQJO\ QHHG WR DGDSW WR DFFRXQWHGIRUDQHVWLPDWHG}WULOOLRQLQ:KLOH enhanced price transparency and competition by VWLOO FRQVLGHUDEO\ VPDOOHU WKDQ %% WKLV VHJPHQW providing new online sales channels, investing in new appears to be growing faster. In developing countries, equipment and services, building complementary %& HFRPPHUFH LV UDSLGO\ H[SDQGLQJ SDUWLFXODUO\ skills and revising their business strategies. The in Asia and Africa. China has already emerged as transition to online sales is not an easy task and even WKH ODUJHVW JOREDO PDUNHW IRU %& HFRPPHUFH t leading retailers of the world have wrestled with this measured both by online buyers and by revenue. The challenge. There may also be a risk that technology- VKDUHRIWKH$VLDDQG2FHDQLDUHJLRQLQJOREDO%& VDYY\ IRUHLJQ FRPSHWLWRUV RXWGR ORFDO ƄUPV JDLQLQJ HFRPPHUFHLVH[SHFWHGWRVXUJHIURPWR}SHU greater market shares from e-commerce compared to FHQWEHWZHHQDQGDQGWKDWRIWKH0LGGOH local ones. Trade online has expanded the number of (DVWDQG$IULFDWRLQFUHDVHVOLJKWO\IURPWR}SHU incidents and geographic reach of certain crimes and cent. Conversely, the combined share of Western fraudulent activities. Governments may, furthermore, (XURSHDQG1RUWK$PHULFDLVH[SHFWHGWRIDOOIURP be concerned with tax erosion and transfer pricing. WR}SHUFHQW … as well as major barriers and drivers, especially International postal deliveries of small packets and for micro and small businesses parcels have seen rapid growth in the past few years, mainly as a result of cross-border e-commerce. The A number of factors act as potential constraints on YROXPH RI VXFK WUDGH URVH E\ } SHU FHQW EHWZHHQ HFRPPHUFH (FRQRPLF EDUULHUV LQFOXGH LQDGHTXDWH  DQG  'XULQJ WKLV SHULRG WKH VKDUH RI ICT infrastructure and use, unreliable and costly developed countries as senders dropped from more power supply, limited use of credit cards, lack of WKDQ}SHUFHQWWROHVVWKDQ}SHUFHQW'HYHORSHG SXUFKDVLQJ SRZHU DQG XQGHUGHYHORSHG ƄQDQFLDO FRXQWULHV DQG WKH $VLD DQG 2FHDQLD UHJLRQ VKRZ systems. Sociopolitical barriers include weak legal VLJQLƄFDQWWUDGHVXUSOXVHVLQUHODWHGGHOLYHULHVZKLOH DQG UHJXODWRU\ IUDPHZRUNV ZKLFK LQƅXHQFH ZKHWKHU the opposite is true for other regions. people and enterprises trust online transactions), xii INFORMATION ECONOMY REPORT 2015

cultural preferences for face-to-face interaction, and 7KHUHLVFRQVLGHUDEOHYDULDWLRQDWWKHUHJLRQDOOHYHO)RU reliance on cash in society. And cognitive obstacles, example, transition economies have a relatively high ƄQDOO\ LQFOXGH ORZ OHYHOV RI ,&7 OLWHUDF\ DZDUHQHVV degree of home postal delivery, whereas credit card and knowledge related to e-commerce among both penetration is low compared with most developing consumers and enterprises. Thanks to changes UHJLRQV2QWKHRWKHUKDQGLQ/DWLQ$PHULFDDQGWKH LQ WKH qHFRPPHUFH HFRV\VWHPr t WKH QHWZRUN RI &DULEEHDQDQGLQ$VLDDQG2FHDQLDWKHUHLVVFRSHIRU actors, institutions and infrastructure that forms the improving the coverage of postal home delivery, and in environment required for effective e-commerce – Africa, performance is hampered by low overall Internet some of these barriers are today easier to overcome. penetration levels compared with other regions. Although most micro and small enterprises in Globally, credit card penetration has the lowest average developing countries have yet to start buying or selling YDOXHDPRQJWKHIRXULQGLFDWRUVLQWKH,QGH[0RVWUHWDLO products online, recent developments are expanding e-commerce payments are still made via credit card, WKHLU FKDQFHV RI VHL]LQJ EHQHƄWV IURP HFRPPHUFH but the role of other methods is forecast to expand in )LUVWFRQQHFWLYLW\KDVJUHDWO\LPSURYHGQRWDEO\DVD the future. As a result, credit card use may become a result of the widespread uptake of mobile telephony less important determinant when alternative payment and social media, and rising levels of Internet use VROXWLRQVJDLQWUDFWLRQ0RELOHSD\PHQWVIRUH[DPSOH enabled by deployment of international and national DUH H[SHFWHG WR DFFRXQW IRU RQO\ } SHU FHQW RI WKH ƄEUHRSWLF QHWZRUNV 6HFRQG QHZ DSSOLFDWLRQV YDOXH RI HFRPPHUFH SD\PHQWV E\  +RZHYHU platforms and services are lowering the barriers to WKH\DUHDOUHDG\LPSRUWDQWLQFRXQWULHVFKDUDFWHUL]HG entry. Third, new payment solutions provide wider by limited Internet use but well-functioning mobile choice for both enterprises and consumers to conduct money systems. In several African countries, mobile WUDQVDFWLRQV RQOLQH )RXUWK ORFDO HFRPPHUFH solutions represent the most viable infrastructure for companies – sometimes backed by foreign investors HVHUYLFHVGXHWRKLJKGHJUHHVRIƄQDQFLDOH[FOXVLRQ – are rapidly appearing in developing countries, OLPLWHG DYDLODELOLW\ RI Ƅ[HG OLQHV FRVW RI Ƅ[HG OLQHV tailored to the needs and demands of local users. DQG FRVW RI WKH FDUG LQIUDVWUXFWXUH ,Q .HQ\D RQOLQH )LIWK WKHUH LV JURZLQJ UHDGLQHVV DPRQJ HQWHUSULVHV purchase payments from mobile phones accounted and consumers to conduct business online as well as IRU}SHUFHQWRIWRWDOHFRPPHUFHWUDQVDFWLRQYDOXH more awareness among Governments and lawmakers LQDVPDOOHUVKDUHWKDQIRUFDVKRQGHOLYHU\EXW of the importance of relevant legislation and regulation larger than for credit card payments. to enhance trust online. Most of the top e-commerce companies are from The UNCTAD B2C E-commerce Index: A new tool for the United States and China measuring e-commerce readiness The emerging e-commerce landscape is featuring To assess the readiness of countries for e-commerce, a growing number of enterprises offering global WKH UHSRUW SUHVHQWV WKH QHZ 81&7$' %& solutions as well as services that are carefully tailored (FRPPHUFH,QGH[FRYHULQJGDWDIRUHFRQRPLHV to the local environment. Among the global players, a RQ IRXU LQGLFDWRUV ,QWHUQHW XVH VHFXUH VHUYHUV QXPEHU RI VSHFLDOL]HG HFRPPHUFH FRPSDQLHV ZLWK credit card penetration and postal delivery services. web sales only play a prominent role in the market. 7KH 81&7$' %& (FRPPHUFH ,QGH[ YDOXH LV Some of the largest such companies by online revenue strongly positively correlated to the variation in the DUH$PD]RQFRP 8QLWHG6WDWHV -'FRP &KLQD 'HOO share of individuals shopping online. It suggests 8QLWHG 6WDWHV  DQG -LDFRP &KLQD  ,Q DGGLWLRQ WR that the highest e-commerce readiness is found in these, several global platforms allow individuals and /X[HPERXUJ1RUZD\DQG)LQODQG$PRQJGHYHORSLQJ small businesses to offer their goods and services DQGHPHUJLQJHFRQRPLHVDOOIURQWUXQQHUVDUHLQ(DVW RQOLQH VXFK DV WKH $OLEDED *URXS &KLQD  H%D\ $VLDWKH5HSXEOLFRI.RUHD+RQJ.RQJ &KLQD DQG 8QLWHG6WDWHV DQG5DNXWHQ -DSDQ ,QWHUPVRIJURVV Singapore. merchandise value, the top e-commerce sites in the ZRUOG LQ  ZHUH WKH $OLEDED *URXS IROORZHG E\ The Index allows countries to compare their readiness $PD]RQDQGH%D\ with others and also indicates their relative strengths and weaknesses in different elements of the e-commerce (FRPPHUFHSODWIRUPVZLWKVWURQJSUHVHQFHDURXQG process, such as the quality of Internet infrastructure WKHZRUOGVXFKDV$PD]RQH%D\$OLEDEDDQG2/; and the availability of payment and delivery solutions. provide solutions to many small enterprises. They OVERVIEW xiii

can facilitate access to international markets, carry parts of the world the availability is inadequate. RXW WUDGLQJ DQG RUJDQL]H VKLSSLQJ DQG ƄQDQFLDO The share of countries that have adopted a law is transactions within and beyond national borders. generally highest for e-transactions and lowest for However, merchants in developing countries do not WKHSURWHFWLRQRIFRQVXPHUVRQOLQH3DWWHUQVYDU\E\ DOZD\V HQMR\ HTXDO DFFHVV WR WKHVH VHUYLFHV )RU UHJLRQ)RUH[DPSOHLQ&HQWUDO$PHULFDVHYHQRXWRI example, only in one developing country (India) are eight countries have consumer protection legislation PHUFKDQWVDEOHWRUHJLVWHUDVVHOOHUVRQ$PD]RQ,QWKH in place, but more than half of the countries lack FDVHRIH%D\XVHUVFDQUHJLVWHUWRVHOORQLWVSODWIRUP laws related to data protection and cybercrime. The LQ  8QLWHG 1DWLRQV 0HPEHU 6WDWHV LQFOXGLQJ QLQH subregion with the weakest coverage of e-commerce GHYHORSLQJ FRXQWULHV 2WKHU H%D\ VLWHV DOORZ IRU OHJLVODWLRQLV0LGGOH$IULFDZKHUHRQO\WZRRXWRIQLQH buying but not selling. Such asymmetric access to countries have e-transactions, consumer protection marketplaces may accentuate existing imbalances in online and data protection laws, and only one country e-commerce trade as it is easier to export from one has adopted cyber legislation. country to another. National strategies and international policies can But new entrants offer locally tailored solutions in help secure sustainable gains from e-commerce developing countries As the digital economy expands and more business The absence of global platform providers creates activities are affected, it is important to consider VFRSHIRUORFDOSOD\HUVWRƄOOWKHYRLG,QVXE6DKDUDQ policies that can help to harness e-commerce for Africa, for example, various e-commerce solutions sustainable development. In this context, a national have been adapted to develop commerce over feature e-commerce strategy developed in collaboration with phones. There are thousands of e-commerce start- relevant stakeholders can play a useful role. Special ups throughout the continent, but only a handful have attention may be devoted to measures to facilitate the UHDFKHG VLJQLƄFDQW VFDOH 0DQ\ QHZ HFRPPHUFH effective involvement of micro and small enterprises. SD\PHQWJDWHZD\VKDYHDOVRDSSHDUHG0HDQZKLOHLQ $VVHVVLQJHFRPPHUFHUHDGLQHVVLVDQDWXUDOƄUVWVWHS $VLDQOHDVWGHYHORSHGFRXQWULHVVXFKDV%DQJODGHVK towards formulating an effective national e-commerce and Cambodia, new e-commerce sites are targeting strategy and to set priorities. This involves developing the domestic market, enabling consumers to browse an understanding of national needs, characteristics, and order products online. strengths and weaknesses, using tools such as the Global mapping of e-commerce legislation 81&7$' %& (FRPPHUFH ,QGH[ $Q\ DVVHVVPHQW highlights progress and gaps should include a comprehensive review of the evolution of e-commerce, including e-commerce- %X\LQJ DQG VHOOLQJ RQOLQH UDLVH OHJDO FKDOOHQJHV WKDW related initiatives, and a stocktaking of the resources have to be addressed by both Governments and the and capabilities that could contribute to the industry itself. This applies to domestic e-commerce development of e-commerce. This may require the DQGHYHQPRUHWRLQWHUQDWLRQDOWUDQVDFWLRQV(YHQLQ collection of information through desk research and developed regions, different legal requirements set direct consultations with relevant stakeholders. in national laws hamper cross-border e-commerce. 'HVSLWHVLJQLƄFDQWSURJUHVVLQWKHDGRSWLRQRIODZV 3URSHUO\LGHQWLI\LQJWKHPDLQFKDOOHQJHVDQGEDUULHUV DQG WR VRPH H[WHQW OHJDO KDUPRQL]DWLRQ LQ PDQ\ and uncovering the dynamics underpinning them regions, there is a need to align laws with international will help to ensure that policy measures adopted are OHJDOLQVWUXPHQWV)XUWKHUPRUHVHYHUDO*RYHUQPHQWV HIIHFWLYH .H\ SROLF\ DUHDV LQFOXGH WKH GHYHORSPHQW especially in developing countries, need to adopt of ICT infrastructure, logistics and trade facilitation, baseline laws in legal areas where they do not exist the legal and regulatory environment, e-payments, and ensure enforcement. platforms and skills development in combination with an enabling international environment. The Information Economy Report 2015 maps the availability of national legislation in four key areas In the legal area, policy- and lawmakers need to RI F\EHU OHJLVODWLRQ HWUDQVDFWLRQV FRQVXPHU WDNH YDULRXV DFWLRQV )LUVW ODZV IRU HVLJQDWXUHV protection online, data protection and privacy, and and e-contracting should be aligned to become F\EHUFULPH5HOHYDQWODZVLQWKHVHDUHDVDUHPRVWO\ internationally compatible. Second, consumer in place in developed countries, but in many other protection online should take into account ongoing xiv INFORMATION ECONOMY REPORT 2015

HIIRUWVE\WKH2(&'DQGWKH8QLWHG1DWLRQVWRXSGDWH )XUWKHU VKLIWV IURP RIƅLQH WR RQOLQH FRPPHUFH DUH the international guidelines on consumer protection. expected in the coming years. This will continue to Third, the establishment of minimum standards in change the ways in which consumers and enterprises regard to data protection and cybercrime could help interact. Some are better equipped to adapt to ensure cross-border coordination on the design and VXFK WUDQVIRUPDWLRQV )URP D SROLF\ SHUVSHFWLYH LW implementation of relevant legislation and stronger is important to create an environment that provides HQIRUFHPHQW LQVWLWXWLRQV )RXUWK DV F\EHU OHJLVODWLRQ more equal opportunities for stakeholders in different LV VWLOO D UHODWLYHO\ QHZ ƄHOG RI ODZ LQ ODUJH SDUWV RI locations and areas of society to take part in the the developing world, further efforts are needed to process. In this context, international cooperation and strengthen the capacity of lawmakers and the judiciary. effective dialogue between policymakers and other )LQDOO\WKHUHLVDQHHGIRUUDLVLQJWKHDZDUHQHVVDERXW stakeholders will remain instrumental. existing cyber legislation among all stakeholders. At the international level, special attention is warranted in the areas of international trade rules, taxation and support to capacity-building in developing FRXQWULHV (FRPPHUFH IHDWXUHV LQ WKH LQWHUQDWLRQDO development agenda in outcome documents on WKH qYLVLRQ EH\RQG r IRU WKH :RUOG 6XPPLW RQ the Information Society, as well as in the outcome RIWKH%DOL0LQLVWHULDO&RQIHUHQFHRIWKH:RUOG7UDGH 2UJDQL]DWLRQ,QWHUQDWLRQDOGHFODUDWLRQVDFFRUGLQWKDW 0XNKLVD.LWX\L there remains ample scope for making e-commerce PRUHLQFOXVLYHDQGEHQHƄFLDO Secretary-General of UNCTAD REVISITING THE DEVELOPMENT POTENTIAL OF 1 E-COMMERCE

E-commerce is rapidly transforming the way in which enterprises are interacting among each other as well as with consumers and Governments. As a result of changes in the landscape of ICTs, e-commerce is now growing rapidly in several emerging markets and developing economies. There is JURZLQJHYLGHQFHWKDWWKHXVHRIHFRPPHUFHKDVDVLJQLƄFDQWLPSDFWRQƄUP performance, especially on micro and small enterprises and in the services sector. Against this background, the Information Economy Report revisits the potential opportunities and risks of e-commerce and examines how countries FDQEHQHƄWPRUHIURPLW7KLVLQWURGXFWRU\FKDSWHUVHWVWKHVWDJH 2 INFORMATION ECONOMY REPORT 2015

A. E-COMMERCE AND to which people trust online transactions, cultural DEVELOPMENT preferences for face-to-face interaction and reliance RQFDVKLQVRFLHW\&RJQLWLYHREVWDFOHVƄQDOO\UHODWH The promise of ICTs to allow entrepreneurs and to poor ICT literacy, awareness and knowledge enterprises to buy and sell their products over related to e-commerce among both consumers digital networks has been among the development and enterprises. Such barriers impair a country’s priorities for the international community since the ability to participate on equal terms in international HQG RI WKH V ,Q  81&7$' HPSKDVL]HG e-commerce. WKDWqHOHFWURQLFFRPPHUFHKDVWKHSRWHQWLDOWREHD Changes in the ICT landscape have enlarged the major engine for trade and development on a global scope for businesses in developing countries to VFDOHr 81&7$' 7KHWRSLFZDVKLJKOLJKWHG HQJDJHLQHFRPPHUFH,Q6HSWHPEHUWKHLQLWLDO in the outcome documents from the World Summit SXEOLFRIIHULQJRQWKH1HZCameroon, Ghana and RI ,&7VLV DOVR HPSKDVL]HG LQ WKH GUDIW VXVWDLQDEOH Uganda, complementing its existing operations in development goals, notably in connection with &ÑWHGp,YRLUH(J\SW.HQ\D0RURFFRDQG1LJHULD women’s empowerment, infrastructure and as 7KHVH DFWLRQV RI $OLEDED DQG -XPLD DUH LOOXVWUDWLYH enabling technologies.1 of the growing importance of developing countries in the transforming world of e-commerce. Indeed, the (FRPPHUFH RIIHUV SRWHQWLDO EHQHƄWV LQ WKH IRUP of enhanced participation in international value fastest growth of e-commerce is now witnessed in chains, increased market access and reach, and Asia and Africa (chapter II). LPSURYHG LQWHUQDO DQG PDUNHW HIƄFLHQF\DV ZHOO DV Although most micro and small enterprises in lower transaction costs. However, the uptake of developing countries have yet to start buying or HFRPPHUFHZDVIRUDORQJWLPHFRQƄQHGPDLQO\WR selling products online, recent developments have large enterprises in developed countries (UNCTAD, H[SDQGHG WKHLU FKDQFHV RI VHL]LQJ EHQHƄWV IURP  %DUULHUVWRHFRPPHUFHKDYHEHHQFDWHJRUL]HG HFRPPHUFH DV HFRQRPLF VRFLRSROLWLFDO DQG FRJQLWLYH .VKHWUL • The connectivity situation has greatly improved,   (FRQRPLF EDUULHUV UHIHU IRU H[DPSOH WR notably as a result of the widespread uptake of inadequate ICT infrastructure and use, unreliable and mobile telephony and social media, which has costly power supply, limited use of credit cards, lack enabled more people and enterprises to have RI SXUFKDVLQJ SRZHU DQG XQGHUGHYHORSHG ƄQDQFLDO D ZHE SUHVHQFH 5LVLQJ OHYHOV RI ,QWHUQHW XVH systems. Sociopolitical barriers may involve weak enabled by deployment of international and legal and regulatory frameworks that limit the extent QDWLRQDOƄEUHRSWLFQHWZRUNVKDYHVLPLODUO\EHHQ

Box I.1. E-commerce, the World Summit on the Information Society and the World Trade Organization

(FRPPHUFHUHPDLQVRQWKHDJHQGDRI:6,6VWDNHKROGHUVDVVWUHVVHGLQWKHVHFWLRQRQHEXVLQHVVLQWKH:6,6 9LVLRQIRU:6,6%H\RQGFRQFOXGHGLQ-XQH ,78D  q0DNHLWSRVVLEOHIRUEXVLQHVVHVWRXVHUHOHYDQW,&7VDQGWREHQHƄWIXOO\IURPWKHLQIRUPDWLRQHFRQRP\LQFOXGLQJE\ FUHDWLQJDQHQDEOLQJHQYLURQPHQWIRUVHOOLQJDQGEX\LQJJRRGVRUVHUYLFHVYLD,&7QHWZRUNVr 7KH%DOL0LQLVWHULDO&RQIHUHQFHRIWKH:RUOG7UDGH2UJDQL]DWLRQ :72 KHOGLQ'HFHPEHUDOVRQRWHGWKHLPSRUWDQFH RIHFRPPHUFHLQLWVIXWXUHZRUNSURJUDPPH7KHPLQLVWHULDOGHFLVLRQ:70,1  :VWDWHGWKDWLW qVKDOOWDNHIRUZDUGWKHLVVXHVHPHUJLQJLQWKHGLVFXVVLRQVDQGWKHHYROYLQJDSSOLFDWLRQRIHFRPPHUFHWRHQKDQFH economic/development opportunities, with special consideration of the situation in developing countries, particularly in least developed country (LDC) members and least connected countries. It shall continue to examine opportunities DQGFKDOOHQJHVIRUDFFHVVWRHOHFWURQLFFRPPHUFHE\PLFURVPDOODQGPHGLXPVL]HGHQWHUSULVHVLQFOXGLQJVPDOO SURGXFHUVDQGVXSSOLHUVr Source: UNCTAD. CHAPTER I : REVISITING THE DEVELOPMENT POTENTIAL OF E-COMMERCE 3

LPSRUWDQW 0HDQZKLOH QHZ SD\PHQW VROXWLRQV the sale or purchase of goods or services, conducted provide a wider choice for both enterprises RYHU FRPSXWHU QHWZRUNV E\ PHWKRGV VSHFLƄFDOO\ designed for the purpose of receiving or placing of and consumers to conduct transactions online orders. The goods or services are ordered by those FKDSWHU,,,  methods, but the payment and the ultimate delivery • New applications, platforms and services are of the goods or services do not have to be conducted making e-commerce more accessible and online. An e-commerce transaction can be between enterprises, households, individuals, governments, easier to navigate, thereby lowering the barriers and other public or private organisations. To be to entry. New digital products (such as mobile included are orders made over the web, extranet or applications and games) and remotely delivered HOHFWURQLF GDWD LQWHUFKDQJH 7KH W\SH LV GHƄQHG E\ the method of placing the order. To be excluded are VHUYLFHV VXFKDVqPLFURZRUNr KDYHDOVRRSHQHG orders made by telephone calls, facsimile or manually new growth areas for developing countries typed e-mail. FKDSWHU},9  )RU WKH SXUSRVH RI WKLV UHSRUW WKH FRQFHSW RI • Local companies – sometimes backed by foreign e-commerce will cover purchases and sales investors – providing e-commerce solutions are conducted over computer networks, using rapidly appearing in developing countries, with multiple formats and devices, including the web offers that are tailored to the needs and demands and electronic data interchange, using personal RIORFDOXVHUV FKDSWHUV},,DQG,9  computers, laptops, tablets and mobile phones of • There is growing readiness among enterprises YDU\LQJOHYHOVRIVRSKLVWLFDWLRQ(FRPPHUFHPD\ and consumers to conduct business online as involve physical goods as well as intangible (digital) well as more awareness among Governments products and services that can be delivered and lawmakers of the need for relevant legislation digitally. and regulation to enhance trust in e-commerce FKDSWHU}9  There are various electronic relationships between Governments, enterprises, individuals/consumers DQG RWKHU SXEOLF DQG SULYDWH RUJDQL]DWLRQV 7KH B. DEFINITIONS OF SULPHIRFXVKHUHLVRQ%%DQG%&WUDQVDFWLRQV E-COMMERCE Where appropriate, reference is also made to FRQVXPHUWRFRQVXPHU &&  HFRPPHUFH DQG 7KHUHDUHYDULRXVGHƄQLWLRQVRIHFRPPHUFH7KLVUHSRUW WR D OHVVHU H[WHQW EXVLQHVVWRJRYHUQPHQW %*  GUDZVRQWKHRQHDGRSWHGE\2(&' 2(&' 4 WUDQVDFWLRQV ER[}, 

Box I.2. Types of e-commerce

• B2B: Accounts for the bulk of e-commerce (chapter II). It involves transactions between businesses, such as between DPDQXIDFWXUHUDQGDZKROHVDOHURUEHWZHHQDZKROHVDOHUDQGDUHWDLOHU6RPHVWXGLHVVXJJHVWWKDW%%RIIHUV JUHDWHU SRWHQWLDO EHQHƄWV IRU VPDOOHU EXVLQHVVHV WKDQ RWKHU IRUPV RI HFRPPHUFH .VKHWUL DQG 'KRODNLD  5HKEHLQ )URPWKHSHUVSHFWLYHRIDVPDOOHQWHUSULVHHQJDJLQJLQ%%HFRPPHUFHPD\EHDUHTXLUHPHQW IRUSDUWLFLSDWLQJLQQDWLRQDORUJOREDOYDOXHFKDLQV7KHUHDUHYDULRXVVSHFLDOL]HG%%SODWIRUPVW\SLFDOO\FDWHULQJWR certain industries or value chains.

• B2C:,QYROYHVVDOHVE\qSXUHSOD\rHFRPPHUFHHQWHUSULVHVWRFRQVXPHUVDQGE\WUDGLWLRQDOEULFNVDQGPRUWDUUHWDLO RUPDQXIDFWXULQJƄUPVWKDWDGGDQRQOLQHVDOHVFKDQQHO6HOOLQJGLUHFWO\WRFRQVXPHUVYLD,&7QHWZRUNVFDQKHOSPLFUR and small businesses to reach new markets, both domestically and internationally. There is a wide range of channels to reach consumers, including social networks, crowdsourcing platforms, dedicated e-commerce websites, mobile applications and more.

• C2C:7KLVFDQEHVHHQDVWKHPRGHUQYHUVLRQRIXVLQJWKHFODVVLƄHGDGYHUWLVLQJVHFWLRQLQDORFDOQHZVSDSHURUJRLQJ WRDQDXFWLRQ,WFRYHUVRQOLQHDXFWLRQSODWIRUPV VXFKDVH%D\RU7DREDR DQGVDOHVZLWKLQRQOLQHFRPPXQLWLHV&& platforms offer possibilities for informal enterprises to engage in e-commerce.

• B2G:7KHVHWUDQVDFWLRQVDUHVLPLODUWR%%H[FHSWWKDWWKHEX\HULQWKLVFDVHLVDJRYHUQPHQWHQWLW\VXFKDVLQWKH case of public e-procurement.

Source: UNCTAD. 4 INFORMATION ECONOMY REPORT 2015

C. IMPLICATIONS OF WR WKHP DQG QRW RQO\ GXULQJ RIƄFLDO RSHQLQJ KRXUV E-COMMERCE RI WUDGLWLRQDO EULFNVDQGPRUWDU VWRUHV 0RUHRYHU consumer choice is expanded as products from far DƄHOG FDQ PRUH HDVLO\ EH GLVFRYHUHG RUGHUHG DQG 1. The e-commerce value chain delivered over long distances. The consumer surplus IURPWKH,QWHUQHWLQWKH*FRXQWULHVZDVHVWLPDWHG The shift towards e-commerce is already LQWRDYHUDJHDERXW}SHUSHUVRQRUDERXW transforming the behaviour of businesses and } SHU FHQW RI JURVV GRPHVWLF SURGXFW *'3 5 A consumers. The role of ICT applications and VWXG\ RI HFRPPHUFH LQ WKH (XURSHDQ 8QLRQ IRXQG services is expanding across the entire value chain that enhanced choice from buying online rather than of e-commerce. The e-commerce process can RIƅLQHZDVDPRUHLPSRUWDQWFRQWULEXWRUWRLQFUHDVHG EHGLYLGHGLQWRIRXUVWDJHV ƄJXUH}, LQIRUPDWLRQ welfare gains for consumers than lower prices (Civic gathering, agreement, transaction and delivery. &RQVXOWLQJ  7KHVH VWDJHV DSSO\ HTXDOO\ WR %& DQG %% e-commerce. At each stage, there are potential At the second and third stages, online applications implications for consumers, enterprises and other and payment solutions represent alternative solutions RUJDQL]DWLRQVDVZHOODV*RYHUQPHQWV to having to visit a shop or making a phone call, using cash or paying by credit card at the shop in question. $WWKHƄUVWVWDJH,QWHUQHWEURZVLQJHPDLOLQTXLULHVDQG )LQDOO\VRPH SURGXFWV FDQ EH GHOLYHUHG GLJLWDOO\ IRU various social networking platforms help consumers to example, downloading an e-book) as opposed to compare prices and features of products rather than physically (shipping a book). relying on traditional information sources, including YLVLWV WR VSHFLƄF SK\VLFDO VDOHV RXWOHWV %X\HUV YLVLW 0DQ\FRQVXPHUVDQGHQWHUSULVHVUHPDLQUHOXFWDQW websites with reviews conducted by other consumers to change their behaviour and start making and make their purchases at times that are convenient purchases online despite the advantages. This may

)LJXUH}, 7KHUROHRI,&7VLQWKHHFRPPHUFHWUDQVDFWLRQYDOXHFKDLQ

OFF-LINE

Newspaper Phone Cash payment Post

Radio/TV Credit card Shop RIƃLQH Direct

SupplierInformation Agreement Transaction Delivery Customer

App On-line E-shop transfert (IXOƂOPHQW Web E-payment On-line App delivery E-mail

ON-LINE

Source: 2(&'   CHAPTER I : REVISITING THE DEVELOPMENT POTENTIAL OF E-COMMERCE 5

be linked to concerns that payments will be lost, of delivering physical products through dedicated that data provided online will be compromised or HIXOƄOPHQWVHUYLFHV 2(&'  shared without their consent, that goods or services acquired will not meet the quality expected, and In the e-commerce sector itself, entrepreneurs and that it will be difficult to return them if so desired. enterprises in developing countries are discovering 2WKHU EDUULHUV WR RQOLQH SXUFKDVHV PD\ LQFOXGH QHZEXVLQHVVRSSRUWXQLWLHV5HFHQWH[DPSOHVLQFOXGH inadequate or expensive ICT infrastructure and the introduction of payment solutions (for example, services, poor logistics and transportation services, $OLSD\LQ&KLQDRU-DPER3D\LQ.HQ\D HFRPPHUFH or a preference among consumers to touch and SODWIRUPV IRUH[DPSOH0HUFDGR/LEUHLQ/DWLQ$PHULFD feel the products before making a decision to DQG=RRP7DQ]DQLD DQGLQQRYDWLYHORJLVWLFVVXFKDV EX\ $JZX  2FKD  &RSHQKDJHQ the motorbike delivery services of Giao Hang Nhanh in (FRQRPLFV  VHHDOVRDQH[DPSOHIURP6RXWK 9LHW1DP VHHFKDSWHU,,  $IULFDILJXUH},  At the same time, most micro and small enterprises in )RU HQWHUSULVHV HFRPPHUFH RIIHUV ERWK developing countries are still unaware of the possibilities opportunities and risks. New ICT applications and presented by e-commerce (Stockdale and Standing, services are helping to reduce various costs for =DLHGHWDO7KXODQLHWDO 7KH\RIWHQ suppliers. Leveraging different online and mobile ODFNWKHFDSDELOLWLHVWREHQHƄWIURPWKHP /DZUHQFHDQG channels may enable a seller to reach more potential 7DU+RXUDOLHWDO5DPVH\HWDO $SDUW customers (both consumers and businesses) in IURP,&7VNLOOVWKHUHLVDQHHGIRULQKRXVHRUJDQL]DWLRQDO domestic and foreign markets in a more targeted capacity to handle orders, control quality and receive way and sometimes at lower cost than through SD\PHQW)DFWRUVVXFKDVSRRUTXDOLW\RIWKHXQGHUO\LQJ WUDGLWLRQDO FKDQQHOV 0HDQZKLOH VXSSOLHUV WKDW UHO\ ICT infrastructure, high adjustment costs, uncertainty more (or entirely) on e-commerce may be able to surrounding e-commerce and limited perceived strategic reduce investments in physical infrastructure (such YDOXHIRUWKHƄUPKDYHEHHQIRXQGWRGDPSHQWKHLQWHUHVW DVEXLOGLQJV LQH[SHQVLYHORFDWLRQV$QGƄQDOO\WKHUH DPRQJ ƄUPV WR HQJDJH LQ HFRPPHUFH %HQ $RXQ may be ways to reduce the delivery cost (especially 3HOWLHU DQG 9LFHQWH  +ROOHQVWHLQ DQG :RHUWHU for digital products), and to use innovative ways *UDQGRQDQG3HDUVRQ 

)LJXUH}, 5HDVRQVIRU,QWHUQHWXVHUVLQ6RXWK$IULFDQRWWRPDNHGLJLWDOSXUFKDVHV 3HUFHQWRIUHVSRQGHQWV

Prefer to touch and feel the product 49.3 before buying

Do not trust online payments 36.8

Afraid the products will not suit me 10.7

Products do not interest me 9.1

Do not trust the site 8.7

Long delivery times 4.1

Other 11.3

0 102030405060 Per cent

Source: ,QWHUDFWLYH$GYHUWLVLQJ%XUHDX6RXWK$IULFD 6 INFORMATION ECONOMY REPORT 2015

0HDQZKLOH WKH VKLIW WR HFRPPHUFH UHSUHVHQWV   $ UHYLHZ RI WKH HPSLULFDO OLWHUDWXUH RQ ,&7V a potential threat to some enterprises. With the DQG SURGXFWLYLW\ LQ ƄUPV VXJJHVWV D FOHDU SRVLWLYH entrance of competitors offering new product features impact, possibly increasing over time, but with the DQG FXVWRPHU VHUYLFHV HFRPPHUFH LV UHGHƄQLQJ caveat that ICTs need to be well embedded to give WKH PDUNHWSODFH )RU H[DPSOH WUDGLWLRQDO EULFNV HIIHFW &DUGRQD HW DO   )RU LQVWDQFH WKLV and-mortar stores need to adapt to enhanced price could mean complementary investments in skills transparency and competition by providing new online DQGFKDQJHVLQRUJDQL]DWLRQDOVWUXFWXUH6WXGLHVLQ sales channels, investing in new equipment and (XURSHLQGLFDWHWKDWWKHUHFRXOGEHDWKUHVKROGDV services, building complementary skills and revising ZHOODVDFHLOLQJUHJDUGLQJWKHSURVSHFWRIEHQHƄWLQJ their business strategies. This transition is not easy IURP,&7XVDJHLQƄUPV)RUH[DPSOHWKHUHODWLRQVKLS and even leading retailers have wrestled with it. between broadband-Internet-enabled employees DQG ƄUP SHUIRUPDQFH WHQGV WR ZHDNHQ ZKHQ WKH )URPWKHSRLQWRIYLHZRI Governments, e-commerce intensity of usage comes close to saturation, but FDQ EULQJ EHQHƄWV DV ZHOO DV FKDOOHQJHV ,W PD\ UHPDLQVVWURQJIRUƄUPVDWOHVVLQWHQVH,&7XVDJH spur new job creation in the ICT sector, related (XURVWDW  to software development, information technology (IT) consultancy services, web hosting and, of $ ƄHOG RI WKH OLWHUDWXUH WKDW LV FORVHO\ UHODWHG WR course, in enterprises that become more successful HFRPPHUFH HPSKDVL]HV ,&7V DV D IDFLOLWDWRU thanks to expanded online sales. It may help to RI LQWHUQDWLRQDO WUDGH 0DUWHQV  0RUJDQ boost exports, when domestic enterprises are 7KRPDV  )UDXPHQL   %\ XVLQJ ZHEVLWHV able to break into foreign markets to connect with IRU PDUNHWLQJ DQG HVDOHV FKDQQHOV ƄUPV PD\ EH international supply chains, and add competitive able to sell to markets otherwise not reachable due pressure in the economy. WR IRU H[DPSOH GLVWDQFH RU SROLWLFDO V\VWHPV %\ reducing the barriers to trade, the Internet facilitates 2Q WKH ƅLS VLGH WKHUH LV WKH ULVN WKDW WHFKQRORJ\ international e-commerce, with most of the short- VDYY\ IRUHLJQ FRPSHWLWRUV RXWGR ORFDO ƄUPV JDLQLQJ term gains expected to arise in developed countries greater market shares from e-commerce compared but with a shift to developing countries in the long WRORFDOƄUPV*RYHUQPHQWVPD\DOVREHFRQFHUQHG UXQ 7HU]L &RPSDULVRQVEHWZHHQWUDGHRQOLQH ZLWKWD[HURVLRQDQGWUDQVIHUSULFLQJ &RFNƄHOGHWDO DQG RIƅLQH KDYH IRXQG WKDW WKH HIIHFW RI GLVWDQFH LV  VHHDOVRFKDSWHU9, *UHDWHUUHOLDQFHRQRQOLQH considerably smaller in the case of e-commerce sales has also been associated with a proliferation of thanks to lower information costs and greater trust fraudulent activities and various cybercrimes (chapter /HQGOHHWDO  9  0RUHRYHU LOOHJDO DQG LOOLFLW JRRGV LQFUHDVH WKH burden on customs and posts, which has led to the $VXUYH\RIHVWDEOLVKPHQWVLQWKH5HSXEOLFRI.RUHD implementation of new practices to increase detection ZLWK  RU PRUH HPSOR\HHV DQG ZLWK H[SHULHQFH of selling goods or services online found the most DQG FRQƄVFDWLRQ %H\RQG WKH HFRQRPLF ƄHOG important effects of e-commerce to be reduced e-commerce has given rise to concerns related to the transaction time and faster business processes, KHDOWKVDIHW\DQGFXOWXUDOGLPHQVLRQV)RUH[DPSOH lower transaction costs and ability to reach new ZKLOHq,QWHUQHWSKDUPDFLHVrFDQKHOSLPSURYHDFFHVV FXVWRPHUV 5HSXEOLFRI.RUHD0LQLVWU\RI6HFXULW\ to medicines there are doubts related to transparency, DQG 3XEOLF $GPLQLVWUDWLRQ   (QJDJLQJ LQ fraud, product quality, and even its viability as an e-business and online sales has also been found HWKLFDO EXVLQHVV PRGHO :RUOG +HDOWK 2UJDQL]DWLRQ WR DGG YDOXH WR UHWDLO ILUPV =KX DQG .UDHPHU    ;LD DQG =KDQJ   +DYLQJ DQ RQOLQH channel provided significant improvements in 2. Economic impacts of e-commerce sales, cost, inventory and return on investments. 0HDQZKLOH HSXUFKDVHV EXW QRW HVDOHV  KDG D The literature on ICTs as an enabler of economic positive significant effect on firm efficiency among growth is vast, ranging from the aggregates (Stiroh PDQXIDFWXULQJILUPVLQ6SDLQ 4XLUÐV5RPHURDQG DQG-RUJHQVRQ DQGLQYHVWPHQWVLQKDUGZDUH 5RGUÊJXH] 5RGUÊJXH]   3RVLWLYH HIIHFWV RI to more disaggregated studies on selected groups e-commerce to productivity were also observed RI ƄUPV %U\QMROIVVRQ DQG +LWW  9DQ 5HHQHQ IRU PDQXIDFWXULQJ FRPSDQLHV LQ 7DLZDQ3URYLQFH HW DO  %DUWHOVPDQ  %ODFN DQG /\QFK RI&KLQD /LXHWDO  CHAPTER I : REVISITING THE DEVELOPMENT POTENTIAL OF E-COMMERCE 7

3. New evidence on the productivity SRLQWVRYHUWKHSHULRGt RUSHUFHQWDJH impact of e-commerce in Europe points per year). ([SUHVVHG GLIIHUHQWO\ HVDOHV DFWLYLWLHVDFFRXQWHGIRU}SHUFHQWRIWKHWRWDOJURZWK Until recently, data did not allow for econometrical RI ODERXU SURGXFWLYLW\ IRU WKH SHULRG t D DQDO\VLV RI WKH VSHFLƄF OLQN EHWZHHQ HFRPPHUFH VL]DEOHLQFUHDVHLQODERXUSURGXFWLYLW\RIWKHEXVLQHVV activities and enterprise productivity. This is still the sector in the countries included. Investigation of the case for developing countries. However, a unique data HIIHFWV RQ ƄUPV RI GLIIHUHQW VL]HV UHYHDOV WKDW WKH VHWFROOHFWHGWKURXJKWKH(XURSHDQ8QLRQKDUPRQL]HG LPSDFW LV VWURQJHU RQ VPDOO WKDQ RQ PHGLXPVL]HG VXUYH\RQ,&7XVDJHLQƄUPVLQ(XURSHDQFRXQWULHV ƄUPV )RU ODUJH HQWHUSULVHV WKH LPSDFW RI HVDOHV IRU WKH SHULRG t DOORZV IRU LQGHSWK DFWLYLWLHV ZDV QRW VLJQLƄFDQW SRVVLEO\ EHFDXVH WKH analysis. The use of a dynamic panel data model EHQHƄWVRIHFRPPHUFHIRUWKHPRFFXUUHGHDUOLHU$OO RQPLFURDJJUHJDWHGƄUPOHYHOGDWDPDGHLWSRVVLEOH UHVXOWVDUHUREXVWDFURVVGLIIHUHQWVSHFLƄFDWLRQVRIWKH to distinguish between short- and long-term effects model and estimation methods. 9 and to control for endogeneity of e-sales activities. 7KLV XQLTXH DQDO\VLV RI (XURSHDQ GDWD SURYLGHV (VDOHVZHUHPHDVXUHGLQWZRZD\VDVWKHVKDUHRI QHZ LQVLJKWV LQWR WKH OLQN EHWZHHQ HVDOHV DQG ƄUP ƄUPVVHOOLQJRYHUHOHFWURQLFGDWDLQWHUFKDQJH (', RU performance. In summary, a considerable share of websites, and as the share of sales conducted online. the total labour productivity growth during the period 7KXVHVDOHVFRYHUERWK%%DQG%&WUDQVDFWLRQV t FDQ EH DWWULEXWHG WR LQFUHDVHG XVH RI Despite considerable growth in the past decade, the e-sales. The results furthermore indicate that the proportion of e-sales to total sales remains small in SURGXFWLYLW\HIIHFWVDUHVWURQJHUIRUVHUYLFHVƄUPVDQG 14 (XURSH2QDYHUDJHFORVHWRRQHVHYHQWKRIVDOHVLV for small enterprises. The analysis refers to a region FRQGXFWHGRYHUGLJLWDOV\VWHPV,QDSSUR[LPDWHO\ RIUHODWLYHO\KLJKPDWXULW\RI,&7XVH0RUHGDWDDQG RQH RXW RI IRXU ƄUPV ZDV DFWLYH ZLWK HVDOHV DQG research are therefore needed to establish to what VRPHZKDW PRUH WKDQ KDOI RI WKH ƄUPV HQJDJHG LQ extent these results can be extended to countries at HLWKHUEX\LQJRUVHOOLQJRQOLQH(FRPPHUFHLQ(XURSH lower levels of ICT readiness. However, in combination LVPRUHFRPPRQDPRQJODUJHƄUPVKLJKSURGXFWLYLW\ with previous studies this analysis offers empirical ƄUPV H[SRUWLQJ ƄUPV DQG LQ ƄUPV ZLWK LQWHUQDWLRQDO evidence that a higher degree of e-sales helps H[SHULHQFH0RUHRYHUƄUPVZLWKZLGHUXVDJHRI,&7V enterprises become more productive. measured by the proportion of broadband-Internet- 0HDQZKLOH WKHUH LV D QHHG IRU DGGLWLRQDO UHVHDUFK enabled employees, tend to have a higher level of on the broader impacts of e-commerce, concerning ODERXUSURGXFWLYLW\ )DONDQG+DJVWHQ  effects on, for example, employment, income (FRQRPHWULF DQDO\VLV t XVLQJ GLIIHUHQW PRGHO distribution, competition, structural transformation, VSHFLƄFDWLRQV DQG FRQWUROOLQJ IRU LQGXVWU\ FRXQWU\ taxation and the balance of trade. DQG WLPH HIIHFWV t VKRZV D SRVLWLYH DQG VLJQLƄFDQW relationship between changes in labour productivity D. ROADMAP TO THE DQG FKDQJHV LQ WKH SHUFHQWDJH RI ƄUPV HQJDJHG REPORT in e-sales. Industries with an increase in the SURSRUWLRQ RI ƄUPV VHOOLQJ RQOLQH H[SHULHQFHG KLJKHU ,QYLHZRIWKHSRWHQWLDOEHQHƄWVDQGFKDOOHQJHVIURP labour productivity growth.11 The magnitude of the greater uptake of e-commerce, the following chapters UHODWLRQVKLSGLIIHUVEHWZHHQLQGXVWULHV)RUWKHSHULRG of the report examine trends and developments in t D RQHSHUFHQWDJHSRLQW LQFUHDVH LQ WKH the evolving e-commerce ecosystem and discuss VKDUH RI ƄUPV ZLWK HVDOHV DFWLYLWLHV UDLVHG WKH UDWH possible implications for developing countries. The RI ODERXU SURGXFWLYLW\ JURZWK E\  SHUFHQWDJH report is structured as follows. points over a two-year period. Given the low rate of Chapter II reviews global and regional e-commerce SURGXFWLYLW\JURZWKLQPRVW(XURSHDQFRXQWULHVWKLV WUHQGV %DVHG RQ DQ H[WHQVLYH UHYLHZ RI RIƄFLDO effect is not negligible. The relationship appears to be statistics and private-sector data, it investigates the stronger for services than for manufacturing, and the PDJQLWXGHRIHFRPPHUFHLGHQWLƄHVWKHPDLQPDUNHWV effect is higher over the long term. and considers the extent of uptake in different parts (VWLPDWHVVXJJHVWWKDWLQFUHDVHGXVHRIHVDOHVOHGWR of the world. It highlights the leading e-commerce DULVHLQODERXUSURGXFWLYLW\JURZWKE\SHUFHQWDJH FRPSDQLHV DQG LGHQWLƄHV ZKDW JRRGV DQG VHUYLFHV 8 INFORMATION ECONOMY REPORT 2015

are most frequently traded online. The second part RUGHUIXOƄOPHQW,QWKLVFRQWH[WLWFRQVLGHUVWKHH[WHQW of the chapter provides brief insights into regional WRZKLFKVPDOOƄUPVLQGHYHORSLQJFRXQWULHVDUHDEOHWR developments in Africa, Asia and Latin America. make use of certain global e-commerce platforms and payment solutions. The second part of the chapter is Chapter III sets out to measure the e-commerce devoted to rural e-commerce and analyses the diverse readiness of countries. It discusses the main factors experiences of three Asian economies in this area. facilitating and constraining e-commerce – with an HPSKDVLV RQ %& WUDQVDFWLRQV t VXFK DV ,QWHUQHW &KDSWHU 9 PDSV WKH DYDLODELOLW\ RI OHJLVODWLRQ LQ NH\ connectivity, payment systems and delivery systems. areas of e-commerce around the world. Special 7KH FKDSWHU DOVR LQWURGXFHV WKH 81&7$' %& attention is given to e-transaction laws, consumer (FRPPHUFH ,QGH[ FRYHULQJ  FRXQWULHV ,W LV protection, data protection and privacy, and particularly useful given the dearth of data about F\EHUFULPH ,W LGHQWLƄHV UHPDLQLQJ FKDOOHQJHV IRU e-commerce usage in many low-income economies. compatibility of laws and their enforcement in view The Index represents a new tool for countries to of the development of electronic transactions. The benchmark their e-commerce readiness against chapter furthermore highlights selected legal issues other locations and to identify areas of strengths and currently facing e-commerce development globally weaknesses. and proposes a set of recommendations. &KDSWHU,9WXUQVWKHDWWHQWLRQWRGLIIHUHQWRSWLRQVWKDW 7KH ƄQDO FKDSWHU FRQFOXGHV DQG SURYLGHV RYHUDOO micro and small enterprises can explore to engage recommendations for the development of national effectively in e-commerce. It examines various platforms strategies and policies for the promotion of e-commerce and tools to determine their relevance for marketing LQGHYHORSLQJFRXQWULHV,WDOVRHPSKDVL]HVWKHUROHRI and selling different products online. It discusses the the international community in creating an environment respective advantages and disadvantages, taking into IRU PD[LPL]LQJ SRWHQWLDO EHQHƄWV IURP HFRPPHUFH account issues related to payment processing and DQGIRUPLQLPL]LQJFRVWVDQGULVNV CHAPTER I : REVISITING THE DEVELOPMENT POTENTIAL OF E-COMMERCE 9

NOTES

1 6HHJRDOVDQGDYDLODEOHDWKWWSVXVWDLQDEOHGHYHORSPHQWXQRUJFRQWHQWGRFXPHQWV6'*VB),1$/B 3URSRVDORI2:*B-XO\DWKUVYHUSGI DFFHVVHG}-DQXDU\ 

 6HHq$OLEDEDLVVXHVDGGLWLRQDOVKDUHVWRUDLVH,32WRWDOWR}ELOOLRQUHSRUWrReuters}6HSWHPEHUDYDLODEOH at KWWSZZZUHXWHUVFRPDUWLFOHXVDOLEDEDLSRLG86.%1+++ DFFHVVHG}-DQXDU\  

 6HHq$IULFDHFRPPHUFHƄUPH[SDQGVWRQHZPDUNHWVrReuters-XO\DYDLODEOHDWKWWSZZZUHXWHUV FRPDUWLFOHDIULFDUHWDLOLQWHUQHWLG86/13;&8 DFFHVVHG}-DQXDU\ 

4 7KLVGHƄQLWLRQGHYLDWHVIURPWKDWXVHGLQWKH:72ZRUNSURJUDPPHRQHFRPPHUFH,WXQGHUVWDQGVHFRPPHUFH WRPHDQWKHqSURGXFWLRQGLVWULEXWLRQPDUNHWLQJVDOHRUGHOLYHU\RIJRRGVDQGVHUYLFHVE\HOHFWURQLFPHDQVrVHH KWWSZZZZWRRUJHQJOLVKWUDWRSBHHFRPBHZNSURJBHKWP DFFHVVHG}-DQXDU\ 

5 6HH q7KH ,QWHUQHW HFRQRP\ LQ WKH *r bcg.perspectives } 0DUFK  DYDLODEOH DW KWWSVZZZ EFJSHUVSHFWLYHVFRPFRQWHQWDUWLFOHVPHGLDBHQWHUWDLQPHQWBVWUDWHJLFBSODQQLQJBBBWULOOLRQBRSSRUWXQLW\BLQWHUQHWB HFRQRP\BJ DFFHVVHG}-DQXDU\ 

 6HHIRUH[DPSOHq+ 0GHOD\VODXQFKRI86RQOLQHVKRSrFinancial Times, }6HSWHPEHUDYDLODEOHDWKWWS ZZZIWFRPFPVVHDHEIIHDEGFKWPOD[]]3;D25.* DFFHVVHG } -DQXDU\  

 )RURWKHUVWXGLHVVKRZLQJSRVLWLYHDVVRFLDWLRQVEHWZHHQHFRPPHUFHDQGƄUPSHUIRUPDQFHVHH&RORPERHWDO  /LXHWDO  DQG.RQLQJVDQG5RRGKRIW  

 6WDWLVWLFDO DQG DQDO\WLFDO ZRUN E\ WKH 2(&' (XURVWDW DQG WKH VRFDOOHG (XURSHDQ 8QLRQ ./(06 SURMHFW KDV EURDGHQHGWKHƄHOGRI,&7VWDWLVWLFVDQGIDFLOLWDWHGLPSDFWDQDO\VHV7KH(66/DLWSURMHFWKDVWDNHQWKLVDVWHS IXUWKHUWKURXJKWKHOLQNLQJRIƄUPOHYHOGDWDDOORZLQJVWDWLVWLFVRQ,&7XVDJHRIƄUPVWRDSSHDULQVHYHUDOGLPHQVLRQV QRWSUHYLRXVO\DYDLODEOH 0LFUR0RPHQWV'DWDEDVH 

9 q0LFURDJJUHJDWHGrLQWKLVFDVHPHDQVWKDWLQIRUPDWLRQKDVEHHQVRXUFHGDWWKHOHYHORIWKHƄUPEXWGXHWRGLVFORVXUH LVVXHVƄUPVKDYHWKHQEHHQJURXSHGE\LQGXVWU\RURWKHUƄUPFKDUDFWHULVWLFVVXFKDVVL]HDQGDJHFODVV

 7KHIXOODQDO\VLVDQGPRUHLQIRUPDWLRQRQWKHPHWKRGRORJ\DQGVWDWLVWLFDODQDO\VLVDUHSURYLGHGLQ)DONDQG+DJVWHQ  

11 7KHVHUHVXOWVDUHLQOLQHZLWKWKRVHRI;LDDQG=KDQJ  ZKRIRXQGWKDWRQOLQHVDOHVFKDQQHOVLQFUHDVHGVDOHV YROXPHVIRUUHWDLOLQJƄUPV

 This result is based on a regression method in which all variables are measured as change over a two-year period.

 %DVHGRQDG\QDPLFSDQHOGDWDPRGHOFRQWUROOLQJIRUHQGRJHQHLW\

14 It should be noted that higher labour productivity growth as a result of e-commerce activities does not necessarily translate into new jobs. In developed countries, there is empirical evidence that industries with faster growth of ICT capital had greater increases in relative demand for highly educated workers and larger decline in relative demand IRUPLGGOHHGXFDWHGZRUNHUV 0LFKDHOVHWDO 7KLVPD\DOVRKROGWUXHIRUWKHHIIHFWVRIHFRPPHUFHRQWKH skill structure of the workforce.

GLOBAL AND REGIONAL TRENDS 2

The global landscape for e-commerce is rapidly evolving, with developing countries assuming an increasingly important role. This chapter reviews recent trends at global and regional levels. It presents new estimates of the size of e-commerce, distinguishing between B2B and B2C. The chapter furthermore examines how the pattern of e-commerce by enterprises varies depending on enterprise size and industry. It notes the rapid growth of e-commerce in Asia as well as the dynamic evolution of online commercial activities in parts of sub-Saharan Africa and in Latin America. 12 INFORMATION ECONOMY REPORT 2015

A. THE GLOBAL %XVLQHVVWREXVLQHVV WUDQVDFWLRQV DFFRXQW IRU WKH E-COMMERCE overwhelming share of e-commerce revenue. In the United States, total revenue from e-commerce sales of MARKET IS EVOLVING WKHVHFWRUVFRYHUHGDPRXQWHGWR}WULOOLRQLQ FRUUHVSRQGLQJWRPRUHWKDQ}SHUFHQWRIWKHLUWRWDO 1. Market size estimates UHYHQXH WDEOH},, 7KHLPSRUWDQFHRIHFRPPHUFHKDV increased substantially in the past decade. Its share in 0HDVXULQJ HFRPPHUFH LV FKDOOHQJLQJ 7KHUH DUH total revenue (excluding the selected services category) QR FRPSUHKHQVLYH RIƄFLDO VWDWLVWLFV RQ WKH YDOXH RI GRXEOHG IURP } SHU FHQW LQ  WR } SHU FHQW LQ GRPHVWLF DQG LQWHUQDWLRQDO HFRPPHUFH 2QO\ D IHZ  ,Q PDQXIDFWXULQJ WKH VKDUH RI HFRPPHUFH LQ countries – mainly developed ones – compile data on WRWDO UHYHQXH VKRW XS IURP } SHU FHQW WR DV PXFK e-commerce revenue. Available information suggests DV } SHU FHQW GXULQJ WKH VDPH SHULRG WDEOH} ,,  that the market for e-commerce has expanded 0DQXIDFWXULQJDQGZKROHVDOHWUDGH WKHEXONRIZKLFK VLJQLƄFDQWO\LQWKHSDVWGHFDGHDQGWKDWLWFRQWLQXHV FRQFHUQV %%  WRJHWKHU DFFRXQWHG IRU } SHU FHQW to grow. Such observations are supported by the of total e-commerce revenue, whereas retail (which HVWLPDWHV PDGH E\ SULYDWH FRQVXOWDQF\ ƄUPV :KLOH FRUUHVSRQGVWR%& DPRXQWHGWRMXVW}SHUFHQW global e-commerce is still dominated by developed countries, fast growth is observed in developing 7KH SUHGRPLQDQFH RI %% LV FRQƄUPHG LQ RWKHU regions, especially in Asia. FRXQWULHV ,Q &DQDGD DOPRVW WZR WKLUGV } SHU

7DEOH},, 8QLWHG6WDWHV7RWDODQGHFRPPHUFHUHYHQXHVE\VHFWRUt }ELOOLRQV

Share of Share of Merchant Value of Selected ser- e-commerce e-commerce Year Manufacturing wholesale 5HWDLO Total shipment vice industries trade trade LQFOXGLQJ H[FOXGLQJ VHUYLFHV VHUYLFHV

2002 Total 3 921 4 162 NA 3 129 11 211 NA E-commerce 752 880 NA 45 1 677 NA 15% 2003 Total 4 015 4 367 NA 3 263 11 646 NA E-commerce 843 968 NA 57 1 868 NA 16% 2004 Total 4 309 4 840 NA 3 474 12 622 NA E-commerce 996 1 060 NA 72 2 129 NA 17% 2005 Total 4 742 5 243 NA 3 690 13 675 NA E-commerce 1 344 1 228 NA 91 2 663 NA 19% 2006 Total 5 016 5 584 NA 3 874 14 473 NA E-commerce 1 567 1 305 NA 113 2 985 NA 21% 2007 Total 5 338 5 888 NA 3 999 15 226 NA E-commerce 1 879 1 395 NA 136 3 410 NA 22% 2008 Total 5 468 6 136 NA 3 946 15 550 NA E-commerce 2 171 1 422 NA 141 3 734 NA 24% 2009 Total 4 420 5 144 NA 3 630 13 193 NA E-commerce 1 892 1 355 NA 145 3 391 NA 26% 2010 Total 4 905 5 757 11 164 3 841 25 668 E-commerce 2 350 1 547 302 169 4 368 17% 28% 2011 Total 5 481 6 451 11 544 4 133 27 610 E-commerce 2 704 1 696 338 198 4 936 18% 29% 2012 Total 5 756 6 771 12 004 4 344 28 876 E-commerce 2 989 1 789 366 227 5 371 19% 30%

Source: 8QLWHG6WDWHV&HQVXV%XUHDXDYDLODEOHDWKWWSZZZFHQVXVJRYHFRQHVWDWVDOOWDEOHVKWPO DFFHVVHG}-DQXDU\   CHAPTER II : GLOBAL AND REGIONAL TRENDS 13

)LJXUH},, (FRPPHUFHUHYHQXHVLQWKH(XURSHDQ8QLRQ

B2C 2% of total turnover 13% of e-commerce turnover 41% of web sales Web sales 4% of total turnover 30% of e-commerce B2B/B2G turnover 2% of total turnover E-commerce 18% of e-commerce turnover 14% of total turnover 58% of web sales

EDI sales 10% of total turnover 69% of e-commerce turnover

Source: 81&7$'DGDSWHGIURP(85267$7 Note: 1XPEHUVPD\QRWDGGWR}SHUFHQWGXHWRURXQGLQJ cent) of the value of online sales by enterprises were ZKHUHDV WKH 8QLWHG .LQJGRP RI *UHDW %ULWDLQ DQG DWWULEXWDEOH}WR%%LQ1,QWKH5HSXEOLFRI.RUHD Northern Ireland had the highest average expenditure %% DFFRXQWHG IRU } SHU FHQW RI DOO HFRPPHUFH SHURQOLQHEX\HUDWDOPRVWLQ7KHWRS  UHYHQXHLQ DQGLQWKH5XVVLDQ)HGHUDWLRQWKDW  FRXQWULHV DFFRXQWHG IRU VRPH } SHU FHQW RI VKDUHZDVHVWLPDWHGDW}SHUFHQWLQIROORZHG HVWLPDWHG WRWDO %& UHYHQXHV DV UHSRUWHG E\ WKH  E\%* }SHUFHQW DQG%& }SHUFHQW  ,Q(XURSH FRQVXOWDQF\H0DUNHWHU7KHVDPHFRXQWULHVJHQHUDWHG VRPH}SHUFHQWRIWKHUHYHQXHRI(XURSHDQ8QLRQ D WRWDO RI } WULOOLRQ LQ %% VDOHV LQ t HQWHUSULVHVZLWKRUPRUHHPSOR\HHV H[FOXGLQJWKH $VVXPLQJ D VLPLODU DYHUDJH VKDUH RI %% UHYHQXH ƄQDQFLDOVHFWRU ZDVJHQHUDWHGIURPHFRPPHUFHLQ WKDWLV}SHUFHQW JOREDO%%VDOHVDPRXQWHGWR  ƄJXUH},, XSIURP}SHUFHQWLQ4%% }WULOOLRQLQt)XUWKHUDQDO\VLVVXJJHVWV DQG%*WRJHWKHUDFFRXQWHGIRUDERXW}SHUFHQW WKDWVRPH}SHUFHQWRIJOREDO%%HFRPPHUFHZDV RI WKH WRWDO YDOXH RI HFRPPHUFH DQG %& IRU WKH accounted for by the United States, followed by the UHPDLQLQJ}SHUFHQW5 8QLWHG .LQJGRP } SHU FHQW  -DSDQ } SHU FHQW  :KLOH%%UHSUHVHQWVWKHODUJHVWVKDUHRIHFRPPHUFH DQG&KLQD }SHUFHQW  %& DSSHDUV WR EH H[SDQGLQJ IDVWHU )RU H[DPSOH in the United States, its share of e-commerce rose (VWLPDWHVE\SULYDWHFRQVXOWDQFLHVYDU\FRQVLGHUDEO\ IURP}SHUFHQWWR}SHUFHQWEHWZHHQDQG depending on the methodology used for the data  VHHUHWDLOWUDGHFROXPQLQWDEOH},,  And in the FROOHFWLRQ )UDXPHQL $FFRUGLQJWRH0DUNHWHU 5XVVLDQ )HGHUDWLRQ %& JUHZ DOPRVW WKUHH WLPHV %&HFRPPHUFHLVIRUHFDVWWRGRXEOHIURP}WULOOLRQ IDVWHUWKDQ%%LQ LQWR}WULOOLRQLQ ƄJXUH},, 7KHIDVWHVW ,Q WKH FDVH RI %& RIƄFLDO VWDWLVWLFV DQG GDWD IURP JURZWK LV H[SHFWHG LQ WKH $VLD DQG 2FHDQLD UHJLRQ e-commerce associations are available for the top WKHPDUNHWVKDUHRIZKLFKLVVHWWRJURZIURPWR FRXQWULHVUDQNHGE\WKHQXPEHURIRQOLQHEX\HUV }SHUFHQW7KHRQO\RWKHUUHJLRQWKDWLVIRUHFDVWWR %DVHG RQ VXFK VWDWLVWLFV %& UHYHQXHV LQ WKHVH LQFUHDVHLWVVKDUHRIWKHJOREDOPDUNHWLVWKH0LGGOH FRXQWULHV DPRXQWHG WR MXVW RYHU } WULOOLRQ LQ  (DVWDQG$IULFDIURPWR}SHUFHQW&RQYHUVHO\ WDEOH} ,,  &KLQD KDG WKH ODUJHVW PDUNHW LQ WHUPV WKH FRPELQHG VKDUH RI :HVWHUQ (XURSH DQG 1RUWK of both the number of online buyers and revenue, $PHULFDLVH[SHFWHGWRIDOOIURPWR}SHUFHQW 14 INFORMATION ECONOMY REPORT 2015

7DEOH},, %&UHYHQXHVLQWKHWRSFRXQWULHVUDQNHGE\QXPEHURIRQOLQHEX\HUVt

B2C market Online buyers

As a share Number in Annual spend Country  Source*** }ELOOLRQ RI%%  millions** SHUEX\HU 

China 301 18.5 271 1 111 Ministry of Commerce

United States 263 4.7* 133 1 975 Bureau of Census

Japan 119* 5.3* 55 2 171 Ministry of Economy, Trade and Industry

Germany 52 4.5* 33 1 593 Federal Ministry for Economic Affairs and Industry

United Kingdom 144 5.2* 30 4 874 Interactive Media in Retail Group

Russian Federation 13 14 20 662 Ecommerce Europe

Republic of Korea 22 2.2 19 1 195 KORSTAT

Fédération du E-commerce et de la Vente à France 68 12 18 3 688 Distance (Fevad)

Brazil 14 ... 14 1 045 Associação Brasileira de Comércio Eletrônico

Canada 19* 11.9 13 1 446 Statistics Canada

Top ten total 1 016 8.1 605 1 679

Estimates of global B2C 1 233 N/A eMarketer sales in 2013

Source: UNCTAD, based on sources cited in the table. *  ** 'HULYHGIURP,QWHUQHWXVHUVXUYH\VFRPSLOHGE\JRYHUQPHQWDJHQFLHV H[FHSWIRUWKH8QLWHG6WDWHV 3HZ5HVHDUFK&HQWHU DQG IRUWKH5XVVLDQ)HGHUDWLRQ (FRPPHUFH(XURSH  *** 5HIHUVWRWKHVRXUFHRI%&HFRQRPLFYDOXH FRQYHUWHGWR8QLWHG6WDWHVGROODUVXVLQJWKHDQQXDODYHUDJHH[FKDQJHUDWH ,QGLD PLJKWTXDOLI\DPRQJWKHWRSEXWGRHVQRWUHSRUWRIƄFLDOVWDWLVWLFVRQWKHQXPEHURISHRSOHEX\LQJRQOLQH

)LJXUH},, %&HFRPPHUFHVDOHVZRUOGZLGHE\UHJLRQDQG }ELOOLRQV

2’500

2’000

Middle East and Africa 1’500 Central and Eastern Europe Latin America 1’000 Western Europe Asia-PaciƂF 500 North America

0 2013 2018

Source: H0DUNHWHUFRP-XO\ Note: (VWLPDWHVDUHEDVHGRQWKHDQDO\VLVRIGDWDIURPRWKHUUHVHDUFKƄUPVDQGJRYHUQPHQWDJHQFLHVKLVWRULFDOWUHQGVUHSRUWHG and estimated revenues from major online retailers, consumer online buying trends, and macro-level economic conditions. Data include products and services ordered and leisure and unmanaged business travel sales booked using the Internet via DQ\GHYLFHUHJDUGOHVVRIWKHPHWKRGRISD\PHQWRUIXOƄOPHQW CHAPTER II : GLOBAL AND REGIONAL TRENDS 15

2. Cross-border e-commerce In developed countries, the international dimension RI HFRPPHUFH LV VWLOO UHODWLYHO\ PRGHVW (XURSHDQ Although the Internet should reduce barriers to e-commerce sales are predominantly domestic in LQWHUQDWLRQDO WUDGH 7HU]L   YDULRXV IDFWRUV QDWXUH :KHUHDV } SHU FHQW RI HQWHUSULVHV LQ WKH FRQVWUDLQ FURVVERUGHU HFRPPHUFH ([DPSOHV (XURSHDQ 8QLRQ  LQ  VROG RQOLQH WR WKHLU RZQ include unreliable and lengthy transit times, complex GRPHVWLFPDUNHWVRQO\}SHUFHQWUHSRUWHGHVDOHVWR and ambiguous return processes, customs delays, RWKHU (XURSHDQ 8QLRQ FRXQWULHV In Denmark, which lack of transparency on delivery and pricing, and UDQNV ƄUVW DPRQJ (XURSHDQ 8QLRQ FRXQWULHV } SHU limited ability to alter delivery times and locations (see cent of enterprises made e-sales, but only one in ten also box II.1). UHSRUWHGVHOOLQJWRFXVWRPHUVLQDQRWKHU(XURSHDQ8QLRQ FRXQWU\,Q &DQDGD } SHU FHQW RI WKH YDOXH RI RQOLQH ,Q WHUPV RI FURVVERUGHU WUDGH LQ JRRGV 838 VDOHVZDVDWWULEXWDEOH}WRFXVWRPHUVLQ&DQDGD}SHU data on the volume of international postal cent to customers in the United States and the remaining traffic of small packets, parcels and packages }SHUFHQWWRRWKHUFRXQWULHV11,Q-DSDQFURVVERUGHU offer important insights into recent trends in WUDQVDFWLRQVDFFRXQWHGIRUDERXW}SHUFHQWRIDOO%& HFRPPHUFH %HWZHHQ  DQG  JOREDO HFRPPHUFHWUDQVDFWLRQV 3D\YLVLRQ  GHOLYHULHVRIVXFKLWHPVH[SDQGHGE\DERXW}SHU cent. The data indicate an increasingly important 7KHUHDUHIHZRIƄFLDOVWDWLVWLFVRQWKHH[WHQWWRZKLFK role for developing countries, especially in Asia developing countries are engaging in cross-border DQG 2FHDQLD WDEOH} ,,  7KDW UHJLRQpV VKDUH RI e-commerce, but there is some data from private UHODWHG H[SRUWV URVH IURP  WR } SHU FHQW VRXUFHV 3D\YLVLRQ &RPSDUHGZLWKWKHVLWXDWLRQ during the same period, while its share of imports LQ GHYHORSHG FRXQWULHV FURVVERUGHU %& RU && VXUJHGIURPWR}SHUFHQW7KHGDWDIXUWKHU transactions account for a larger share in a number show that developed countries and Asia and of developing countries. In Asia, more than half of 2FHDQLDUXQVLJQLILFDQWWUDGHVXUSOXVHVLQWKLVDUHD all such e-commerce transactions in both India and whereas Latin America and the Caribbean as well 6LQJDSRUHZHUHFURVVERUGHULQ7XUQLQJWR/DWLQ as transition economies import considerably more America, cross-border trade accounts for the bulk of than they export.9 $V IXUWKHU VKRZQ LQ WDEOH} ,, RQOLQH EX\LQJ E\ FRQVXPHUV LQ &RORPELD 3DUDJXD\ the average time needed to ship parcels is also the DQG WKH %ROLYDULDQ 5HSXEOLF RI 9HQH]XHOD SDUWO\ DV shortest in the cases of developed countries and a result of underdeveloped domestic e-commerce GHYHORSLQJFRXQWULHVLQ$VLDDQG2FHDQLD 3D\YLVLRQ 

%R[,, %DUULHUVWRLQWHUQDWLRQDOHFRPPHUFHtDVXUYH\

In a survey of Swedish enterprises engaged in cross-border e-commerce, several barriers to such transactions were LGHQWLƄHG6RPHRIWKHPKDYHWKHLURULJLQLQQDWLRQDOUHJXODWLRQVZKLOHRWKHUVDUHRIDWHFKQLFDORUORJLVWLFDOQDWXUH The most commonly cited barriers were lack of information on laws and regulations, differences in consumer laws, VSHFLƄFUHTXLUHPHQWVRQZHEVLWHFRQWHQWDQGFXVWRPVUHODWHGPDWWHUV%DUULHUVLGHQWLƄHGZHUHJURXSHGLQWRHLJKW FDWHJRULHV

• /DFNRILQIRUPDWLRQDERXWUHOHYDQWODZVUHJXODWLRQVDQGPHWKRGV

• %XUGHQVRPHFXVWRPVSURFHGXUHVKLJKFXVWRPVGXWLHVRQUHWXUQVDQGFRUUXSWLRQDWWKHERUGHU

• 'LIIHUHQFHVLQQDWLRQDOFRQVXPHUDQGVDOHVODZV

• 5HTXLUHPHQWVIRUVSHFLƄFSD\PHQWVVROXWLRQVDQGGLIIHUHQFHVLQWD[UHJXODWLRQV

• :HDNSURWHFWLRQRILQWHOOHFWXDOSURSHUW\ULJKWV

• /LPLWDWLRQVLQWKHULJKWWRVWRUHDQGWUDQVIHULQIRUPDWLRQDQGGDWD

• 5HTXLUHPHQWVWRKDYHDORFDOSUHVHQFHLQRUGHUWRUHJLVWHUWRSOHYHOGRPDLQV,QWHUQHWFHQVRUVKLSDQGWKHQHHGWRXVH VSHFLƄFHQFU\SWLRQWHFKQRORJLHV

• 2WKHUEDUULHUVLQFOXGLQJKLJKURDPLQJFKDUJHVSUREOHPVLQREWDLQLQJLQVXUDQFHDQGVWDWHVXEVLGLHV

Source: 6ZHGHQ1DWLRQDO%RDUGRI7UDGH   16 INFORMATION ECONOMY REPORT 2015

7DEOH},, ,QWHUQDWLRQDOGHOLYHULHV WRQQDJH RIVPDOOSDFNHWVSDUFHOVDQGSDFNDJHVDQGGLVWULEXWLRQ  RIUHJLRQDOƃRZVDVDVKDUHRIJOREDOƃRZV SHUFHQW

Latin America Developed Asia and Transition Africa and the World  countries Oceania economies Caribbean

Developed countries 46.3 2.4 12.1 7 2.8 70.6

Africa 0.7 0.2 0.1 0 0 1

Asia and Oceania 21.6 0.3 2.7 0.5 0.4 25.5 Latin America and the 1.7 0 0.1 0.3 0 2.1 Caribbean Transition economies 0.5 0 0 0 0.3 0.8

World 70.8 2.9 15 7.8 3.5 100

Latin America Developed Asia and Transition Africa and the World  countries Oceania economies Caribbean

Developed countries 33.3 1.7 20.4 4.6 3 63

Africa 0.7 0.3 0.1 0 0 1.1

Asia and Oceania 23.6 0.4 3.1 2 3.8 32.9 Latin America and the 1.2 0 0.2 0.3 0 1.7 Caribbean Transition economies 0.6 0 0.1 0 0.6 1.3

World 59.4 2.4 23.9 6.9 7.4 100

Source: 838

7DEOH},, $YHUDJHVKLSSLQJWLPHIRUSDUFHOV QRUPDOVHUYLFH 4WR4  1XPEHURIGD\VIURPRULJLQWRGHVWLQDWLRQ

Latin America Developed Asia and Transition Africa and the World countries Oceania economies Caribbean Developed countries 9.7 23.2 20.1 27.2 16.8 19.4 Africa 14.7 20.2 18.1 36.0 27.7 23.3 Asia and Oceania 17.9 23.9 17.8 28.3 23.5 22.3 Latin America and the Caribbean 16.5 25.9 21.9 23.3 25.5 22.6 Transition economies 12.1 19.1 17.5 26.6 12.6 17.6 World 14.2 22.5 19.1 28.3 21.2 21.0

Source: 838 CHAPTER II : GLOBAL AND REGIONAL TRENDS 17

3. E-commerce use by households and 7KH 3DUWQHUVKLS RQ 0HDVXULQJ ,&7 IRU 'HYHORSPHQW enterprises proposes an indicator to be collected through household surveys on the proportion of individuals  2IƄFLDOVWDWLVWLFVRQRQOLQHSXUFKDVHVDQGVDOHVUHƅHFW using the Internet by type of activity, which includes the actual state of the market and are important making online payments and purchasing from indicators of e-commerce performance. Though a JRYHUQPHQW RUJDQL]DWLRQV SXUFKDVLQJ RU RUGHULQJ  FRPSUHKHQVLYHRIƄFLDOLQWHUQDWLRQDOGDWDVHWLVODFNLQJ JRRGV RU VHUYLFHV DQG VHOOLQJ JRRGV RU VHUYLFHV available statistics from household and business ICT 7KHPDLQLQWHUHVWKHUHLVWRREWDLQLQIRUPDWLRQRQ%& surveys cover most markets where e-commerce is HFRPPHUFH IURP WKH SXUFKDVLQJ VLGH ,78 E  VLJQLƄFDQW The percentage of individuals who have made an online SXUFKDVHUDQJHVIURPOHVVWKDQ}SHUFHQWIRUH[DPSOH (a) Household survey data and online LQ0H[LFRDQG7KDLODQGWRPRUHWKDQ}SHUFHQWLQWKH shoppers 8QLWHG.LQJGRP'HQPDUNDQG$XVWUDOLD ƄJXUH},,  In most developing and transition economies, people 0RVWFRXQWULHVWKDWFRQGXFWKRXVHKROG,&7VXUYH\V buying online form a small proportion of all Internet inquire about the activities carried out over the users. Unlike social networking, where activity rates are Internet, such as making online purchases. Some relatively high among developing countries, the share go further into consumer e-commerce behaviour, of Internet users who use online shopping is generally capturing data about the types of products lower in these countries than in developed countries purchased, the amounts spent, whether purchases ƄJXUH},, 7KLVPD\UHƅHFWOLPLWHGSXUFKDVLQJSRZHU were domestic or international, payment and but also other mitigating factors, such as a lack of delivery methods and reasons for not making online trust, limited shopping options (including content in purchases. local languages) and poor delivery services.

)LJXUH},, 6KDUHRILQGLYLGXDOVSXUFKDVLQJSURGXFWVRQOLQHVHOHFWHGHFRQRPLHV SHUFHQW

80

70

60

50

40

30

20

10

0 Italy Qatar Malta Brazil Spain China Oman Latvia Japan Turkey Poland France Ireland Cyprus Austria Greece Croatia Mexico Iceland Finland Estonia Canada Norway Sweden Belgium Portugal Bulgaria Hungary Slovakia Slovenia Thailand Australia Romania Germany Denmark Lithuania Mauritius Singapore Switzerland Netherlands South Africa Luxembourg New Zealand United States Czech Repuplic United Kingdom Republic of Korea Hong Kong (China) Hong Kong United Arab Emirates

Source: (XURVWDW,78DQGQDWLRQDOGDWD LQUHG  Note: As age ranges and period in which a purchase is made varies across surveys, data are not strictly comparable. 18 INFORMATION ECONOMY REPORT 2015

)LJXUH},, 6KDUHRI,QWHUQHWXVHUVLQYROYHGLQRQOLQHSXUFKDVHDQGVRFLDOQHWZRUNLQJVHOHFWHGFRXQWULHVt  SHUFHQW 

Online purchase Social networking 100

80

60

40

20

0 Italy India Brazil Egypt Spain China Japan Turkey Poland France Tunisia Greece Mexico Lebanon Germany United States Czech Republic United Kingdom Russian Federation

Source: 81&7$'DGDSWHGIURPQDWLRQDOVXUYH\V(XURVWDWDQG3HZ

$QHVWLPDWHG}ELOOLRQSHRSOHDURXQGWKHZRUOGPDGH 7KH KLJKHVW JURZWK EHWZHHQ  DQG  LV DW OHDVW RQH RQOLQH SXUFKDVH LQ  DFFRXQWLQJ DQWLFLSDWHGIRUWKH0LGGOH(DVWDQG$IULFD IRU } SHUFHQW RIDOO,QWHUQHWXVHUV WDEOH} ,, :LWK VRPH}PLOOLRQRQOLQHVKRSSHUV$VLDDQG2FHDQLD (b) Enterprise survey data DFFRXQWHGIRUWKHODUJHVWVKDUH }SHUFHQW ZKLFKLV H[SHFWHGWRJURZIXUWKHUXQWLO:HVWHUQ(XURSH The proportion of businesses engaging in e-commerce is DQG1RUWK$PHULFDIROORZDFFRXQWLQJIRU}SHUFHQW LQGLFDWLYHRIWKHLQFRXQWU\FDSDELOLW\RIƄUPVLQWKLVDUHD DQG}SHUFHQWUHVSHFWLYHO\RIJOREDOGLJLWDOEX\HUV &RUHLQGLFDWRUVRIWKH3DUWQHUVKLSRQ0HDVXULQJ,&7IRU

7DEOH},, (VWLPDWHGQXPEHURIRQOLQHEX\HUVZRUOGZLGHE\UHJLRQDQG

Online buyers as a share of

Total *URZWK   World total of 3RSXODWLRQ Internet users PLOOLRQV t online buyers         Asia and Oceania 460.3 782.4 70 42.6 14.9 42.1 Western Europe 182.3 210.2 15 16.9 49 64 North America 172.3 203.8 18 16 59.7 72 Middle East and Africa 93.6 170.6 82 8.7 7.1 31.3 Latin America 84.7 139.3 64 7.8 18.6 28.2 Central and Eastern Europe 86.4 117.4 36 8 24.1 41.6 World      

Source: H0DUNHWHU-XO\ Note: $JHV,QWHUQHWXVHUVZKRKDYHPDGHDWOHDVWRQHSXUFKDVHYLDDQ\GLJLWDOFKDQQHOGXULQJWKHFDOHQGDU\HDULQFOXGLQJ RQOLQHPRELOHDQGWDEOHWSXUFKDVHVQXPEHUVPD\QRWDGGXSWRWRWDOGXHWRURXQGLQJ CHAPTER II : GLOBAL AND REGIONAL TRENDS 19

Development are limited to the number of enterprises do not measure the value of e-commerce, distinguish placing orders (buying) and receiving orders (selling) EHWZHHQ %% %& RU %* WUDQVDFWLRQV RU LQGLFDWH online. Data for these indicators are collected through whether they are domestic or cross border. However, enterprise surveys by most developed countries and by in most countries with data, it is more common for selected developing and transition economies. However, enterprises to purchase inputs online than to sell online. related statistics remain scarce for developing countries (QWHUSULVHVL]HLVJHQHUDOO\DVWURQJGHWHUPLQDQWRI DQG DUH YLUWXDOO\ QRQH[LVWHQW IRU /'&V 0RUHRYHU e-commerce, regardless of the level of development DYDLODEOH RIƄFLDO GDWD IRU GHYHORSLQJ FRXQWULHV PRVWO\ ƄJXUH},, ,Q2PDQIRUH[DPSOH}SHUFHQWRIVPDOO

)LJXUH},, 6KDUHRIHQWHUSULVHVUHFHLYLQJRUGHUVRYHUWKH,QWHUQHWE\HQWHUSULVHVL]HVHOHFWHGHFRQRPLHV  ODWHVWDYDLODEOH\HDU SHUFHQW 

0 20406080100120

European Union 28 (2013 Small enterprises (10-49 employees Azerbaijan (2012 Medium enterprises (50-249 employees Belarus (2012 Large enterprises (+250 employees Brazil (2013

Cameroon (2009

Egypt (2012

Iceland (2012

Japan (2012

Kazakhstan (2012

Lebanon (2011

Mauritius (2012

Norway (2013

Oman (2011

Republic of Korea (2011

Switzerland (2011 The former Yugoslav Republic of Macedonia (2013 Thailand (2011

Tunisia (2009

Turkey (2010

Uruguay (2010

State of Palestine (2011

Hong Kong, China (2009

Macao, China (2010

Source: UNCTAD. Note: -DSDQGRHVQRWUHSRUWGDWDRQHQWHUSULVHVEHORZHPSOR\HHV 20 INFORMATION ECONOMY REPORT 2015

enterprises had received orders over the Internet in In terms of enterprises receiving orders online, hotels FRPSDUHGWR}SHUFHQWRIODUJHHQWHUSULVHV and restaurants generally have the highest incidence. ,Q$]HUEDLMDQRQO\}SHUFHQWRIVPDOOHQWHUSULVHV (FRPPHUFHLVLQFUHDVLQJO\LPSRUWDQWLQWKLVVHFWRU UHFHLYHGRUGHUVRYHUWKH,QWHUQHWLQFRPSDUHG not least due to the availability of online platforms ZLWK } SHU FHQW RI ODUJH HQWHUSULVHV (YHQ LQ WKH where customers can search and book hospitality (XURSHDQ 8QLRQ D VLPLODU SDWWHUQ SUHYDLOV ,Q services, as well as read reviews from other  } SHU FHQW RI ODUJH HQWHUSULVHV } SHU FXVWRPHUV%XWWKHVKDUHRIKRWHOVDQGUHVWDXUDQWV FHQW RI PHGLXPVL]HG HQWHUSULVHV DQG } SHU receiving bookings online still varies widely, from cent of small enterprises had sold online.14 Where }SHUFHQWLQ(J\SWWR}SHUFHQWLQ1RUZD\7KH data for microenterprises are available, the gap in developing country with the highest such share is e-commerce adoption is even wider. 0DXULWLXV }SHUFHQW ,QRWKHUDUHDVWKHVHFWRUDO pattern is again less clear. While some industries are more likely to place orders online, patterns vary across countries. In most cases, the placing of orders online is most 4. What do consumers buy online? common among enterprises in computer and UHODWHG DFWLYLWLHV %XW EH\RQG WKDW WKH WUHQG LV :LWKLQ%&HFRPPHUFHDGLVWLQFWLRQLVVRPHWLPHV less clear. In a handful of developing and transition PDGHEHWZHHQqGLJLWDOWUDYHOr OHLVXUHDQGXQPDQDJHG HFRQRPLHV WKH PDQXIDFWXULQJ VHFWRU OHDGV )RU business travel sales booked using the Internet via example, more than half of all manufacturing any device) and online retail activities. The split varies HQWHUSULVHVLQ%HODUXV%UD]LODQG&RORPELDSODFH EHWZHHQ FRXQWULHV ƄJXUH} ,,  ,Q PRVW GHYHORSHG orders online. Among the developed countries, only countries for which data are available, the retail $XVWUDOLD ,UHODQG DQG 1HZ =HDODQG UHSRUW KLJKHU segment is considerably larger. The same applies SHUFHQWDJHVLQWKLVUHJDUG0HDQZKLOHZKROHVDOH WR %UD]LO DQG WKH 5XVVLDQ )HGHUDWLRQ %\ FRQWUDVW and retail trade has the highest percentage in LQ ,QGLD %& HFRPPHUFH VDOHV DUH SUHGRPLQDQWO\ 7XUNH\DQGKRWHOVDQGUHVWDXUDQWVOHDGLQ0DXULWLXV accounted for by digital travel expenditures. Usage patterns may reflect more the particular economic characteristics of countries rather than $PRQJWKHVHOHFWHGFRXQWULHVLQFOXGHGLQƄJXUH},, the nature of the industry. online retail sales as a share of store-based retail sales

)LJXUH},, %&HFRPPHUFHVDOHVE\VHJPHQWVHOHFWHGFRXQWULHVRUODWHVW\HDU

100%

75%

50%

25%

0% GermanyRussian United Brazil CanadaUnited India Federation Kingdom (2012 States (2011 Online retail Digital travel

Source: 81&7$'EDVHGRQGDWDIURPH0DUNHWHU3D\YLVLRQDQGRWKHUVRXUFHV CHAPTER II : GLOBAL AND REGIONAL TRENDS 21

)LJXUH},, ,QWHUQHWUHWDLOVDOHVDVDVKDUHRIVWRUHEDVHGUHWDLOVDOHVLQVHOHFWHGFRXQWULHV SHUFHQW

18

16

14

12

10

8

6

4

2

0 Peru India Chile Brazil Egypt China Kenya Serbia Algeria Nigeria Croatia Mexico Tunisia Finland Belarus Ukraine Ecuador Uruguay Thailand Pakistan Morocco Malaysia Viet Nam Denmark Colombia Argentina Indonesia Singapore Costa Rica Guatemala Philippines Uzbekistan Kazakhstan South Africa Saudi Arabia United Kingdom Republic of Korea Russian Federation Dominican Republic United Arab Emirates Plurinational State of Bolivia Bolivarian Republic of Venezuela

Source: (XURPRQLWRU

ZHUH WKH KLJKHVW LQ WKH 5HSXEOLF RI .RUHD ZKHUH LW 5. Largest B2C e-commerce VWRRGDWDERXW}SHUFHQWLQIROORZHGE\WKH companies 8QLWHG .LQJGRP DQG 'HQPDUN 7KH KLJKHVW VKDUH LQ /DWLQ $PHULFD ZDV LQ %UD]LO } SHU FHQW  DQG LQ 0RUH DQG PRUH HQWHUSULVHV DUH H[SORLWLQJ WKH $IULFDLWZDVKLJKHVWLQ0RURFFR }SHUFHQW ZKLOH opportunities created by improved connectivity and the highest share among transition economies was in greater willingness among consumers to shop online. 8NUDLQH }SHUFHQW  $FFRUGLQJ WR VRPH HVWLPDWHV PRUH WKDQ } PLOOLRQ companies are already engaging in e-commerce 2QOLQHFRQVXPSWLRQSDWWHUQVGLIIHUDFURVVUHJLRQV around the world.15 7KLV LQFOXGHV ERWK VSHFLDOL]HG but the top categories are fairly consistent. In e-commerce enterprises, for which the business WDEOH} ,, WKH WRS ƄYH LWHPV WKDW FRQVXPHUV relies entirely on the Internet, and enterprises that LQWHQGHG WR SXUFKDVH RQOLQH LQ  KDYH EHHQ have adopted e-commerce strategies to complement shaded. Travel-related items (such as tours, hotel H[LVWLQJDFWLYLWLHV0DQ\WUDGLWLRQDOODUJHUHWDLOEULFNV reservations and airline tickets) and event tickets and-mortar companies are adopting e-commerce to IHDWXUH DPRQJ WKH WRS ƄYH LQ DOO UHJLRQV &ORWKLQJ defend their shares of the market. Among the major and shoes are included for four regions, hard- retailers that have embraced the online sales channel copy books and e-books for two, and electronic as a complement to their other activities are Apple, equipment for one region. In the survey, almost half 'HOODQG:DO0DUW DOO8QLWHG6WDWHV 2WWR *HUPDQ\  of the respondents intended to purchase clothing 7HVFR 8QLWHG .LQJGRP  DQG &DVLQR *XLFKDUG or make airline or hotel reservations using an online 3HUUDFKRQ )UDQFH  'HORLWWH  device in the next six months. Whereas computers are the preferred device for making online purchases A relatively small number of companies control a in all regions, recent data suggest that mobile substantial share of the e-commerce market, with the GHYLFHVDUHDYHU\FORVHVHFRQGLQWKH0LGGOH(DVW level of concentration varying by region and depending DQG$IULFD ƄJXUH},,  RQKRZWKHPDUNHWLVGHƄQHG WDEOH},, ,QWKH8QLWHG 22 INFORMATION ECONOMY REPORT 2015

7DEOH},, 2QOLQHEX\LQJLQWHQWLRQVLQWKHQH[WVL[PRQWKVE\UHJLRQ 3HUFHQWRIUHVSRQGHQWV 

Asia and Middle-East and Item Europe Latin America North America Oceania Africa Clothing, accessories and shoes 57 34 26 28 42 Electronic equipment 41 25 26 29 30 Tours and hotel reservations 53 33 35 32 43 Airline tickets and reservations 59 34 39 36 43 Mobile phone 44 22 28 27 22 Event tickets 50 33 28 31 35 Computer hardware 36 23 25 20 29 Hardcopy books 50 30 22 24 31 Computer software 33 19 27 18 27 E-books 43 22 29 23 35 Sporting goods 42 19 20 19 21 Music (not downloaded) 33 19 21 19 30 Videos, DVDs and games 32 21 23 21 33 Cosmetics 43 21 19 20 21 Personal care 43 17 18 14 16 Groceries 41 14 15 11 14 Toys and dolls 40 16 18 17 24 Car, motorcycle and accessories 20 13 16 11 15 Pet-related products 26 15 14 11 19 Baby supplies 29 12 16 11 12 Flowers 21 11 16 10 21 Alcoholic drinks 25 9 11 8 10 Source: 1LHOVHQ   Note: 7KHVXUYH\ZDVFRQGXFWHGEHWZHHQ)HEUXDU\DQG0DUFKDQGSROOHGPRUHWKDQFRQVXPHUVZLWKRQOLQH DFFHVVLQFRXQWULHV$VLDDQG2FHDQLDFRYHUVHFRQRPLHV(XURSHHFRQRPLHV/DWLQ$PHULFDHFRQRPLHVWKH 0LGGOH(DVWDQG$IULFDHFRQRPLHVDQG1RUWK$PHULFDHFRQRPLHV

)LJXUH},, 'HYLFHVXVHGIRURQOLQHVKRSSLQJE\UHJLRQ 3HUFHQWRIUHVSRQGHQWVLQGLFDWLQJWKDWWKH\ZLOOVKRS  RUPDNHDSXUFKDVHRQOLQHLQWKHQH[WPRQWKV

Global average

North America

Latin America

$VLDt3DFLƂF

Europe

Middle East and Africa 0 20 40 60 80 100 Tablet Mobile device Computer

Source: 1LHOVHQ Note: 6HHQRWHWRWDEOH},, CHAPTER II : GLOBAL AND REGIONAL TRENDS 23

6WDWHVWKHWRSOHDGLQJZHEUHWDLOHUVDFFRXQWHGIRU In terms of gross merchandise value, the top e-commerce DERXWKDOI }SHUFHQW RIWKHWRWDOVDOHVE\WKHWRS VLWHVLQWKHZRUOGLQZHUH$OLEDED$PD]RQDQGH%D\ web merchants. In the more diverse and fragmented WDEOH},, +RZHYHULQWHUPVRIRQOLQHUHYHQXH$PD]RQ (XURSHDQPDUNHWWKHWRSDFFRXQWHGIRU}SHUFHQW DQGH%D\ZHUHFRQVLGHUDEO\ODUJHUWKDQ$OLEDEDUHƅHFWLQJ RIWKHVDOHVE\WKHWRSZHEUHWDLOHUVLQDQG the fact that a large share of Alibaba’s transactions are WKHWRSIRU}SHUFHQW7KHOHYHORIFRQFHQWUDWLRQLV &&ZLWKRQO\DIUDFWLRQRIWKHJURVVYDOXHRIWKHVDOHV KLJKHULQ$VLDZKHUHWKHFRPELQHGVDOHVRIWKHWRS generating revenue for the market platform. With the DFFRXQWHGIRUDVPXFKDV}SHUFHQWRIWKHZHEVDOHV H[FHSWLRQV RI $OLEDED DQG 5DNXWHQ DOO WKH RWKHU WRS RIWKHUHJLRQpVWRSZHEUHWDLOHUV%\FRPSDULVRQ e-commerce sites originate in the United States. WKHVKDUHZDVDERXW}SHUFHQWLQ/DWLQ$PHULFD $ QXPEHU RI VSHFLDOL]HG SXUHSOD\ HFRPPHUFH B. REGIONAL TRENDS companies, with web sales only, play a prominent role in the market. In the United States, such companies LQDFFRXQWHGIRUDERXW}SHUFHQWRIWKH%& 1. Africa: Dynamic growth from a low e-commerce market. The largest e-commerce company level E\ RQOLQH UHYHQXH LV $PD]RQFRP ZKLFK DSSHDUV DPRQJ WKH WRS  ZHE PHUFKDQWV LQ DOO WKH UHJLRQV Africa remains the region with the lowest penetration of LQFOXGHGLQWDEOH},,&KLQDKDVVHHQWKHHPHUJHQFHRI HFRPPHUFH $V QRWHG DERYH $IULFD DQG WKH 0LGGOH several major players, such as the Alibaba Group (box (DVWLQDFFRXQWHGIRUDERXW}SHUFHQWRIJOREDO ,,  DQG -'FRP IRUPHUO\ %X\FRP  DSSHDULQJ %&HFRPPHUFH7KHUHDUHIHZGDWDDWWKHFRXQWU\ among the world’s top e-commerce companies. As of level, but estimates for the six countries included in 6HSWHPEHU$OLEDEDDQG$PD]RQUDQNHGWKLUG WDEOH} ,, VKRZ SRVLWLYH JURZWK EHWZHHQ  DQG DQGIRXUWKUHVSHFWLYHO\LQPDUNHWFDSLWDOL]DWLRQDPRQJ 7KHWDEOH}DOVRLQGLFDWHVWKDW(J\SWKDGE\IDUWKH the world’s largest Internet companies.19 largest e-commerce sales among the six.

7DEOH},, /DUJHVW,QWHUQHWUHWDLOHUFRPSDQLHVLQWKH8QLWHG6WDWHV(XURSH$VLDDQG/DWLQ$PHULFDt

United States Europe Asia Latin America

  

1 Amazon.com (United States) Amazon.com (United States) Alibaba Group (China) B2W Digital (Brazil)

2 Apple (United States) Otto (Germany) Rakuten (Japan) Nova Pontocom (Brazil)

3 Staples (United States) Staples (United States) 360Buy.com (China) SACI Falabella (Chile)

Home Retail Group Wal-Mart Latin America 4 Wal-Mart (United States) Amazon.com (United States) (United Kingdom) (United States) Sears Holdings (United 5 Tesco (United Kingdom) Suning Commerce (China) Netshoes (Brazil) States) Liberty Interactive (United 6 Apple (United States) Jia.com (China) Máquina de Vendas (Brazil) States)

7 1HWƃL[ 8QLWHG6WDWHV CDiscount.com (France) eBay (United States) Dell (United States)

8 Macy's (United States) Tengelmann (Germany) 51Buy.com (China) Amazon.com (United States)

Shop Direct Group 9 HappiGo (China) Magazine Luiza (Brazil) 2IƂFH'HSRW 8QLWHG6WDWHV (United Kingdom)

10 Dell (United States) Sainsburys (United Kingdom) Vamcl (China) Saraiva e Siciliano (Brazil)

Share (%) of 52% 37% 86% 51% top 500 sales

Source: UNCTAD analysis of data from internetretailer.com. 24 INFORMATION ECONOMY REPORT 2015

Box II.2. The Alibaba Group

:KHQWKH$OLEDED*URXSZDVOLVWHGRQWKH1HZ

Since the Alibaba Group was founded in 1999, it has quickly grown to become the largest online and mobile FRPPHUFH FRPSDQ\ LQ WKH ZRUOG LQ WHUPV RI JURVV PHUFKDQGLVH YROXPH ,WV %% WUDGLQJ SODWIRUP IRU VPDOO EXVLQHVVHVKDVKHOSHGWRFRQQHFWEX\HUVLQ1RUWK$PHULFDDQG(XURSHZLWKVXSSOLHUVDQGPDQXIDFWXUHUVLQ&KLQD 7KHFRPSDQ\KDVODXQFKHGDQXPEHURIRWKHUUHODWHGEXVLQHVVHVVXFKDV%%RQOLQHZHESRUWDOVRQOLQHUHWDLODQG payment services, a shopping search engine and data-centric cloud computing services – which collectively are UHSRUWHGWRSRZHU}SHUFHQWRIDOORQOLQHFRPPHUFHLQ&KLQD

7KH$OLEDED*URXSLQFOXGHVFRPSDQLHVWKDWSURYLGHDGLYHUVHUDQJHRIHFRPPHUFHVROXWLRQV

• 7DREDR0DUNHWSODFH ZZZWDREDRFRP &KLQDpVODUJHVW&&RQOLQHPDUNHWSODFH

• 7PDOOFRP ZZZWPDOOFRP $%&RQOLQHPDUNHWSODFHZLWKDIRFXVRQLPSRUWV,WLVWKHODUJHVWUHWDLOSODWIRUPLQ &KLQDLQWHUPVRIJURVVPHUFKDQGLVHYDOXH 3D\YLVLRQ 

• -XKXDVXDQ ZZZMXKXDVXDQFRP $QRQOLQHJURXSEX\LQJPDUNHWSODFH

• $OL([SUHVV ZZZDOLH[SUHVVFRP $JOREDORQOLQH%&PDUNHWSODFHIRUFRQVXPHUVWREX\GLUHFWO\IURP&KLQD

• $OLEDEDFRP ZZZDOLEDEDFRP $%%RQOLQHPDUNHWSODFHWKDWIDFLOLWDWHVJOREDOVRXUFLQJ

• FRP ZZZFRP $&KLQDRQO\%%RQOLQHZKROHVDOHPDUNHWSODFH

• $OLEDED &ORXG &RPSXWLQJ ZZZDOL\XQFRP  $ SURYLGHU RI FORXG FRPSXWLQJ VHUYLFHV WR EXVLQHVVHV DQG HQWUHSUHQHXUV

• $OL&ORXG3URYLGHVHUHWDLOHUVZLWKDQDO\WLFDOGDWDDERXWZHEVLWHDFWLYLWLHVDQGSUHGLFWLRQVIRULQGLFDWRUVVXFKDV IXWXUHVDOHVDQGSURGXFWVWKDWDUHOLNHO\WREHLQKLJKGHPDQG

• $OLSD\FRP$QRQOLQHSD\PHQWVROXWLRQSURYLGHUWKDWKDVEHFRPHWKHZRUOGOHDGHUZLWKDWUDQVDFWLRQYROXPHRI }ELOOLRQLQ6RPH}SHUFHQWRI&KLQHVHRQOLQHFXVWRPHUVSUHIHUWRSD\ZLWK$OLSD\ 3D\YLVLRQ 

• &KLQD 6PDUW /RJLVWLFV 2SHUDWHV D FHQWUDO ORJLVWLFV LQIRUPDWLRQ V\VWHP WKDW FRQQHFWV D QHWZRUN RI H[SUHVV GHOLYHU\FRPSDQLHVLQ&KLQD

• PDLQFRP$8QLWHG6WDWHVEDVHGRQOLQHPDUNHWSODFHIRUVSHFLDOW\LWHPV

7KH$OLEDED*URXSKDVUHFHQWO\HQJDJHGLQYDULRXVLQWHUQDWLRQDOLQYHVWPHQWV)RUH[DPSOHLQ0D\LWDQQRXQFHG DQDJUHHPHQWXQGHUZKLFK$OLEDED,QYHVWPHQW/WGZLOOWDNHD}SHUFHQWVWDNHLQ6LQJ3RVWXSRQFRPSOHWLRQc $OLEDEDKDVIXUWKHUPRUHHQWHUHGDQDJUHHPHQWZLWK$XVWUDOLD3RVWWRKHOSPRUH$XVWUDOLDQPHUFKDQWVVHOOWR&KLQHVH FRQVXPHUVWKURXJK7PDOO$GHDOZDVDOVRDQQRXQFHGZLWKRQOLQHVKRSSLQJPDOO/RWWHFRPDQGWKH-DSDQHVH HFRPPHUFHFRPSDQ\5DNXWHQRSHQLQJWKHFRPSDQ\WRUHWDLOHUVLQWKH5HSXEOLFRI.RUHDDQG-DSDQUHVSHFWLYHO\d

Source: UNCTAD, based on various sources.

a 6HHq$OLEDEDGHEXWPDNHVDVSODVKrThe Wall Street JournaO}6HSWHPEHU

b 6HHq$OLEDEDE\WKHQXPEHUVrThe New York Times}0D\

c 6HHSUHVVUHOHDVHq6LQJ3RVWDQG$OLEDED*URXSWRIRUPVWUDWHJLFFROODERUDWLRQWRJURZLQWHUQDWLRQDOHFRPPHUFH ORJLVWLFV EXVLQHVV  0D\  DYDLODEOH DW KWWSZZZVLQJSRVWFRPGRZQORDG$ERXW6LQJ3RVW0HGLD 1HZV5HOHDVHVSUSGI DFFHVVHG}-DQXDU\ 

d 6HHq$OLEDEDpVUHFHQWGHDOVDUHSDYLQJWKHZD\IRULWV&KLQHVHPDUNHWSODFHWRJRJOREDOrthenextweb.com}-XQH  CHAPTER II : GLOBAL AND REGIONAL TRENDS 25

7DEOH},, 7RSRQOLQHVLWHVE\JURVVPHUFKDQGLVH %DQJODGHVKSLRQHHUHGWKHFUHDWLRQRIDPDUNHWSODFH  YDOXH }ELOOLRQV accessible to feature phone users. It enabled users LQ%DQJODGHVKWREX\DQGVHOOYLDDVLPSOHXQVWUXF- Gross tured supplementary service data menu, accessible Country of Online Company merchandise origin revenues to virtually all feature phones. Today, it is relatively value common in sub-Saharan Africa to see such services. Alibaba Group China 170 4.1 (VRNRFRP ZKLFK VWDUWHG DV D SLORW ZLWK )RRG1HW Amazon United States 87.8 61 LQ8JDQGDLQKDVOHYHUDJHGWKLVDSSURDFKWR eBay United States 67.8 14 enable rural farmers to access marketplace informa- Staples United States 11 11 WLRQYLDVLPSOHVKRUWPHVVDJHVHUYLFH 606  Rakuten Japan 15.8 4.7 6HUYLFHVVXFKDV%LQX2SHUD0LQL6QDSWX ZKLFK Wal-Mart United States 10 10 ZDV DFTXLUHG E\ )DFHERRN LQ   DQG 7XYLWX KDYH further improved the browsing experience of a feature 1HWƃL[ United States 3.6 3.6 phone, making them somewhat mimic the experience BestBuy United States 1.7 1.7 of a smartphone. These applications make it easier Kohl's United States 1.4 1.4 IRU ƄUVWWLPH ,QWHUQHW XVHUV WR JHW RQOLQH ,QWHUQHWRUJ Target United States 1.4 1.4 D FRQVRUWLXP RI FRPSDQLHV WKDW LQFOXGH )DFHERRN Source: 6HHKWWSZZZEUDLQVLQVFRPHQEORJVWDWHHFRP- (ULFVVRQDQG6DPVXQJLVDOVROHYHUDJLQJWKLVWHFKQRORJ\ PHUFHQHZHFRPPHUFPRGHOV DFFHVVHG for people that are currently not connected to the Internet. }-DQXDU\  ,Q-XO\LWODXQFKHGDQDSSLQ=DPELDPDNLQJD The scope for e-commerce is rapidly improving, suite of basic websites available at no cost.0HDQZKLOH DOWKRXJKVLJQLƄFDQWEDUULHUVUHPDLQLQDUHDVVXFKDV VPDUWSKRQH DGRSWLRQ LV DOVR JURZLQJ ,Q .HQ\D IRU transport and logistics, inadequate legal frameworks example, the mobile network operator Safaricom now  DQG OLPLWHG SXUFKDVLQJ SRZHU 8QGHUVHD ƄEUHRSWLF sells more smartphones than feature phones. %R[},, cables have encircled Africa’s coastlines and begun illustrates the diversity of the evolving e-commerce the long journey inland. Telecommunications providers ecosystem in sub-Saharan Africa. DUH LQYHVWLQJ LQ * DQG VXEVLGL]LQJ VPDUWSKRQH The future of e-commerce in sub-Saharan Africa is ownership. Innovative solutions are emerging that promising. Large e-commerce companies such as allow for the delivery of small pieces of the Internet WKRVHPHQWLRQHGLQER[,,DUHEXLOGLQJLQIUDVWUXFWXUH even to basic handsets. At the same time, digital and customer awareness that can be leveraged by payment services are becoming more important and smaller, more nimble startups. As the e-commerce various online marketplaces are spreading. ecosystem continues to mature, the barriers to entry for Internet use in Africa is primarily conducted on mobile QHZFRPSDQLHVZLOOFRPHGRZQIXUWKHU7KHƄUVWZDYH GHYLFHVLQƅXHQFLQJWKHVFRSHIRUDQGWKHQDWXUHRI RIqIDVWIROORZHUVrWRWDNHDGYDQWDJHRIWKLVWUHQGLVOLNHO\ e-commerce. Service providers in sub-Saharan Africa to come from African technology hubs like Accra, Cairo, need to adapt their solutions to make them acces- &DSH 7RZQ +DUDUH .DPSDOD /DJRV DQG 1DLUREL VLEOHRQDVPDOOVFUHHQ&HOO%D]DDU QRZ(NKDQHL RI 3OD\HUV WKDW DUH LQYHVWLQJ WRGD\ KDYH WKH SRWHQWLDO WR build positions in their respective markets. New entrants 7DEOH},, %&HFRPPHUFHVDOHVLQVL[FRXQWULHVLQ will continue to launch competing services, leading to  $IULFDt }ELOOLRQV better quality, further reach and lower cost. At the same time, as the market matures, major international players Country     are likely to increase their regional presence. Egypt 2.10 2.50 3.20 3.90 Ethiopia 0.02 0.03 0.04 0.06 2. Asia and Oceania: Major market Ghana 0.03 0.04 0.07 0.09 with great diversity

Kenya 0.03 0.04 0.06 0.08 This diverse region already boasts the largest number Nigeria 0.20 0.40 0.60 0.80 RI RQOLQH EX\HUV LQ WKH ZRUOG WDEOH} ,,  LW DFFRXQWV South Africa 0.60 0.80 1.10 1.20 IRU DQ HVWLPDWHG } SHU FHQW RI WKH WRWDO VDOHV RI Source: :RUOG3D\   %& HFRPPHUFH ƄJXUH} ,,  DQG IRU RQH WKLUG RI Note: Data include mobile and travel. the volume of international postal deliveries of small 26 INFORMATION ECONOMY REPORT 2015

%R[,, (FRPPHUFHFRPSDQLHVLQVXE6DKDUDQ$IULFDtVHOHFWHGH[DPSOHV

A range of e-commerce players have emerged in Africa in recent years, offering different solutions and services. While WKHUHDUHQRZWKRXVDQGVRIHFRPPHUFHVWDUWXSVWKURXJKRXWWKHFRQWLQHQWRQO\DKDQGIXOKDYHUHDFKHGVLJQLƄFDQWVFDOH RIWHQZLWKIRUHLJQEDFNLQJ7KHEXVLQHVVPRGHOVYDU\FRQVLGHUDEO\ • 2QH$IULFD0HGLDLVEDFNHGE\6HHN $XVWUDOLD DQG7LJHU*OREDO 8QLWHG6WDWHV DQGWKHKROGLQJFRPSDQ\IRU%X\ 5HQW .HQ\D %ULJKWHU 0RQGD\ 6DIDUL1RZ6WD\1RZ 3ULYDWH 3URSHUW\ -REEHUPDQ DQG &KHNL &KHNL LV D qYHUWLFDO FODVVLƄHGVrSRUWDOIRUFDUOLVWLQJVZLWKDSUHVHQFHLQ$IULFDQFRXQWULHV • 0,+ *URXS1DVSHUV 6RXWK $IULFD  LV EHKLQG EUDQGV VXFK DV 2/; 1HZV DQG 3URSHUW\ DQG KDV SUHYLRXVO\ VXSSRUWHG'HDO)LVK.DODKDULDQG0RFDOLW\2/;KDVDSUHVHQFHLQPRUHWKDQFRXQWULHVLQFOXGLQJDKDQGIXOLQ VXE6DKDUDQ$IULFD,WRIIHUVDqKRUL]RQWDOFODVVLƄHGVrSRUWDOWKDWHQDEOHVXVHUVWRXSORDGFRQWHQWVHQGSXUFKDVH LQTXLULHVDQGFORVHVDOHVZLWKRXWWKHLQYROYHPHQWRIDQHXWUDOWKLUGSDUW\ • 5RFNHW,QWHUQHW *HUPDQ\ RSHUDWHVLQPRUHWKDQFRXQWULHVDQGLVEHKLQGHFRPPHUFHEUDQGVVXFKDV-XPLD /DPXGL&DUPXGL+HOOR)RRGDQG-RYDJRLQVXE6DKDUDQ$IULFD-XPLDLVDQHFRPPHUFHSRUWDOZLWKDEDVHLQ 1LJHULDDQGDSUHVHQFHLQDQRWKHUVHYHQ$IULFDQPDUNHWV6LPLODUWR$PD]RQFRPLWPDLQWDLQVLWVRZQLQYHQWRU\DQG PDQDJHVORJLVWLFVDQGIXOƄOPHQWHQGWRHQG • 5LQJLHU 6ZLW]HUODQG  KDV RZQHUVKLS VWDNHV LQ $IULFDQ HFRPPHUFH FRPSDQLHV VXFK DV 5XSX 3LJLDPH =RRP 7DQ]DQLD7LVX3XOVH$OOVSRUWVDQG([SDW'DNDU • %LGRU%X\LQ.HQ\DDQG6RXWK$IULFDFRPELQHV%&DQG&&E\HQDEOLQJVHOOHUVWRLQGHSHQGHQWO\OLVWLWHPVIRU SXUFKDVHZKLOHDOVRPDQDJLQJVRPHLQYHQWRU\GLUHFWO\)RUH[DPSOHDEX\HULQ.HQ\DFDQHLWKHUSXUFKDVHDQLWHP IURPDWKLUGSDUW\VHOOHUWKURXJKDELGGLQJSURFHVVRUEX\DQLWHPGLUHFWO\IURP%LGRU%X\ • 9DULRXV HFRPPHUFH SD\PHQW JDWHZD\V KDYH HPHUJHG 7KHVH LQFOXGH EXW DUH QRW OLPLWHG WR L3D\ 3HVD3DO -DPER3D\3DJD .RSR .RSR

SDFNDJHV WDEOH} ,,  &KLQD UHSUHVHQWV D YHU\ ODUJH (a) Cambodia: Early signs of e-commerce share of the e-commerce activities in the region. In fact, in that country alone, there are more than $W ƄUVW JODQFH WKH HQYLURQPHQW LQ &DPERGLD LV QRW  HQWHUSULVHV IRFXVLQJ RQ %& %% RU && conducive to e-commerce. Internet adoption is low, HFRPPHUFH 3D\YLVLRQ   2WKHU LPSRUWDQW ZLWKRQO\ƄYH,QWHUQHWXVHUVSHUSHRSOHLQ PDUNHWV LQFOXGH -DSDQ WKH 5HSXEOLF RI .RUHD DQG DQ DYHUDJH Ƅ[HGEURDGEDQG SULFH RI DV PXFK and Singapore. At the same time, the region also DV } SHU FHQW RI JURVV QDWLRQDO LQFRPH SHU FDSLWD comprises many economies that are still at a nascent ,78 7KHODFNRIHOHFWURQLFSD\PHQWVDQGDQ stage of online commerce. Taking into account its XQUHOLDEOHSRVWDOV\VWHPDUHDGGLWLRQDOFKDOOHQJHV)RU huge population, there is considerable scope for LQVWDQFHRQO\}SHUFHQWRIDGXOWVXVHGHOHFWURQLF IXUWKHUHFRPPHUFHH[SDQVLRQLQWKHUHJLRQ,Q PHDQV WR PDNH D SD\PHQW LQ  $GGHG WR WKLV GLJLWDOEX\HUVUHSUHVHQWHGOHVVWKDQ}SHUFHQWRI are remaining gaps in the area of e-commerce WKH SRSXODWLRQ LQ $VLD DQG 2FHDQLD DV FRPSDUHG OHJLVODWLRQ FKDSWHU 9  1HYHUWKHOHVV WKHUH DUH VLJQV ZLWK}SHUFHQWLQ1RUWK$PHULFDDQG}SHUFHQWLQ of e-commerce involving innovative enterprises that :HVWHUQ(XURSH WDEOH},,  FLUFXPYHQWVXFKSUDFWLFDOKXUGOHV0RVWRIWKHPDUH FOXVWHUHGLQ3KQRP3HQKWKHODUJHVWFLW\DQGRSHUDWH To illustrate the diversity of the Asian region, a wide spectrum of services, from gaming to online three brief cases are presented below on the shopping and programming. e-commerce developments in Cambodia, Indonesia DQG WKH 3KLOLSSLQHV $OO WKUHH DUH PHPEHUV RI WKH 2QHRIWKHPDLQWHFKQRORJ\FRPSDQLHVLQ&DPERGLD $VVRFLDWLRQ RI 6RXWKHDVW $VLDQ 1DWLRQV $6($1  6DED\FRPZDVWKHƄUVWWRLQWURGXFHRQOLQHJDPLQJLQ EXWWKHLUH[SHULHQFHVLQWKHƄHOGRIHFRPPHUFHLV the country. In order to solve the issue of electronic varied. payments, it created Sabay Coins, a virtual currency. CHAPTER II : GLOBAL AND REGIONAL TRENDS 27

Customers now use cash to purchase Sabay Coins at 1DWLRQDO %DQN RI &DPERGLD The proposed legal RYHU,QWHUQHWFDIHVDQGJDPLQJFHQWUHVDURXQG framework may improve the regulatory environment the country. The currency is also available to clients of while innovative companies may resolve the payment FHUWDLQWRSXSVHUYLFHVDQGRI$%$%DQN&DPERGLDpV issue, either through electronic means or via cash on tenth largest bank. The coins are stored in the user’s delivery. At the same time, an unreliable postal system account and can be used to buy in-game items and and low levels of banking penetration remain longer other products online. The games are developed term challenges to e-commerce. LQ &KLQD DQG 9LHW 1DP DQG WKHQ DGDSWHG WR WKH &DPERGLDQPDUNHW$VRI$XJXVWWKHFRPSDQ\ (b) Indonesia: Leveraging social media KDGDERXWXVHUV About a quarter of Indonesia’s population – the fourth :KLOH ODUJH LQWHUQDWLRQDO SOD\HUV VXFK DV H%D\ DQG largest in the world – is currently online and the number Alibaba, have not yet introduced services that target LV ULVLQJ UDSLGO\ ,W LV H[SHFWHG WR JR IURP } PLOOLRQ the Cambodian market, some local retailers have. Little LQ  WR } PLOOLRQ E\  FRYHULQJ DERXW KDOI )DVKLRQ DQG 6KRSPH IRU H[DPSOH HQDEOH WKHLU the population. The number of online buyers was customers to browse and order products online. They H[SHFWHG WR UHDFK } PLOOLRQ LQ  SURYLGLQJ D XVHSULYDWHGHOLYHU\VHUYLFHVLQ3KQRP3HQKDQGUHFHLYH potentially large market for e-commerce. The value of FDVKRQGHOLYHU\%DQNZLUHWUDQVIHUVDUHDOVRSRVVLEOH HFRPPHUFHWUDQVDFWLRQVRI}ELOOLRQLQKDVEHHQ WKRXJK FRVWO\ ,Q  3D\*R 6($ &DPERGLD  &R IRUHFDVW WR VXUJH WR DERXW } ELOOLRQ E\  The /WGODXQFKHGDVHUYLFHFDOOHG3D\ *RLQFRRSHUDWLRQ PRVWYLVLWHGHFRPPHUFHVLWHLQ,QGRQHVLDLV$PD]RQ ZLWK $%$ %DQN It allows users to deposit money FRPIROORZHGE\WZRGRPHVWLFDOO\EDVHGVLWHV /D]DGD into an account that can be used for mobile or online FRLGDQG%KLQQHNDFRLG  3D\YLVLRQ  payments to participating retailers. A growing number of individuals and small businesses There is a small community of developers looking to in Indonesia are using social media platforms to VHL]HRQWKHQDVFHQWHFRPPHUFHPDUNHW6RPHDUH sell goods and services. Almost nine out of ten ORFDO RIƄFHV RI RXWVRXUFLQJ FRPSDQLHV WKDW GHYHORS Indonesians who go online also have a social media applications for foreign markets. Yoolk, for example, DFFRXQW DQG } SHU FHQW RI ,QGRQHVLDpV )DFHERRN LV VSHFLDOL]HG LQ SURGXFLQJ \HOORZ SDJHV IRU FLWLHV DQG7ZLWWHUWUDIƄFFRPHVIURPPRELOHGHYLFHV-DNDUWD DQGFRXQWULHVDURXQGWKHZRUOG2WKHUSURJUDPPHUV KDVEHHQLQIRUPDOO\GXEEHGWKHq)DFHERRNFDSLWDORI GHYHORS SURGXFWV IRU WKH ORFDO PDUNHW 9$ .RUD WKHZRUOGrDVWKHSODWIRUPKDVVRPH}PLOOLRQXVHUV D &DPERGLDQ ZKR VWXGLHG DQG ZRUNHG LQ -DSDQ in the capital city. FUHDWHGDFURZGVRXUFHGWUDIƄFDSSZKHUHXVHUVPDNH The use of social media is translating into commercial live updates of the situation in the city’s streets. After opportunities. A small but growing number of people D VL[PRQWK GHYHORSPHQW SHULRG KLV ƄYHSHUVRQ are offering their goods and services via this channel. WHDPODXQFKHGWKHIUHHDSSLQ-XQHIRUPRELOH )RUH[DPSOH0DPDKDPLOFRPKDVRIIHUHGPDWHUQLW\ RSHUDWLQJV\VWHPVL26DQG$QGURLG0RUHWKDQ FORWKHV RQ )DFHERRN VLQFH  DQG KDV VLQFH people have since downloaded the application. There LWV HVWDEOLVKPHQW GHYHORSHG D VL]DEOH FOLHQW EDVH are plans to allow businesses to target app users in Similarly, Saqina, an online fashion retailer that targets their immediate vicinities with special offers. 0XVOLP FRQVXPHUV LQ  UHFHLYHG PRUH WKDQ  Although such initiatives indicate a measure of recent  qOLNHVr RQ )DFHERRN Companies often progress, much work remains. Government efforts market themselves over a variety of platforms. In to improve the operating environment have focused DGGLWLRQWRWKHLUVRFLDOPHGLDHIIRUWVERWK0DPDKDPLO and Saqina are operating their own websites, and RQ FDSDFLW\EXLOGLQJ DQG UHJXODWLRQ ,Q -XQH  Saqina also has a presence on Alibaba.com. &DPERGLD XQYHLOHG LWV ,&7 0DVWHU 3ODQ DLPHG broadly at building infrastructure and improving There are various challenges to e-commerce in human capacity.&DPERGLDLVSDUWRIWKHH$6($1 Indonesia, including unreliable logistics and high )UDPHZRUN $JUHHPHQW HVWDEOLVKHG LQ  WR shipping costs. In addition, payment concerns are facilitate information infrastructure and promote rampant. Consumers have shown reluctance to use HFRPPHUFH 1HYHUWKHOHVV DV RI PLG D GUDIW online payments, mainly for fear of fraud and high rates e-commerce law was still awaiting comments from RIF\EHUFULPH,QDVXUYH\IUDXGZDVFLWHGE\ WKH0LQLVWU\RI3RVWDQG7HOHFRPPXQLFDWLRQVDQGWKH one third of Internet users as a reason for not shopping 28 INFORMATION ECONOMY REPORT 2015

online.,QWKHUHZHUHDERXW}PLOOLRQNQRZQ services. Nhommua.com, one of the largest discount cyberattacks in the country. Almost one quarter of all VLWHVLQWKHFRXQWU\ LWDFFRXQWHGIRU}SHUFHQWRIDOO personal computers in Indonesia have experienced a YRXFKHUVXVHGLQ9LHW1DPLQ HPSOR\HG malware attack over a three-month period, the highest motorbike drivers to collect commissions in cash from SHUFHQWDJH LQ WKH ZRUOG '$.$ $GYLVRU\   ,Q YHQGRUV DPRXQWLQJ WR VHYHUDO} PLOOLRQ 8QLWHG 6WDWHV UHJDUGV WR HFRPPHUFH IUDXG VSHFLƄFDOO\ ,QGRQHVLD dollars per month. Its customers receive the photo is number 14 globally. 6SHFLƄF H[DPSOHV DUH KDUG identity of the delivery person on every order and WRFLWHDVƄQDQFLDOIUDXGUHPDLQVXQGHUUHSRUWHG:KLOH vouchers are printed in the shape of business cards RIƄFLDOO\ UHSRUWHG ƄQDQFLDO ORVV IURP IUDXG WRWDOHG XVLQJ DQWLIUDXG IHDWXUHV VXFK DV KLJKTXDOLW\ ' LQDFWXDOFRVWVZHUHHVWLPDWHGWREHLQ holographic stickers. WKHKXQGUHGVRI}PLOOLRQV '$.$$GYLVRU\  6RPH VSHFLDOL]HG FRPSDQLHV KDYH EHHQ HVWDEOLVKHG To improve perceptions of payment vulnerability or to address the delivery and payment function of WR VHL]H RQ WKH RSSRUWXQLW\ WR EHQHƄW IURP LW WKUHH HFRPPHUFH2QHRIWKHPRVWZHOONQRZQLV*LDR+DQJ telecommunications operators (Indosat, Telkomsel and 1KDQKZKLFKPHDQVqGHOLYHUJRRGVTXLFNO\r,Q ;/  LQ 'HFHPEHU  ODXQFKHG D SLORW SHHUWRSHHU WKHFRPSDQ\VHUYHGPRUHWKDQRQOLQHPHUFKDQWV electronic transaction service, facilitated by the Central RI ZKLFK DW OHDVW  ZHUH ODUJH %& HFRPPHUFH %DQN$OWKRXJKWKHVHUYLFHKDVEHHQRIIWRDVORZVWDUW ZHEVLWHV 7KH FRPSDQ\ GHOLYHUHG PRUH WKDQ  LWPD\EHFRPHSRSXODUVLQFHRQO\DERXWRQHƄIWKRIWKH RUGHUVLQLWVƄUVW\HDUDQGKDQGOHGDERXW}ELOOLRQ RYHU population has access to a bank account.  RIWUDQVDFWLRQVSHUZHHN,WDOVRKDVDFDVK The Government is working to introduce regulatory payment collection system to prevent fraud. measures to improve e-commerce generally and The need for motorbikes to collect cash may decrease F\EHUVHFXULW\ VSHFLƄFDOO\ 81&7$' D  7KH in the future as trust in online payments increases. In (OHFWURQLF6\VWHP3URYLGHUDQG(OHFWURQLF7UDQVDFWLRQ DVXUYH\RIHFRPPHUFHHQWHUSULVHV}SHUFHQW 5HJXODWLRQ   UHTXLUHV DQ\RQH ZKR GHDOV had introduced an online payment function and more ZLWK HOHFWURQLF V\VWHPV DQG WUDQVDFWLRQV IRU qSXEOLF than half of those that had not were intending to. VHUYLFHVr VXFK DV HFRPPHUFH WR UHJLVWHU ZLWK WKH Industry sources expect online payments to rise along 0LQLVWU\RI&RPPXQLFDWLRQDQG,QIRUPDWLRQ7HFKQRORJ\ with an increase in bank accounts.41 The aim is to strengthen and empower capacity- building of national electronic system providers through )URPDGHPDQGSHUVSHFWLYHLPSURYHGFRQQHFWLYLW\KDV QDWLRQDO FHUWLƄFDWLRQ DQG VWDQGDUGL]DWLRQ 3URYLGHUV DFFHOHUDWHGHFRPPHUFHXSWDNH)RUH[DPSOH,QWHUQHW are also asked to have a data centre within the country XVHUVDOPRVWGRXEOHGIURP}SHUFHQWRIWKHSRSXODWLRQ  and use the dot id (.id) domain. LQWR}SHUFHQWLQ The demand for online services has also been matched by relevant regulation, (c) Viet Nam: How motorbikes power online QRWDEO\ WKH /DZ RQ (OHFWURQLF 7UDQVDFWLRQ   business DQGWKH/DZRQ,QIRUPDWLRQ7HFKQRORJ\  %XW HFRPPHUFHLQ9LHW1DPLVVWLOOKHOGEDFNE\DQXUEDQt ,Q PRVW HPHUJLQJ PDUNHWV SD\PHQW DQG IXOƄOPHQW UXUDO GLYLGH 2XWVLGH RI +DQRL DQG +R &KL 0LQK &LW\ SURFHGXUHV UHPDLQ EDUULHUV WR HFRPPHUFH ,Q 9LHW e-commerce continues to lag. The main obstacles in Nam, very few people use electronic payments. In a WKHERWWRPORFDOLWLHVDUHDODFNRIKXPDQUHVRXUFHV VXUYH\RILQGLYLGXDO,QWHUQHWXVHUVLQ+DQRL and inadequate infrastructure.44 DQG+R&KL0LQK&LW\WKUHHTXDUWHUVRIWKRVHVXUYH\HG KDGXVHGFDVKSD\PHQWEXWRQO\}SHUFHQWKDGXVHG 3. Latin America: Diverse ecosystem some intermediate payment service on e-commerce websites. Some local e-commerce providers have still to reach full potential turned the reliance on cash on delivery into an ,Q/DWLQ$PHULFD%&HFRPPHUFHDPRXQWHGWRVRPH opportunity by making innovative use of motorbike }ELOOLRQLQRUDERXW}SHUFHQWRIWKHJOREDO GHOLYHU\,QDFRXQWU\RI}PLOOLRQSHRSOHWKHUHDUHD total.45 0HDQZKLOH DERXW } SHU FHQW RI WKH ZRUOGpV VWDJJHULQJ}PLOOLRQPRWRUELNHV RQOLQHEX\HUVZHUHIRXQGLQWKLVUHJLRQ WDEOH},, 7KH 0RWRUELNHV DUH QRW RQO\ XVHIXO WR FROOHFW SD\PHQWV PDUNHWLVGRPLQDWHGE\%UD]LO ER[,, ZKLFKDFFRXQWV WKH\ KHOS WR RYHUFRPH WKH RUGHU IXOƄOPHQW FKDOOHQJH IRUVRPH}SHUFHQWRIWKHUHJLRQpVWRWDO%&VDOHV by circumventing inadequate infrastructure and postal IROORZHGE\0H[LFR }SHUFHQW DQG$UJHQWLQD }SHU CHAPTER II : GLOBAL AND REGIONAL TRENDS 29

%R[,, 'DWDRQHFRPPHUFHLQ%UD]LO

$QQXDOVXUYH\VDQGUHSRUWVIURPWKH%UD]LOLDQ,QWHUQHW&RPPLWWHHFRQVWLWXWHDULFKVRXUFHRIQDWLRQDOO\UHSUHVHQWDWLYH VWDWLVWLFVRQHFRPPHUFH7KHFRXQWU\ERDVWVDVLJQLƄFDQWHFRPPHUFHFRQVXPHUPDUNHW,Q}PLOOLRQ%UD]LOLDQV SXUFKDVHGRQOLQH UHSUHVHQWLQJRQHWKLUGRIDOO,QWHUQHWXVHUV 0DQ\%UD]LOLDQ,QWHUQHWXVHUVFRQQHFWYLDPRELOHGHYLFHV and are active on social networks. Generally, e-commerce use is higher among young people and people with high incomes, good education and living in urban areas.

%UD]LOLDQHQWHUSULVHVXVHDFFHVVWRWKH,QWHUQHWDQGZHESUHVHQFHIRULQWHUDFWLQJZLWKWKHLUFXVWRPHUVLQDYDULHW\RI ZD\V,Q}SHUFHQWKDGDFFHVVWRWKH,QWHUQHWPRUHWKDQKDOIKDGDZHEVLWHDQG}SHUFHQWKDGRQOLQHVRFLDO PHGLDSURƄOHV%UD]LOLDQHQWHUSULVHVKDYHDJUHDWHUSUHVHQFHRQVRFLDOQHWZRUNVWKDQ(XURSHDQEXVLQHVVHVDQGVPDOO EXVLQHVVHVLQSDUWLFXODUVHHPWRUHO\PRUHRQVRFLDOQHWZRUNSURƄOHVWKDQRQZHEVLWHV+RZHYHU%UD]LOLDQHQWHUSULVHV KDYHQRW\HWHPEUDFHGWKHIXOOSRWHQWLDORIHFRPPHUFH:KLOHKDOIRIWKHPERXJKWJRRGVDQGVHUYLFHVRQOLQHRQO\}SHU cent had ventured into selling online.

Source: 6HHKWWSZZZFHWLFEUSHVTXLVDHPSUHVDVLQGLFDGRUHV DFFHVVHG}-DQXDU\ 

WRS  ZHE PHUFKDQWV LQ WKH UHJLRQ IRXQG WKDW DV cent). According to internetretailer.com, the top two PDQ\DVRIWKHPZHUHEDVHGLQ%UD]LO%UD]LOLDQ ZHE PHUFKDQWV LQ /DWLQ $PHULFD DUH %: DQG 1RYD consumers prefer to use credit cards when purchasing 3RQWRFRP WDEOH},, ,QVHYHUDOUHJDUGVWKHSRWHQWLDO RQOLQH 3D\YLVLRQ  for e-commerce remains far from fully exploited. )RU H[DPSOH WKH UHJLRQ UHFHLYHV FRQVLGHUDEO\ PRUH 0H[LFRpVHFRPPHUFHVHFWRULVOHVVGHYHORSHGWKDQ international deliveries of small packages through the WKDW RI %UD]LO DQG $UJHQWLQD GXH WR ORZ FUHGLW FDUG SRVWDOV\VWHPWKDQLWH[SRUWV WDEOH},,  adoption, unreliable shipping and delivery logistics and a large gap between upper and lower classes. %UD]LOLVWKHPRVWPDWXUHDQGWKHODUJHVWHFRPPHUFH 0H[LFDQ RQOLQH VKRSSHUV DOVR UHO\ PRUH RQ PRELOH PDUNHWLQ/DWLQ$PHULFD%UD]LOLDQFRQVXPHUVXVHQRW GHYLFHV,Q}SHUFHQWRIDOO,QWHUQHWXVHUVXVHG RQO\ HFRPPHUFH SODWIRUPV VXFK DV 0HUFDGR/LEUH PRELOHGHYLFHVIRURQOLQHVKRSSLQJ0HDQZKLOHFDVK ER[ ,,  6XEPDULQR D ZHEVLWH RI %:  5DNXWHQ LVVWLOOSUHIHUUHGRYHUFUHGLWFDUGV 3D\YLVLRQ  1RYRD3RQWRFRPDQG'HVSHJDU RQOLQHWUDYHODJHQF\  but also compare prices with websites such as In the region, Argentina, Chile and Uruguay have %XVFDSÆDQGJURXSEX\LQJSODWIRUPVVXFKDV3HL[H the highest percentage of online shoppers among Urbano and Groupon. A growing number of bricks- ,QWHUQHW XVHUV QHDU } SHU FHQW 49 3URPLQHQW ORFDO and-mortar retailers have also launched online e-commerce platforms are Garbarino (Argentina), RIIHULQJV VXFK DV $PHULFDQDV D ZHEVLWH RI %:  )DODEHOODDQG&HQFRVXG ERWKLQ&KLOH 1HYHUWKHOHVV &DVDV %DKLD DQG :DO0DUW %UD]LOLDQ FRQVXPHUV consumers from the region have a preference to buy consult frequently online product reviews and IURPLQWHUQDWLRQDOSODWIRUPV$ERXW}SHUFHQWRIWKH exchange views and opinions on goods and services GLJLWDOEX\HUVLQ%UD]LO&KLOH&RORPELD0H[LFRDQG on social media sites. The most commonly purchased 3HUX SUHIHU LQWHUQDWLRQDO ZHEVLWHV Argentina is at items online are clothes and accessories, cosmetics the other end of the spectrum with three out of four and perfumes and appliances. An analysis of the consumers opting for local websites.

%R[,, 0HUFDGR/LEUH

0HUFDGR/LEUHKRVWVWKHODUJHVWRQOLQHHFRPPHUFHSODWIRUPLQWKHUHJLRQZLWKRSHUDWLRQVLQ$UJHQWLQD%UD]LO&KLOH &RORPELD&RVWD5LFDWKH'RPLQLFDQ5HSXEOLF(FXDGRU0H[LFR3DQDPD3HUX8UXJXD\DQGWKH%ROLYDULDQ5HSXEOLFRI 9HQH]XHODRIIHULQJERWK%&DQG&&VROXWLRQV,QLWPHGLDWHGWUDQVDFWLRQVEHWZHHQ}PLOOLRQXQLTXHVHOOHUVDQG }PLOOLRQXQLTXHEX\HUVFRQWULEXWLQJWRDJURVVPHUFKDQGLVHYROXPHRI}ELOOLRQ,WRIIHUVVHYHUDOW\SHVRIVHUYLFHV DQRQOLQHPDUNHWSODFHWKH0HUFDGR3DJRSD\PHQWVVROXWLRQDGYHUWLVLQJFODVVLƄHGDGYHUWLVHPHQWVDVROXWLRQIRURQOLQH VWRUHV DQG DQ LQWHJUDWHG VKLSSLQJ VHUYLFH 0HUFDGR/LEUH RULJLQDWHV LQ $UJHQWLQD ZKHUH WKH FRPSDQ\ VWLOO HPSOR\V approximately half of its staff.

Source: 81&7$'EDVHGRQLQIRUPDWLRQIURPKWWSLQYHVWRUPHUFDGROLEUHFRPVHFƄOLQJFIP"ƄOLQJ,'  DFFHVVHG}-DQXDU\  30 INFORMATION ECONOMY REPORT 2015

C. CONCLUSIONS landscape in developing economies. A number of local e-commerce enterprises, sometimes with the support (FRPPHUFH KDV H[SDQGHG VLJQLƄFDQWO\ LQ WKH SDVW of foreign investors, are leveraging this potential. decade and is expected to continue to grow rapidly in the coming years. It is estimated by UNCTAD A global comparison of enterprise-level e-commerce WKDW JOREDO %% HFRPPHUFH DPRXQWHG WR DERXW DFWLYLW\VKRZVWKDWVL]HPDWWHUVZLWKPLFURDQGVPDOO } WULOOLRQ LQ  DQG JOREDO %& HFRPPHUFH enterprises being persistently less likely to both buy WRVRPH}WULOOLRQ:KHUHDV%%DFFRXQWVIRUWKH DQG VHOO RQOLQH .QRZOHGJH IURP WKH VSHFLDOL]HG overwhelming share of all e-commerce transaction, ,&7 VHFWRU FRXOG KDYH DQ LQƅXHQFH RQ WKH OHYHO RI %&DSSHDUVWREHJURZLQJIDVWHU e-commerce activity. The highest share of enterprises buying online was recorded in the computer and 7KH EXON RI WKH ZRUOGpV } ELOOLRQ GLJLWDO EX\HUV related services sector in many different countries. QRZ UHVLGH LQ GHYHORSLQJ FRXQWULHV (FRPPHUFH LQ GHYHORSLQJFRXQWULHVKDVH[SDQGHGVLJQLƄFDQWO\ZLWK There is a relatively high degree of market concentration fast growth documented particularly in Asia. China among the approximate global population of more has emerged into the global and regional leader in WKDQ } PLOOLRQ HQWHUSULVHV HQJDJHG LQ HFRPPHUFH %& HFRPPHUFH 7KH 0LGGOH (DVW DQG $IULFD DUH 7KHWRSZHEPHUFKDQWVLQGLIIHUHQWUHJLRQVDFFRXQW H[SHFWHGWRVHHWKHLUVKDUHRIJOREDO%&HFRPPHUFH IRUEHWZHHQ}SHUFHQW LQ(XURSH DQG}SHUFHQW ULVHVOLJKWO\XQWLOZKLOHWKDWRI:HVWHUQ(XURSH LQ $VLD  RI WKH WRWDO VDOHV RI WKH  ODUJHVW ZHE and North America is set to decline considerably. merchants. 2IƄFLDODQGFRPSDUDEOHVWDWLVWLFVRQHFRPPHUFHDUH 5HJLRQDO GHYHORSPHQWV GLIIHU FRQVLGHUDEO\ DOWKRXJK lacking in most developing and transition economies, e-commerce is expanding in all parts of the world. PDNLQJ LW GLIƄFXOW WR DVVHVV WUHQGV $YDLODEOH GDWD In Africa, the expansion is linked to the rapid uptake suggest that cross-border transactions are relatively of mobile solutions for making digital transactions. more important in developing economies than in %RWK GRPHVWLF DQG IRUHLJQ FRPSDQLHV DUH HQWHULQJ developed countries, where most e-commerce the market, offering tailored e-commerce, payment transactions cater for domestic customers. A number and delivery solutions. In Asia, the patterns are of factors are constraining e-commerce, such as KLJKO\ GLYHUVH UDQJLQJ IURP WKH ZRUOGpVODUJHVW %& unreliable and lengthy transit times and logistics, high e-commerce market (China) to countries in which costs of shipment, reluctance to use online payment, e-commerce is only beginning to emerge. The region and a lack of transparency on delivery and pricing. is witnessing the rise of global champions as well The scope for e-commerce is expanding thanks to DV VPDOOHU HQWHUSULVHV WKDW DUH FDWHULQJ VSHFLƄFDOO\ FKDQJHV LQ WHFKQRORJ\ DQG PDUNHWV 5LVLQJ VRFLDO to domestic markets. Latin America’s e-commerce networking activity, greater reliance on mobile Internet PDUNHWLVGRPLQDWHGE\%UD]LO0H[LFRDQG$UJHQWLQD access (albeit often at reduced speeds) and innovation Consumers in the region have a preference to buy from in delivery services by the posts and private-sector LQWHUQDWLRQDO SODWIRUPV UHƅHFWLQJ LQ VRPH FRXQWULHV entrants are key features of the evolving e-commerce relatively nascent domestic e-commerce markets. CHAPTER II : GLOBAL AND REGIONAL TRENDS 31

NOTES

1 6HHq'LJLWDOWHFKQRORJ\DQG,QWHUQHWXVHrStatistics Canada-XQHDYDLODEOHDWKWWSZZZVWDWFDQ JFFDGDLO\TXRWLGLHQGTDHQJKWP DFFHVVHG)HEUXDU\ 

 6HHKWWSZZZNRVWDWJRNUSRUWDOHQJOLVKQHZVLQGH[ERDUG"EPRGH UHDG E6HT D6HT  SDJH 1R  URZ1XP  QDY&RXQW  FXUU3J V7DUJHW WLWOH V7[W  DFFHVVHG)HEUXDU\ 

 6HHq(FRPPHUFHв России: поле для ростаr (FRPPHUFHLQ5XVVLDtDSRWHQWLDOIRUJURZWK iKS Consulting, }2FWREHUDYDLODEOHDWKWWSZZZLNVFRQVXOWLQJUXUDLWLQJVKWPO DFFHVVHG)HEUXDU\ 

4 6HH KWWSHSSHXURVWDWHFHXURSDHXWJPWDEOHGR"WDE WDEOH LQLW  ODQJXDJH HQ SFRGH WLQ (accessed })HEUXDU\ 7KHWRWDODPRXQWRIƄUPWXUQRYHULVQRWUHSRUWHG

5 5RXJKO\RQHWKLUGRIDOOHFRPPHUFHUHYHQXHUHVXOWHGIURPZHEVLWHVDOHV ZKLFKLQFOXGHV%&%%DQG%* WUDQVDFWLRQV DQGWZRWKLUGVIURP(',:LWKLQZHEVLWHVDOHV}SHUFHQWZDVUHODWHGWR%&ZLWKWKHUHPDLQGHUIURP %%DQG%*

 ([FOXGLQJVHOHFWHGVHUYLFHV

 6HH q(FRPPHUFH в России: поле для ростаr (FRPPHUFH LQ 5XVVLD t D SRWHQWLDO IRU JURZWK  iKS Consulting, }2FWREHUDYDLODEOHDWKWWSZZZLNVFRQVXOWLQJUXUDLWLQJVKWPO DFFHVVHG}-DQXDU\ 

 6HHq&URVVERUGHUHFRPPHUFHPDNHVWKHZRUOGƅDWWHUrbcg.perspectives6HSWHPEHUDYDLODEOHDWKWWSV ZZZEFJSHUVSHFWLYHVFRPFRQWHQWDUWLFOHVWUDQVSRUWDWLRQBWUDYHOBWRXULVPBUHWDLOBFURVVBERUGHUBHFRPPHUFHB PDNHVBZRUOGBƅDWWHU DFFHVVHG}-DQXDU\ 

9 5HJUHWWDEO\WKHUHDUHQRHTXLYDOHQWGDWDVKRZLQJLQWHUQDWLRQDOWUDGHLQVHUYLFHV

 See KWWSHSSHXURVWDWHFHXURSDHXVWDWLVWLFVBH[SODLQHGLQGH[SKS(FRPPHUFHBVWDWLVWLFV DFFHVVHG}-DQXDU\  

11 6HHq'LJLWDOWHFKQRORJ\DQG,QWHUQHWXVHrStatistics Canada-XQHDYDLODEOHDWKWWSZZZVWDWFDQ JFFDGDLO\TXRWLGLHQGTDHQJKWP DFFHVVHG}-DQXDU\ 

 7KLVLQGLFDWRUUHIHUVWRSULYDWHRUQRQZRUNDFWLYLWLHV ,78E 

 2WKHUSRVVLEOHDFWLYLWLHVXQGHUWKLVLQGLFDWRUWKDWFRXOGLPSO\DSD\PHQWDUHUHODWHGWROHLVXUHVXFKDVOLVWHQLQJWR web radio or watching web television, streaming or downloading media, or downloading software or applications.

14 (XURSHDQ GDWD FRPH IURP WKH (XURSHDQ &RPPXQLW\ VXUYH\ RQ q,&7 XVDJH DQG HFRPPHUFH LQ HQWHUSULVHVr available at KWWSHSSHXURVWDWHFHXURSDHXVWDWLVWLFVBH[SODLQHGLQGH[SKS(FRPPHUFHBVWDWLVWLFV DFFHVVHG }-DQXDU\ 2WKHUVWXGLHVVKRZWKDWVL]HLVDPRUHGLVFULPLQDWLQJIDFWRUIRUHFRPPHUFHWKDQHQWHUSULVHDJH )DONDQG+DJVWHQ 

15 6HHKWWSEORJUMPHWULFVFRPKRZPDQ\HFRPPHUFHFRPSDQLHVDUHWKHUH

 6HH KWWSZZZVWDWLVWDFRPVWDWLVWLFVPDUNHWVKDUHRIWKHOHDGLQJUHWDLOHUVLQXVHFRPPHUFH DFFHVVHG })HEUXDU\).

 6HHKWWSZZZLQWHUQHWUHWDLOHUFRPZHVWPHHWVHDVW DFFHVVHG)HEUXDU\ 

 6HH KWWSZZZLQWHUQHWUHWDLOHUFRPDPD]RQVKRZVELJRSSRUWXQLW\ODWLQDPHULFDHFRPPHUFH DFFHVVHG)HEUXDU\ 

19 6HHKWWSVWZLWWHUFRP:6-VWDWXV DFFHVVHG)HEUXDU\ 

 See KWWSLQWHUQHWRUJSUHVVLQWURGXFLQJWKHLQWHUQHWGRWRUJDSS DFFHVVHG}-DQXDU\ 

 6HHqRISKRQHVVROGVPDUWSKRQHVt6DIDULFRPrhumanipo$SULODYDLODEOHDWKWWSZZZKXPDQLSR FRPQHZVNHQ\DVVPDUWSKRQHSHQHWUDWLRQDWVDIDULFRP DFFHVVHG}-DQXDU\ 

 6HHq0RUHWKDQPHHWVWKHH\HVWDUWXSVFRPLQJRXWRI&DPERGLDrTechinAsia2FWREHUDYDLODEOH at KWWSZZZWHFKLQDVLDFRPVWDUWXSVIURPFDPERGLD DFFHVVHG}-DQXDU\ .

 See KWWSDERXWXVVDED\FRPDUWLFOHVFDWHJRU\DERXWXV DFFHVVHG}-DQXDU\ KWWSHFRJJLQVKXESDJHV FRPKXE&DPERGLD%DQNLQJ6HFWRU7RS%DQNLQJ,QVWLWXWLRQVLQ&DPERGLD DFFHVVHG}-DQXDU\ 

 See KWWSJHHNVLQFDPERGLDFRPVDED\DGLJLWDOOHDGHULQFDPERGLD DFFHVVHG}-DQXDU\  32 INFORMATION ECONOMY REPORT 2015

 6HHq3D\ *RDLPVWRVWUHDPOLQHELOOSD\PHQWVZLWKQHZVHUYLFHVrCambodia Daily}2FWREHUDYDLODEOH at KWWSZZZFDPERGLDGDLO\FRPDUFKLYHVSD\JRDLPVWRVWUHDPOLQHELOOSD\PHQWVZLWKQHZVHUYLFHV DFFHVVHG}-DQXDU\ 

 6HH q7HFKLHWDNHV RQ &DPERGLDpVWUDIƄF KHDGDFKHV ZLWK DSSr Phnom Penh Post  -XQH  DYDLODEOH DW KWWSZZZSKQRPSHQKSRVWFRPOLIHVW\OHWHFKLHWDNHVFDPERGLD(VWUDIILFKHDGDFKHVDSS DFFHVVHG}-DQXDU\ 

 See KWWSZZZNRLFDFDPERGLDRUJNRLFDDQGPSWFUHOHDVHFDPERGLDLFWPDVWHUSODQ DFFHVVHG}-DQXDU\  

 6HH q(FRPPHUFH ODZ JRHV DKHDG ZLWK :% IXQGLQJr Cambodia Daily  -XQH  DYDLODEOH DW KWWSZZZFDPERGLDGDLO\FRPEXVLQHVVHFRPPHUFHODZJRHVDKHDGZLWKZEIXQGLQJ (accessed }-DQXDU\ 

 See KWWSZZZDSMLLRULGYLQGH[SKSUHDGFRQWHQWDSMLLDWPHGLDSHQJJXQDLQWHUQHWLQGRQHVLDELVD WHPEXVMXKWPO DFFHVVHG}-DQXDU\ 

 6HHq$VKRSSLQJERQDQ]DDW\RXUƄQJHUWLSVrThe Jakarta Globe$XJXVWDYDLODEOHDWKWWSZZZ WKHMDNDUWDJOREHFRPIHDWXUHVVKRSSLQJERQDQ]DƄQJHUWLSV DFFHVVHG}-DQXDU\ 

 6HH q-DNDUWD QDPHG ZRUOGpV )DFHERRN FDSLWDOr Asian Correspondent } 0DUFK  DYDLODEOH DW KWWS DVLDQFRUUHVSRQGHQWFRPMDNDUWDUHFRJQLVHGDVWKHZRUOGVIDFHERRNFDSLWDO DFFHVVHG}-DQXDU\ 

 See KWWSVZZZIDFHERRNFRPVDTLQDRQOLQH DFFHVVHG}-DQXDU\ 

 See KWWSZZZHFRQRPLVWLQVLJKWVFRPDQDO\VLVJRRGJURZ DFFHVVHG}-DQXDU\ 

 See KWWSEORJVLIWVFLHQFHFRPJOREDOHFRPPHUFHIUDXG DFFHVVHG}-DQXDU\ 

 See KWWSHFRQZRUOGEDQNRUJ:%6,7((;7(51$/(;7'(&(;75(6($5&+(;7352*5$06(;7),15(6 (;7*/2%$/),1FRQWHQW0'.aSDJH3.aSL3.aWKH6LWH3. html DFFHVVHG}-DQXDU\ 

 See KWWSZZZHFRQRPLVWLQVLJKWVFRPWHFKQRORJ\LQQRYDWLRQDQDO\VLVIXWXUHEURDGEDQGVRXWKHDVWDVLD (accessed }-DQXDU\ 

 See KWWSZRUGKFPFFRPFRPSRQHQWFRQWHQWDUWLFOHLQVLGHUJHQHUDOELNHWRWKHIXWXUH (accessed }-DQXDU\ 

 See KWWSZZZHFRQRPLVWLQVLJKWVFRPDQDO\VLVJRRGJURZ DFFHVVHG}-DQXDU\ 

 6HHq+RZ*LDR+DQJ1KDQKVROYHVORJLVWLFVLQ9LHW1DPpVJURZLQJHFRPPHUFHPDUNHWrTech in Asia}0DUFK  DYDLODEOH DW KWWSZZZWHFKLQDVLDFRPJLDRKDQJQKDQKVROYHVORJLVWLFVYLHWQDPVJURZLQJHFRPPHUFH market/ DFFHVVHG}-DQXDU\ 

 See KWWSZZZPRLWJRYYQHQ1HZVHFRPPHUFHUHSRUWDVS[ DFFHVVHG}-DQXDU\ 

41 See KWWSZZZYLHWQDPEULHƄQJFRPQHZVYLHWQDPRQOLQHXQGHUVWDQGLQJYLHWQDPVHFRPPHUFHPDUNHWKWPO DFFHVVHG}-DQXDU\ 

 See KWWSGDWDZRUOGEDQNRUJGDWDFDWDORJZRUOGGHYHORSPHQWLQGLFDWRUV DFFHVVHG}-DQXDU\ 

 6HYHUDOGHFUHHVDOVRSURYLGHJXLGDQFHRQWKHVHODZVLQFOXGLQJ'HFUHH1R1'&3RQHFRPPHUFHDQG 'HFUHH1R1'&3RQPDQDJHPHQWSURYLVLRQDQGXVHRI,QWHUQHWVHUYLFHVDQGRQOLQHLQIRUPDWLRQ

44 See KWWSZZZPRLWJRYYQHQ1HZVHFRPPHUFHUHSRUWDVS[ DFFHVVHG}-DQXDU\ 

45 2WKHUVRXUFHVHVWLPDWHWKHWRWDOYDOXHRIHFRPPHUFHVDOHVDW}ELOOLRQLQVHHKWWSODWLQOLQNXVPHGLDFRQVXOWLQJ FRPWKHVWURQJHVWHFRPPHUFHPDUNHWVLQODWLQDPHULFD DFFHVVHG}-DQXDU\ 

 'DWDIURPH0DUNHWHUFRPDVRI-XO\

 6HH q7KH VWURQJHVW HFRPPHUFH PDUNHWV LQ /DWLQ $PHULFDr latinlink } $SULO  DYDLODEOH DW KWWSODWLQOLQN XVPHGLDFRQVXOWLQJFRPWKHVWURQJHVWHFRPPHUFHPDUNHWVLQODWLQDPHULFD DFFHVVHG}-DQXDU\ 

 6HHq%UD]LOOHDGV/DWLQ$PHULFDQHFRPPHUFHJURZWKEHFRPLQJ$PD]RQpVELJJHVWIRUHLJQPDUNHWrLatin Post,  -XO\  DYDLODEOH DW KWWSZZZODWLQSRVWFRPDUWLFOHVEUD]LOOHDGVODWLQDPHULFDQ HFRPPHUFHJURZWKEHFRPLQJDPD]RQVELJJHVWIRUHLJQPDUNHWKWP DFFHVVHG}-DQXDU\ 

49 See KWWSHWFGLJLWDORUJGLJLWDOWUHQGVHFRPPHUFHHFRPPHUFHLQVLJKWVUHJLRQDORYHUYLHZODWLQDPHULFD (accessed }-DQXDU\ 

 6HH KWWSHWFGLJLWDORUJGLJLWDOWUHQGVHFRPPHUFHHFRPPHUFHLQVLJKWVUHJLRQDORYHUYLHZODWLQDPHULFD DFFHVVHG }-DQXDU\  MEASURING THE E-COMMERCE READINESS 3 OF COUNTRIES

With a view to assessing the e-commerce readiness of countries, this chapter starts by identifying a set of key facilitating factors that determine the extent to which enterprises and consumers are able to engage in online commerce. While the focus is on B2C transactions, the prerequisites for participating in %%HFRPPHUFHDUHVLPLODU%DVHGRQWKHDQDO\VLVRIWKHIDFWRUVLQƅXHQFLQJ the scope for e-commerce, the chapter introduces the UNCTAD B2C E-commerce Index covering 130 economies. This new Index allows countries to compare their e-commerce readiness against others and indicates their relative strengths and weaknesses concerning different elements of the e-commerce process. 34 INFORMATION ECONOMY REPORT 2015

A. FACTORS  ,78 7KLVLPSOLHVWKDWDOPRVWIRXULQWHQ INFLUENCING people around the world could theoretically make online purchases from different locations, such as THE SCOPE FOR home, telecentres or from mobile devices. E-COMMERCE The proportion of enterprises that access the To assess the e-commerce potential in a country, ,QWHUQHWLVKHDYLO\LQƅXHQFHGE\WKHLUVL]HZLWKODUJHU LW LV XVHIXO WR FRQVLGHU D VLPSOLƄHG HFRPPHUFH ƄUPVWHQGLQJWRKDYHPXFKKLJKHUOHYHOVRIXVHWKDQ WUDQVDFWLRQ SURFHVV ƄJXUH} ,,,  6HYHUDO IDFLOLWDWLQJ VPDOOHU RQHV FKDSWHU ,,  2Q WKH SDUW RI WKH VHOOHU IDFWRUV LQƅXHQFH WKH VFRSH IRU LPSOHPHQWLQJ a web presence for accepting orders is necessary VXFFHVVIXOO\ VXFK WUDQVDFWLRQV DIIRUGDEOH ,QWHUQHW (even if outsourced to a third party). The number of access, mechanisms for paying for goods and e-commerce websites is a useful indicator of the services ordered online, and effective solutions for capabilities for receiving online orders. According to their delivery (electronically or physically). The legal RQH VRXUFH DURXQG  HFRPPHUFH VLWHV LQ 1 DQGUHJXODWRU\IUDPHZRUNZKLFKDOVRLQƅXHQFHVWKH WKHZRUOGJHQHUDWHGQRQQHJOLEOHUHYHQXHLQ extent to which enterprises and consumers are willing However, these data are neither regularly collected WRWUDQVDFWRQOLQHLVGLVFXVVHGLQFKDSWHU9:KHUHDV nor available by country. Given that e-commerce ƄJXUH},,,GHSLFWV%&WUDQVDFWLRQVE\UHSODFLQJWKH sites require security software, one widely available qFRQVXPHUr ZLWK D qSXUFKDVLQJ EXVLQHVVr LW FDQ EH proxy for the quality of e-commerce infrastructure DSSOLHGDOVRWR%% is the number of secure servers using encryption technology for Internet transactions. There are 1. Internet access considerable differences between countries in WKLV DUHD ,Q  WKHUH ZHUH RYHU  VHFXUH Internet access for both buyers and sellers is needed GDWD VHUYHUV SHU} PLOOLRQ LQKDELWDQWV LQ KLJKLQFRPH to conduct online shopping. According to ITU, there HFRQRPLHV FRPSDUHG WR RQH VHUYHU SHU} PLOOLRQ ZHUH } ELOOLRQ ,QWHUQHW XVHUV DFURVV WKH ZRUOG LQ LQKDELWDQWVLQ/'&V ƄJXUH},,, 

)LJXUH},,,%&HFRPPHUFHWUDQVDFWLRQSURFHVVHV

Order

Consumer Business Payment

Delivery

2QOLQH ERRNPXVLFYLGHRHWF

Product

Source: UNCTAD. CHAPTER III : MEASURING THE E-COMMERCE READINESS OF COUNTRIES 35

2. Payment systems for online a service provider and provide credit or bank purchases account details as the source of payments. In order to pay, they need only to know the seller’s email )RUDOOIRUPVRIHFRPPHUFHDFFHVVWRFRPSHWLWLYH DGGUHVVZKLFKLVYHULƄHGDQGOLQNHGWRWKHVHUYLFH SD\PHQW VROXWLRQV LV D FULWLFDO IDFLOLWDWRU )HZ provider’s account. The payment is debited from enterprises or people are willing to sell online without the e-shoppers personal account without further VRPH LQGLFDWLRQ RI SD\PHQW RQOLQH RU RIƅLQH  E\ ƄQDQFLDOLQIRUPDWLRQWUDQVPLWWHGWRWKHVHOOHU the buyer. In contrast to bricks-and-mortar retail • 0RELOHSD\PHQWDQGWHOHSKRQ\DFFRXQWV\VWHPV stores, online retailers often require payment to be Using a mobile device, buyers can purchase PDGHEHIRUHFRPSOHWLQJWKHVDOH3D\PHQWV\VWHPV SURGXFWV LQ WZR SULQFLSDO ZD\V (XURSHDQ are rapidly evolving, expanding the possibilities for 3D\PHQWV&RXQFLO  D ZKHQEX\HUDQGVHOOHU consumers and corporate buyers to pay for products are both present, payment can be made using bought online. A distinction can be made between FRQWDFWOHVVUDGLRWHFKQRORJLHVVXFKDVQHDUƄHOG account-based payment systems, electronic currency FRPPXQLFDWLRQ E  PRELOH UHPRWH SD\PHQWV DUH V\VWHPVDQGRWKHUV\VWHPV 2(&'  initiated using mobile devices with the transactions Account-based payments systems: These allow carried out either over telecommunication SD\PHQW WKURXJK DQ H[LVWLQJ SHUVRQDOL]HG DFFRXQW networks (for example, the Global System for 6L[IRUPVRIVXFKV\VWHPVFDQEHQRWHG 0RELOH&RPPXQLFDWLRQV RUWKH,QWHUQHW • &UHGLW FDUGV 7KHVH DUH WKH GRPLQDQW IRUP RI • 2QOLQHEDQNLQJ&RQVXPHUVXVLQJWKLVIDFLOLW\DUH RQOLQHSD\PHQWLQGHYHORSHGFRXQWULHV redirected from a merchant’s webpage to the • 'HELWFDUGSD\PHQWV6XFKSD\PHQWVDUHGLUHFWO\ consumer’s own bank’s online banking site. ZLWKGUDZQIURPDEDQNDFFRXQW2QFHIXQGVKDYH Electronic currency systems: These allow payment EHHQZLWKGUDZQWKH\PD\EHKDUGHUWRUHIXQG as long as the payer has an adequate amount of • 0HGLDWLQJ V\VWHPV q(OHFWURQLF PRQH\r RU HOHFWURQLF FXUUHQF\ 7KLV W\SH KDV WZR IRUPV D  qHZDOOHWVr 3D\3DO LV RQH H[DPSOH RI PHGLDWLQJ smart card systems, which are mainly used to pay SD\PHQW VHUYLFHV (VKRSSHUV FDQ UHJLVWHU ZLWK VPDOODPRXQWVZLWKLQRUJDQL]DWLRQV IRUH[DPSOHIRU

)LJXUH},,,'LVWULEXWLRQRIVHFXUH,QWHUQHWVHUYHUVSHU}PLOOLRQSHRSOH

High income 827

World 160

Europe and Central Asia 42

Latin America and the Caribbean 40

Sub-Saharan Africa 7

(DVW$VLDDQGWKH3DFLƂF 6

Middle East and North Africa 3

Least developed countries 1

0 200 400 600 800 1000

Source: :RUOG%DQN VHHKWWSGDWDZRUOGEDQNRUJLQGLFDWRU,71(76(&53DFFHVVHG}-DQXDU\  Note: 5HJLRQVUHIHUWRGHYHORSLQJHFRQRPLHVRQO\q6HFXUHVHUYHUVrDUHVHUYHUVXVLQJHQFU\SWLRQWHFKQRORJ\LQ,QWHUQHWWUDQVDFWLRQV 36 INFORMATION ECONOMY REPORT 2015

SKRWRFRS\LQJ  E  RQOLQH FDVK V\VWHPV ZKLFK DUH $FFRUGLQJ WR :RUOG3D\ FDVK RQ GHOLYHU\ LV XVHG LQ software-only electronic money instruments based on almost half the value of e-commerce transactions in qVLJQHGPRQH\r7KH\XVXDOO\ZRUNYLDSUHSDLGFDUGV $IULFDDQGWKH0LGGOH(DVW WDEOH},,, 2WKHUVRXUFHV and arrangements differ. Digital currencies or crypto- SXWWKHVKDUHDVKLJKDVt}SHUFHQWLQWKH0LGGOH FXUUHQFLHVVXFKDV%LWFRLQDUHJDLQLQJWUDFWLRQ7KH\ (DVW In India, as well, such payments still account are not backed by Governments or central banks, nor IRUt}SHUFHQWRIDOORQOLQHWUDQVDFWLRQV Cash on OLQNHGWRUHDOZRUOGFXUUHQFLHV :RUOG3D\  delivery can be seen as a low risk option for consumers to enter e-commerce. However, it is a higher risk 2WKHUSD\PHQWV\VWHPVLQFOXGHIRUH[DPSOH 2(&'   DXWRPDWHG PHFKDQLVPV IRU ELOO SD\PHQWV RSWLRQ IRU SURGXFHUV 5HOLDQFH RQ FDVK RQ GHOLYHU\ online wallets, in which case the user must register can act as an inhibitor of e-commerce growth due to with a payment provider and upload money using a people not paying when the product is delivered and to the lag between product dispatch and payment.4 GHELWRUFUHGLWFDUGHVFURZVHUYLFHVZKHUHDWKLUG party intermediary is responsible for holding a buyer’s 0RELOHSD\PHQWVDFFRXQWHGIRURQO\}SHUFHQWRIWKH payment until the buyer receives and approves the YDOXHRIHFRPPHUFHSD\PHQWVDƄJXUH}IRUHFDVWWRULVH PHUFKDQGLVH DQG FDVKRQGHOLYHU\ ,Q WKH FDVH RI WR}SHUFHQWE\+RZHYHUWKH\DUHPRUHLPSRUWDQW %%WUDQVDFWLRQVHQWHUSULVHVDUHLQFUHDVLQJO\PRYLQJ LQ FRXQWULHV FKDUDFWHUL]HG E\ OLPLWHG ,QWHUQHW XVH EXW to electronic funds transfers. well-functioning mobile money systems. In several Credit cards still account for the lion’s share of retail African countries, mobile solutions represent the most HFRPPHUFHVHWWOHPHQWV :RUOG3D\ +RZHYHU viable infrastructure for e-services due to high degrees LWLVH[SHFWHGWKDWE\RWKHUSD\PHQWVZLOOPDNH RI ƄQDQFLDO H[FOXVLRQ OLPLWHG DYDLODELOLW\ RI Ƅ[HG OLQHV up for the majority of all retail e-commerce payments, FRVW RI Ƅ[HG OLQHV DQG FRVW RI WKH FDUG LQIUDVWUXFWXUH ZLWK qHZDOOHWVr VHW WR UHSUHVHQW PRUH WKDQ } SHU ,QQRSD\ ,Q.HQ\DIRUH[DPSOHRQOLQHSXUFKDVH FHQW RI WKH WRWDO 8VDJH SDWWHUQV YDU\ JUHDWO\ 0RVW SD\PHQWV IURP PRELOH SKRQHV DFFRXQWHG IRU } SHU developed countries rely on accounts-based systems. FHQW RI WRWDO HFRPPHUFH WUDQVDFWLRQ YDOXH LQ  ,Q 1RUWK $PHULFD DQG (XURSH FUHGLW FDUGV UHPDLQ :RUOG3D\ ,Q2FWREHUWKHYDOXHRIPRELOH the main method, followed by mediating systems SD\PHQWWUDQVDFWLRQVVWRRGDW}PLOOLRQDVFRPSDUHG 5 HZDOOHWV  WDEOH} ,,,  $PRQJ GHYHORSLQJ FRXQWULHV ZLWKRQO\}PLOOLRQIRUFDUGSD\PHQWV The success WKHUHLVVLJQLƄFDQWYDULDWLRQEXWFUHGLWFDUGVDFFRXQW of mobile money has led to the development of many for less than half. QHZSD\PHQWVHUYLFHV VHHFKDSWHU},9  Low levels of credit card usage in developing regions are related to limited ownership of such cards. In 7DEOH},,, (WUDQVDFWLRQVYDOXHE\SD\PHQWPHWKRGV OHVVWKDQ}SHUFHQWRISHRSOHDJHG\HDUV  E\UHJLRQ SHUFHQW and older had a credit card in Africa and South Asia, compared with almost half of that age group in high- Credit E- Direct Cash on Bank Other LQFRPHHFRQRPLHV WDEOH},,,  5HJLRQ cards wallets debit delivery transfer In view of the cash-based culture in many countries United States and 71 18 2 1 1 7 ZLWK D VLJQLƄFDQW QXPEHU RI XQEDQNHG SHRSOH Canada and limited experience with electronic payments, alternative payment systems have emerged. In Europe 59 13 5 5 8 11 %UD]LOIRUH[DPSOHRIƅLQHSD\PHQWIRUPVKDYHEHHQ Latin 47 10 4 8 13 18 America created by companies such as the online gaming GHYHORSHU 9RVWX which formed a partnership with Africa } SK\VLFDO SRLQWV IURP QHZVSDSHU NLRVNV WR and Middle 34 5 0 48 3 10 East F\EHUFDIHV WR VHOO FUHGLWV IRU WKHLU JDPHV q%ROHWR Asia %DQFDULRr qEDQN SD\PHQW VOLSr  LV DQRWKHU ZLGHO\ and 37 23 1 11 14 14 XVHGSD\PHQWVROXWLRQLQ%UD]LO,WDOORZVFXVWRPHUV Oceania to purchase goods online using a slip that customers World 57 17 2 5 7 12 can print from the website and pay by cash at a bank,  Source: :RUOG3D\   KHQFH HQDEOLQJ SD\PHQW RIƅLQH  0LFURSD\PHQW DQG Note: 0RELOHSD\PHQWVLQFOXGHGLQqRWKHUr small payments are also gaining traction in developing CHAPTER III : MEASURING THE E-COMMERCE READINESS OF COUNTRIES 37

countries. They are designed to suit services or the postal/parcel express network or seller’s FRQWHQW ZLWK ORZ XQLW YDOXHV 6ROXWLRQV OLNH 0&RLQ RZQGHOLYHU\QHWZRUN ODXQFKHG E\ 7,::(  =RQG RZQHG E\ H%D\  DQG • %X\HUJRHVWRSLFNXSSK\VLFDOSURGXFW7KLVLV %RNX DYDLODEOHLQPRUHWKDQFRXQWULHV FKDUJHWKH generally at the store the product was ordered payment to a user’s mobile phone bills. from or a nearby branch if ordered through a central retail website. Some retailers have 3. Delivery systems qORFNHUVr LQ FHUWDLQ ORFDWLRQV ZKHUH WKH EX\HU can go to pick up the merchandise. Sometimes 7KH VFRSH IRU HFRPPHUFH LV LQƅXHQFHG E\ WKH WKHLWHPLVGHOLYHUHGWRDSRVWRIƄFHSDUFHORIƄFH TXDOLW\ RI SURGXFW GHOLYHU\ 0DQ\ FRQVXPHUV WXUQ for pick up, either because there is no home to e-commerce because of the desirability of delivery available or the package requires a downloading digital products or the convenience VLJQDWXUH of receiving physical products at their homes. • %X\HU qJRHVr WR WKH VHUYLFH RUGHUHG 7KLV LV Weaknesses in the delivery infrastructure can seriously typically the case for online travel purchases hamper e-commerce, especially for goods. where buyers purchase an airline trip, car rental, )RXUJHQHUDOGHOLYHU\PRGHVFDQEHGLVWLQJXLVKHGIRU hotel accommodation or event tickets. %& 'LJLWDOGHOLYHU\FDQKDSSHQLQVHYHUDOZD\VLQVWDQW • 2QOLQHGHOLYHU\RIGLJLWDOSURGXFWVVXFKDVERRNV and permanent download to the user’s computer, YLGHRV PXVLF DQG FRPSXWHU VRIWZDUH )RU WKLV limited download (for example, a rental product type, the quality of the Internet connection is a such as a video that expires after a certain time), key factor. AQDQDO\VLVRISDQHOGDWDRYHU\HDUV streaming or cloud storage. The digital delivery IURPFRXQWULHVIRXQGEURDGEDQGSHQHWUDWLRQWR process is affected by the quality of a buyer’s be among the most important variables explaining Internet connection. In the case of small digital cross-national variability in e-retail spending products (for example, a song or a book), relatively .VKHWULHWDO  VORZ GRZQORDG VSHHGV PD\ VXIƄFH /DUJHU GLJLWDO • 'HOLYHU\ RI SK\VLFDO SURGXFW :KHQ D JRRG LV products, such as downloading or streaming videos, ordered it can be delivered to the buyer through require more bandwidth. The video streaming

7DEOH},,, 7\SHRIDFFRXQWVDQGSD\PHQWPHWKRGVE\UHJLRQVKDUHRISRSXODWLRQDJHGRUPRUH SHUFHQW

Electronic Mobile Mobile Account Checks Mobile payments phone phone Debit at a formal used to phone Credit used to used to used to 5HJLRQVJURXSV card make used to card ƂQDQFLDO make receive send institution payments pay bills payments money money

High income economies 61.4 89.5 33.4 55.2 ...... 49.8 Other economies East Asia and Oceania 34.5 54.9 1.7 6.1 1.3 1.2 1 6.6 Europe and Central Asia 36.4 44.9 3.7 7.8 3 2.7 2.5 16.2

Latin America and Caribbean 28.8 39.3 3.9 10.3 1.8 1.9 0.8 18.4

Middle East and North Africa 9.1 17.7 4.1 2.2 1 2.4 1.3 2.4

South Asia 7.2 33 6.6 1.6 2 1.9 0.8 1.6 Sub-Saharan Africa 15.5 24 3.3 4 3 14.6 11.2 2.9 World     2  2.2 

Source: *OREDO)LQDQFLDO,QFOXVLRQ'DWDEDVH Note: (OHFWURQLFSD\PHQWVUHIHUVWRWKHSHUFHQWDJHRIUHVSRQGHQWVZKRXVHGHOHFWURQLFSD\PHQWV SD\PHQWVWKDWRQHPDNHVRU WKDWDUHPDGHDXWRPDWLFDOO\LQFOXGLQJZLUHWUDQVIHUVRUSD\PHQWVPDGHRQOLQH LQWKHSDVWPRQWKVWRPDNHSD\PHQWVRQ bills or to buy things using money from their accounts. 38 INFORMATION ECONOMY REPORT 2015

VHUYLFH 1HWƅL[ TXDQWLƄHV WKH VSHHGV UHTXLUHG WR 7DEOH},,, 6SHHGVQHHGHGIRUYLGHRVWUHDPLQJ use its service.9 7KH\ UDQJH IURP  PHJDELWV SHU VHFRQG 0EV WKHPLQLPXPUHTXLUHGFRQQHFWLRQWR Speed Comment RI 0EVWKHUHFRPPHQGHGVSHHGIRUKLJKGHƄQLWLRQ 0EV economies (HD) quality. According to average download speeds Required broadband  0.5 100 FRPSLOHGE\2RNOD1HW,QGH[ all economies could connection speed support the minimum required broadband connection Recommended broadband 1.5 96 VSHHG ZKLOH } SHU FHQW FRXOG VXSSRUW +' TXDOLW\ connection speed WDEOH},,, ,QDGGLWLRQWRVSHHGODWHQF\LVDOVRFULWLFDO 3 Recommended for SD quality 86 It affects countries where streaming services are not 5 Recommended for HD quality 71 hosted locally and must be accessed over slower international links. Source: $GDSWHGIURP1HWƅL[1HW,QGH[ KWWSZZZQHWLQGH[ FRPGRZQORDGDOOFRXQWULHVDFFHVVHG}-DQXDU\  The postal system plays a key role in e-commerce Note: %DVHGRQGDWDIRUHFRQRPLHVZLWKEURDGEDQG logistics. It often remains the most cost-effective way VSHHGGDWDXVLQJƄJXUHVIURP0D\ to send parcels. In the past decade, the handling of parcels has become increasingly important for 7KH JUHDWHVW ƅH[LELOLW\ LQ GHOLYHU\ RI JRRGV LV WKH the postal system in terms of volume and revenue. ability to have them shipped to the buyer’s home. While the number of letters sent domestically and $FFRUGLQJWR838GDWDRYHU}SHUFHQWRIWKHSRS- LQWHUQDWLRQDOO\KDYHGHFOLQHGVLJQLƄFDQWO\SDUFHOWUDIƄF ulation in developed economies, transition econo- KDVVXUJHGE\PRUHWKDQ}SHUFHQWVLQFHSDUWO\ mies and Asia can receive parcels with home delivery GXHWRHFRPPHUFH ƄJXUH},,, ,Q/DWLQ$PHULFDDQG ƄJXUH},,, 11 ,Q$IULFDDQG2FHDQLDWKHFRUUHVSRQG- the Caribbean, and in developed countries, over one LQJƄJXUH}LVEHORZ}SHUFHQW$QRWKHURSWLRQLVWR third of the total revenues of posts were generated by KDYHSDUFHOVGHOLYHUHGWRDSRVWRIƄFHIURPZKHUHWKH SDUFHOSRVWLQ 838  EX\HUFDQWKHQUHWULHYHWKHP'DWDIURP838VKRZ

)LJXUH},,,/HWWHUDQGSDUFHOWUDIƂFKDQGOHGE\WKHSRVWDOV\VWHPt LQGH[ 

160

140

120

100

80

60

40

20

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Number of letters (domestic Number of parcels (domestic Number of letters (international Number of parcels (international

Source: 838 CHAPTER III : MEASURING THE E-COMMERCE READINESS OF COUNTRIES 39

WKDWPRVWRIWKHSRSXODWLRQLQ$IULFDDQG2FHDQLDUH- GHOLYHU\V\VWHPXVHGLQ9LHW1DP FKDSWHU,, 2XWRI WULHYHWKHLUPDLOIURPDSRVWRIƄFH2YHU}SHUFHQW home delivery – involving collection points, delivery of the population in those regions does not have ac- at work, parcel lockers and in-store pickup – is one cess to postal delivery or pickup. Across the world, option to increase the attractiveness of e-commerce RQO\DERXW}SHUFHQWRIWKHSRSXODWLRQODFNDFFHVV in developing countries. to postal services. 0DQ\SRVWDOV\VWHPVQHHGWREHFRPHPRUHHIƄFLHQW B. THE UNCTAD B2C and create products to meet the needs of e-commerce. E-COMMERCE INDEX Nevertheless, the postal network remains the most important national infrastructure for universal There are few benchmarks of country e-commerce access for urban dwellers and, more importantly, for performance. Those that exist suffer from a lack of consumers and producers located outside the urban public availability, scope or consistent methodology, areas. The reach of the national postal network in as well as limited geographical coverage.14 This most countries and its ability to connect to the wider VHFWLRQ SUHVHQWV WKH 81&7$' %& (FRPPHUFH international postal network makes it a cost effective Index, which is based on indicators related to the PHWKRGIRUFRQQHFWLQJDOOFLWL]HQVDQGEXVLQHVVHVWR IDFWRUV GLVFXVVHG DERYH WDEOH} ,,, ER[ ,,,  ,W  the global e-commerce economy. UHƅHFWV WKH XQGHUO\LQJ FDSDELOLW\ RI FRXQWULHV WR 3RRU ORJLVWLFDO LQIUDVWUXFWXUH UHPDLQV D SUREOHP FDUU\ RXW %& HFRPPHUFH ,W GRHV QRW FRQVLGHU for enterprises engaging in e-commerce in many exogenous factors such as income, digital literacy economies. While larger businesses, like the online and laws. While the legal and regulatory framework UHWDLOHU 2]RQUX may choose to build their own LQƅXHQFHVWKHGHJUHHRIWUXVWLQRQOLQHFRPPHUFLDO distribution networks, this option is out of reach for WUDQVDFWLRQV LW LV GLIƄFXOW WR DVVLJQ D UHOHYDQW micro and small businesses that may need to explore numerical value to its quality. This dimension is other innovative solutions, such as the motorbike therefore not included in the Index. However, the

)LJXUH},,,6KDUHRISRSXODWLRQVHUYLFHGE\GLIIHUHQWPRGHVRIPDLOGHOLYHU\E\UHJLRQ

Africa 14 36 51

America 7 80 14 Population without Asia 0 94 6 delivery

Oceania 14 26 60 Population with home delivery Developed 0 100 0 economies Population with PO box Transition delivery 0 98 2 economies

World 4 82 14

0% 50% 100%

Source: $GDSWHGIURP8383RVWDO6WDWLVWLFVGDWDEDVH Note: Geographical regions refer to developing countries only. 40 INFORMATION ECONOMY REPORT 2015

Box III.1. Methodology of the UNCTAD B2C E-commerce Index

7KHVHOHFWLRQRILQGLFDWRUVIRUWKH,QGH[ZDVPDGHLQVHYHUDOVWHSV)LUVWO\SUR[\LQGLFDWRUVZHUHDVVLJQHGWRWKH various components needed to carry out an e-commerce transaction, including payment and delivery. This includes access to the Internet by the consumer, a web presence to receive the order, a payment method and a delivery method. Secondly, statistical analysis was performed by regressing these indicators on the percentage of individuals ZKRKDYHPDGHDQRQOLQHSXUFKDVHIRUFRXQWULHVZKHUHVXFKGDWDZHUHDYDLODEOH,QGLFDWRUVZLWKWKHKLJKHVW VWDWLVWLFDOVLJQLƄFDQFHZHUHWKHQVHOHFWHGWRFUHDWHWKH,QGH[7KHVHLQGLFDWRUVDUHVKRZQLQWDEOH},,,7KHUHVXOWV RIWKHUHJUHVVLRQVKRZDJRRGƄWZLWKDFRHIƄFLHQWRIGHWHUPLQDWLRQRI$OOLQGLFDWRUVH[FHSWVHFXUHVHUYHUV DUHLQDQRUPDWLYHIRUPZKHUHLVWKHPD[LPXPYDOXH7KHGDWDRQVHFXUHVHUYHUVZHUHQRUPDOL]HGWR by rescaling the values.15 The values of the indicators were then averaged to obtain the Index value. The Index FRPSULVHV}HFRQRPLHVZLWKDOODYDLODEOHLQGLFDWRUVXVLQJGDWDIRU RUODWHVW\HDUDYDLODEOH 7KHIXOOOLVWRI countries is provided in annex 1. Source: UNCTAD.

extent to which countries have relevant laws in 7DEOH},,, ,QGLFDWRUVLQFOXGHGLQWKH81&7$' SODFHLVH[DPLQHGLQFKDSWHU}9 B2C E-commerce Index Several observations can be made about the highest- UDQNHG HFRQRPLHV WDEOH} ,,,  )LUVWO\ PRVW DUH Indicator 6RXUFHQRWH developed countries. Secondly, most are relatively Percentage of individuals ITU, Eurostat and national surveys, small and/or distant from major market centres. using Internet 2013, 216 economies Smaller physical retail markets appear to stimulate Credit card (% age 15+) :RUOG%DQN)LQGH[VXUYH\ RQOLQHVKRSSLQJLQFOXGLQJDVLJQLƄFDQWDPRXQWIURP 149 economies DEURDG7KHWRSUDQNHGGHYHORSLQJHFRQRPLHV Secure Internet servers :RUOG%DQNHFRQRPLHV LQWKH,QGH[DUHLGHQWLƄHGLQWDEOH},,,7KH\DUHDOO (per 1 million people) upper-middle and high-income economies, six of Percentage of the population 838HFRQRPLHV which are from Asia and the remaining four from having mail delivered at home Latin America. Source: UNCTAD.

7DEOH},,, 7RSFRXQWULHVLQWKH81&7$'%&(FRPPHUFH,QGH[

Share of population Share of Share of having mail Secure servers individuals with individuals UNCTAD B2C Economy delivered at home per 1 million people credit card using Internet E-commerce 5DQN RUODWHVW QRUPDOL]HG  RUODWHVW Index value SHUFHQW SHUFHQW SHUFHQW

/X[HPERXUJ 100 99 72 95 91.7 1 Norway 100 97 60 96 88.3 2 Finland 100 97 64 92 88.1 3 Canada 100 93 72 83 87.1 4 Sweden 100 96 54 95 86 5 Australia 100 95 64 83 85.5 6 Denmark 100 99 45 95 84.7 7 Republic of Korea 100 99 56 82 84.3 8 United Kingdom 100 94 52 91 84.2 9 Israel 100 82 80 73 83.9 10

Source: 81&7$'VHHDQQH[ CHAPTER III : MEASURING THE E-COMMERCE READINESS OF COUNTRIES 41

7DEOH},,, 7RSGHYHORSLQJHFRQRPLHVLQWKH81&7$'%&(FRPPHUFH,QGH[

Share of Share of Share of Secure population having individuals with individuals using servers per UNCTAD B2C mail delivered Economy credit card 1 million people E-commerce at home ,QWHUQHW  5DQN  or latest, QRUPDOL]HG Index value RUODWHVW SHUFHQW SHUFHQW  SHUFHQW Republic of Korea 100 56.4 82.1 98.6 84.3 8 Hong Kong (China) 99.99 58.1 74.2 89.2 80.4 18 Singapore 100 37.3 72 89 74.6 26 Bahrain 100 19.3 73 77.2 67.4 34 Turkey 97 45.1 46 68.9 64.2 38 Chile 94 22.8 61.4 73.9 63 39 Uruguay 92.8 27.1 58 72.1 62.5 40 Trinidad and Tobago 93 15.3 59.5 73.8 60.4 43 Malaysia 93 11.9 63.6 71.1 59.9 45 Brazil 80.7 29.2 58 69.9 59.5 47 Source: 81&7$'VHHDQQH[

7DEOH} ,,, VKRZV WKH LQGLFDWRU YDOXHV IRU WKH GDWD suggesting that globally, payment is the one area set. In general, rates of population covered by postal meriting the most attention. services and secure Internet servers are higher than The Index allows countries to compare their individual access to the Internet and to credit cards. e-commerce readiness with that of others and also )XUWKHUPRUHLQWKHFDVHRI,QWHUQHWXVHDQGVHFXUH indicates their relative strength and weaknesses VHUYHUVWKHPHGLDQVDUHIDLUO\FORVHWRWKHPHDQV2Q with regard to different elements of the e-commerce WKHRWKHUKDQGWKHVLJQLƄFDQWGLIIHUHQFHEHWZHHQWKH process (for example, Internet access, e-commerce median and mean for postal delivery highlights that sites, payment, and delivery). At the regional level, there ZKLOHRYHUKDOIWKHFRXQWULHVFRYHUPRUHWKDQ}SHU is considerable variation among the four indicators cent of their population with home postal services, WDEOH},,, )RUH[DPSOHWUDQVLWLRQHFRQRPLHVGLVSOD\ around a third provide coverage to less than half a relatively high degree of home postal delivery, their population. In the case of credit card use, only whereas credit card penetration is low compared with FRXQWULHVKDYHDSHQHWUDWLRQRIPRUHWKDQ}SHU WKH GHYHORSLQJ UHJLRQV H[FHSW $IULFD  2Q WKH RWKHU FHQWDQGLQFRXQWULHVSHQHWUDWLRQLVEHORZ}SHU hand, in Latin America and the Caribbean, and in Asia cent. Credit card penetration has the lowest average DQG2FHDQLDLPSURYLQJWKHFRYHUDJHRISRVWDOKRPH and maximum scores across the four indicators, delivery appears to be particularly important. In Africa, performance is hampered by low overall Internet 7DEOH},,, *OREDOYDOXHVIRUWKH81&7$'%& penetration levels compared with other regions. E-commerce Index 7KH81&7$'%&(FRPPHUFH,QGH[YDOXHLVVWURQJO\ positively correlated to the variation in the share of Home postal Credit Internet Secure LQGLYLGXDOV VKRSSLQJ RQOLQH ƄJXUH} ,,,  7KLV VKDUH delivery card use servers can also be contrasted with that predicted by the RI DJHG RI QRUPDOL]HG Index. This was done by regressing the independent population  SRSXODWLRQ YDOXH FRYHUHG variables (that is, postal delivery coverage, credit card Average 69 18 44 63 penetration, Internet penetration and secure servers Minimum 001 11per capita) against the percentage of the population that shop online for the countries for which data are 0D[LPXP 100 80 96 100 DYDLODEOH7KHUHVXOWLQJHTXDWLRQFRHIƄFLHQWVZHUHWKHQ Median 93 10 45 64 applied to the independent variables for all countries. Source: UNCTAD. $VLQGLFDWHGLQWDEOH},,,UHODWLYHO\ODUJHFRXQWULHVWHQG 42 INFORMATION ECONOMY REPORT 2015

7DEOH},,, 5HJLRQDODYHUDJHYDOXHVLQWKH81&7$'%&(FRPPHUFH,QGH[

Share of population Share of indi- Share of individuals having mail Secure servers per UNCTAD B2C viduals with credit using Internet delivered at home 1 million people E-commerce FDUG  RUODWHVW RUODWHVW QRUPDOL]HG Index value SHUFHQW SHUFHQW SHUFHQW

Africa 27 4 13 43 22

Asia and Oceania 60 14 34 57 41

Latin America and the Caribbean 70 12 44 67 48

Transition economies 94 9 45 59 52

Developed economies 98 42 79 90 77

Source: UNCTAD. Note: Includes all countries for which data for any indicator is available. to perform above the expected level. This may partly EX\HUVDVRI-XQH2QWKHRWKHUKDQGWKRVH UHƅHFWEHQHƄWVIURPHFRQRPLHVRIVFDOHDQGVFRSHDW not performing as well as expected tend to be located the domestic level, partly the role of well-developed LQ &HQWUDO (XURSH 1RUWK $IULFD DQG /DWLQ $PHULFD ORFDOL]HG RQOLQH VKRSSLQJ VLWHV VXFK DV 8OPDUW LQ 6FRULQJDPRQJWKHERWWRPHFRQRPLHVLQWDEOH},,, 5XVVLDZLWKDURXQG}ELOOLRQLQRQOLQHVDOHVLQ indicates considerable potential for increasing the DQG &KLQDpV $OLEDED *URXS ZLWK } PLOOLRQ DFWLYH uptake of e-commerce.

)LJXUH},,, &RUUHODWLRQEHWZHHQWKH81&7$'%&(FRPPHUFH,QGH[DQGWKHVKDUHRILQGLYLGXDOVVKRSSLQJRQOLQH

100 y = 0.0669e0.0785x R² = 0.7161 90

80 United Kingdom 70 Germany 60

50 Brazil 40 Russian Federation 30

Individuals purchasing online (% China 20 Qatar 10

0 0 102030405060708090100

UNCTAD B2C E-commerce Index

Source: UNCTAD. CHAPTER III : MEASURING THE E-COMMERCE READINESS OF COUNTRIES 43

7DEOH},,, 7RSDQGERWWRPFRXQWULHVE\GLIIHUHQFHEHWZHHQSUHGLFWHGDQGDFWXDOVKDUHRISRSXODWLRQEX\LQJ  RQOLQH

7RS %RWWRP 2QOLQHEX\HUVDVDVKDUHRISRSXODWLRQ  2QOLQHEX\HUVDVDVKDUHRISRSXODWLRQ  Actual Absolute Actual Absolute Economy 3UHGLFWHG  Economy 3UHGLFWHG  value value difference difference value value difference difference 1 Thailand 0.38 1.8 1.42 380 Armenia 6.9 0.5 -6.4 -92 2 China 6 20 15 262 Ecuador 2 0.2 -1.7 -88 Russian 3 92112130 Georgia 7.4 1 -6.4 -87 Federation 4 Belarus 4.5 7.9 3.4 75 Egypt 4.1 0.6 -3.5 -85 5 United Kingdom 46 71 25 56 Argentina 11.5 2.8 -8.7 -76 6 Germany 39 60 21 54 0H[LFR 6.2 1.8 -4.4 -71 7 France 30 44 14 46 Morocco 5.8 2.1 -3.7 -64 8 South Africa 2.2 3.1 0.9 42 Uruguay 14.2 5.2 -9 -63 The former Yugoslav 9 Brazil 14 19 5 39 13.5 5.4 -8.1 -60 Republic of Macedonia 10 Australia 47 63 16 35 Colombia 6.4 2.6 -3.8 -60

Source: UNCTAD. Note: 7KHSUHGLFWHGYDOXHLVFDOFXODWHGXVLQJWKHFRHIƄFLHQWVJHQHUDWHGE\UHJUHVVLQJSRVWDOGHOLYHU\FRYHUDJHFUHGLWFDUGSHQHWUDWLRQ Internet penetration and secure servers per capita against the percentage of the population that shops online.

C. CONCLUDING become a less important determinant when alternative REMARKS payment solutions gain traction. This will partly hinge on how successful Governments are in fostering an 7KH 81&7$' %& (FRPPHUFH ,QGH[ ZKLFK ZLOO enabling environment for such payments. be updated annually, can serve as a useful tool for )RUPRVWGHYHORSLQJFRXQWULHVDUHDVIRULPSURYLQJ countries wishing to assess their readiness to engage e-commerce usage include enhancing parcel delivery successfully in online commerce. It allows countries and payment mechanisms, particularly when Internet not only to compare their performance against others penetration has reached a certain threshold. In the but also indicates where they are relatively strong and case of sales of physical goods, a lack of postal where there may be a need for improvement. home delivery can represent a barrier to the uptake The analysis suggests that the highest-ranked of e-commerce, although other methods, such as economies are relatively small, rich and often located SLFNLQJXSRUGHUVDWWKHSRVWRIƄFHRUVKRSVDUH DWVRPHGLVWDQFHIURPPDMRUPDUNHWV0HDQZKLOHLQ also expanding. This gap is spurring alternatives terms of actual levels of online shopping, countries for home delivery such as courier services either with relatively large populations – such as China, the provided by online vendors or generic services 5XVVLDQ)HGHUDWLRQDQG%UD]LOtDUHDPRQJWKRVHWKDW competing with the traditional postal services. are performing better than what would be predicted )RUWKHGHOLYHU\RIPHUFKDQGLVHERXJKWRQOLQHDQ by the Index. This may suggest that a certain scale is important issue is cost-effective accessibility for helpful for e-commerce success, as is the presence of the entire population. The proliferation of private, ORFDOL]HGHFRPPHUFHSODWIRUPV proprietary, closed-delivery networks, whilst initially Globally, credit card penetration has the lowest providing a catalyst for e-commerce growth, also average value among the four indicators in the Index. introduces limitations of scale for universal access, 0RVWUHWDLOHFRPPHUFHSD\PHQWVDUHVWLOOPDGHYLD especially for underserved communities. This is credit card but the role of other methods is forecast to where a national infrastructure, such as the postal expand in the future. As a result, credit card use may network, is particularly important. 44 INFORMATION ECONOMY REPORT 2015

NOTES

1 q+RZPDQ\HFRPPHUFHFRPSDQLHVDUHWKHUH"rThe Data Point-XQHDYDLODEOHDWKWWSEORJUMPHWULFV FRPKRZPDQ\HFRPPHUFHFRPSDQLHVDUHWKHUH DFFHVVHG}-DQXDU\ 

 6HH q3D\3DO ,QVLJKWV HFRPPHUFH UHSRUW UHYHDOV WUHQGV LQ PRELOH WUDYHO LQ WKH 0LGGOH (DVWr wamda.com, } 6HSWHPEHU  DYDLODEOH DW KWWSZZZZDPGDFRPSD\SDOHFRPPHUFHUHSRUWPLGGOHHDVW DFFHVVHG}-DQXDU\ DQGq&RXQWLQJRQFDVKRQGHOLYHU\rkippreport6HSWHPEHUDYDLODEOHDWKWWS ZZZNLSSUHSRUWFRPIFVFRXQWLQJRQFDVKRQGHOLYHU\ DFFHVVHG}-DQXDU\ 

 )RUWKHODUJHUqHUHWDLOHUVrLQ,QGLDWKLVSD\PHQWPHWKRGLVDYDLODEOHLQFLWLHVDQGWRZQVDQGKDVKHOSHG PHUFKDQWV DFTXLUH ƄUVWWLPH FXVWRPHUV VHH q&DVKRQGHOLYHU\ 1HFHVVDU\ HYLOr businesstoday } )HEUXDU\  DYDLODEOH DW KWWSEXVLQHVVWRGD\LQWRGD\LQVWRU\FDVKRQGHOLYHU\LPSDFWRQHFRPPHUFHFRPSDQLHV FXVWRPHUVKWPO DFFHVVHG}-DQXDU\ 

4 6HH q&DVK RQ GHOLYHU\ WKH ELJJHVW REVWDFOH WR HFRPPHUFH LQ 8$( DQG UHJLRQr The National  0D\}  DYDLODEOH DW KWWSZZZWKHQDWLRQDODHEORJVSOXJJHGLQFDVKRQGHOLYHU\WKHELJJHVWREVWDFOHWRHFRPPHUFH LQXDHDQGUHJLRQ DFFHVVHG}-DQXDU\ 

5 6HHq8VHRISODVWLFPRQH\VXUJHVWR}PLOOLRQrStandardmedia.co.ke}'HFHPEHUDYDLODEOHDWKWWS ZZZVWDQGDUGPHGLDFRNHEXVLQHVVDUWLFOHXVHRISODVWLFPRQH\VXUJHVWRPLOOLRQ DFFHVVHG }-DQXDU\ 

 2YHU}PLOOLRQUHJLVWHUHGXVHUV9RVWXIRXQGHGLQLVWKHODUJHVWJDPLQJFRPSDQ\LQ/DWLQ$PHULFDVHH KWWSZZZYRVWXFRPHVYRVWX DFFHVVHG$XJXVW 

 6HH KWWSWKHQH[WZHEFRPODKRZHFRPPHUFHLVJURZLQJLQEUD]LOFRPPHQWV DFFHVVHG } -XQH  

 )RUPRUHRQTXDOLW\RIEURDGEDQGQHWZRUNVVHH81&7$' E 

9 6HH KWWSVKHOSQHWƅL[FRPHQQRGH DFFHVVHG } -DQXDU\   1HWƅL[ DOVR FRPSLOHV D VSHHG LQGH[ RI ,QWHUQHWVHUYLFHSURYLGHUVIRUWKHFRXQWULHVLWRSHUDWHVLQVHHKWWSLVSVSHHGLQGH[QHWƅL[FRP DFFHVVHG}-DQXDU\  

 6HHKWWSZZZQHWLQGH[FRPGRZQORDGDOOFRXQWULHV DFFHVVHG}-DQXDU\ 

11 In Denmark, for example, the main delivery choice among online shoppers is having packages delivered to the KRPHE\WKHQDWLRQDOSRVWDODJHQF\ UHSRUWHGE\DOPRVWKDOIRIRQOLQHVKRSSHUV DQGDQRWKHUSHUFHQWSLFNHGXS WKHLUSDUFHOVDWWKHSRVWDORIƄFH )',+ 

 6HH IRU H[DPSOH TXRWH E\ WKH &KLHI ([HFXWLYH 2IƄFHU RI .RQJDFRP DW WKH 838 (FRPPHUFH )RUXP  DYDLODEOHDWKWWSVZZZ\RXWXEHFRPZDWFK"Y S9,B-37F DFFHVVHG}-DQXDU\ 

 2SHQHGLQDQGRQHRIWKHƄUVW5XVVLDQHFRPPHUFHSURMHFWVLQWKH%&VHJPHQWVHHKWWSZZZR]RQUX FRQWH[WGHWDLOLG DFFHVVHG-XQH 2]RQUXKDVHVWDEOLVKHGSLFNXSSRLQWVLQ}FLWLHVDQG SODQVWRHVWDEOLVKDQRWKHUE\,WKDVEXLOWDVHFRQGVTXDUHPHWUHZDUHKRXVHLQ

14 )RU H[DPSOH .HDUQH\pV*OREDO 5HWDLO %& (FRPPHUFH ,QGH[ FRYHUV  HFRQRPLHV .HDUQH\   DQG WKH )RUUHVWHU5HDGLQHVV,QGH[H&RPPHUFHFRYHUVFRXQWULHV )RUUHVWHU 

15 7KHQRUPDOL]DWLRQZDVGRQHXVLQJWKHIROORZLQJHTXDWLRQORJ [ ŸORJ PLQ [ ORJ PD[ [ ŸORJ PLQ [ 

 Some extraneous factors, such as digital laws and income, were also analysed for their impact on online shopping EHKDYLRXUEXWZHUHIRXQGWRKDYHOLWWOHVWDWLVWLFDOVLJQLƄFDQFH

 6HH KWWSZZZWHOHJUDSKFRXNƄQDQFHQHZVE\VHFWRUUHWDLODQGFRQVXPHU5XVVLDVELJJHVWLQWHUQHW FRPSDQ\H\HV/RQGRQ,32KWPO DFFHVVHG}-DQXDU\ 

 6HHKWWSZZZDOLEDEDJURXSFRPHQLUƄQDQFLDO DFFHVVHG}-DQXDU\  E-COMMERCE BY SMALL AND RURAL 4 ENTERPRISES IN DEVELOPING COUNTRIES

Micro and small enterprises in most countries tend to lag behind their larger counterparts in online buying and selling (chapter II). Rural enterprises similarly trail behind their urban competitors, for various reasons. This chapter looks at different options for micro and small businesses to engage in e-commerce, making use of emerging platforms and solutions. It then considers the case of rural e-commerce by comparing the diverse experience of three countries in Asia. 46 INFORMATION ECONOMY REPORT 2015

A. OPTIONS FOR 1. Using existing online marketplaces MICRO AND SMALL A growing number of third-party marketplaces are ENTERPRISES available for the marketing and sale of products TO ENGAGE IN online. Some provide the full range of services – E-COMMERCE payment processing, customer service, shipping, return processing and delivery – while others act as an 0LFUR DQG VPDOO HQWHUSULVHV IDFH YDULRXV EDUULHUV WR online forum for buyers and sellers to meet. In China, the adoption of e-commerce, such as lack of skills -'FRP LUMGFRP WKHODUJHVW%&PDUNHWSODFHLQWKDW in identifying their e-commerce needs and potential country, offers payment processing, customer service, EHQHƄWV DQG KRZ WR HQJDJH LQ LW 6DQGEHUJ DQG shipping and return using its own nationwide logistics +ÂNDQVVRQ   $W WKH VDPH WLPH RSWLRQV DUH LQIUDVWUXFWXUHIRURUGHUIXOƄOPHQW.%\FRQWUDVWWKHPRVW expanding for them to gain an online presence that can YLVLWHG HFRPPHUFH VLWH LQ .HQ\D 2/; RO[FRNH  be used to market their goods and services to potential allows sellers to post advertisements to reach potential buyers. Traditional obstacles related to the need for buyers, but does not facilitate transactions between having in-house resources, IT equipment and expertise them.1 In countries with expanding e-commerce to establish and maintain a web presence have been markets, domestic and international platform providers lowered with the introduction of new platforms and DUHFRPSHWLQJKHDGWRKHDG ER[,9  solutions. In the following sections, different options for 7KHSULPDU\IRFXVRIWKHPDUNHWSODFHEHLW%% ER[ creating an online presence and for handling payments ,9 %&RU&&DIIHFWVWKHNLQGRIFXVWRPHUVWKDW DQG RUGHU IXOƄOPHQW DUH GLVFXVVHG DQG HYDOXDWHG $V the seller might reach and the set of features that will be shown, in many developing countries small DUHDYDLODEOH%RWK%&DQG&&PDUNHWSODFHVPD\ businesses still face barriers when wanting to leverage be relevant when targeting the consumer segment. some international e-commerce platforms and solutions. 0RVW %& SODWIRUPV UHTXLUH VHOOHUV WR EH D IRUPDO

%R[,9 3ODWIRUPFRPSHWLWLRQLQWKH3KLOLSSLQHV

7KH3KLOLSSLQHVERDVWVDUDSLGO\H[SDQGLQJPDUNHWIRUHFRPPHUFHZLWKRQOLQHWUDQVDFWLRQVFXUUHQWO\YDOXHGDWDERXW }ELOOLRQa This has led both local and international platform providers to offer innovative e-commerce solutions to small businesses.

$PRQJGRPHVWLF&&ZHEVLWHVVXOLWFRPSKLVRQHRIWKHPRVWSRSXODUZLWK}PLOOLRQYLVLWRUVDVRI0DUFKb It was IRXQGHGDVDJHQHUDOFODVVLƄHGDGYHUWLVHPHQWVZHEVLWHLQ6HSWHPEHU$IWHUDYHQWXUHLQWRYHUWLFDOPDUNHWVVXFKDV FDUVVXOLWFRPSKDQGUHDOHVWDWHVXOLWFRPSKLWPHUJHGZLWKWKH2/;QHWZRUNLQ$QRWKHUGRPHVWLFSODWIRUP8QLTO\ XQLTO\QHW RIIHUVDFRPSOHWHHFRPPHUFHVROXWLRQDJDLQVWD}SHUFHQWFRPPLVVLRQRQWUDQVDFWLRQV,WDOORZVFXVWRPHUV to create an online store across multiple platforms and helps them manage products, orders and payments via credit FDUG3D\3DORUEDQNGHSRVLW7KHFRPSDQ\DOVRKHOSVZLWKRUGHUIXOƄOPHQW,WKDVSDUWQHUHGZLWKDGHOLYHU\FRPSDQ\WR ship products from the merchant to the customer. Uniqly also integrates with various social media websites.

$PRQJWKHIRUHLJQSURYLGHUVH%D\KDVEHHQLQWKH3KLOLSSLQHVVLQFHDQGKDVH[SDQGHGE\ODXQFKLQJWKHJURXS EX\LQJGLVFRXQWVLWH.XSRQDQ$OL([SUHVVZKLFKLVSDUWRIWKH$OLEDED*URXSLVOHYHUDJLQJLWVJOREDOSODWIRUPWRDOORZ 3KLOLSSLQHVKRSSHUVWRSXUFKDVHSURGXFWVGLUHFWO\IURP&KLQD2QWKHVXSSO\VLGHLWKDVPRUHWKDQVHOOHUVLQWKH 3KLOLSSLQHVLWVHOI/D]DGDFRPSKDQRWKHUPDMRURQOLQHUHWDLOHULVRZQHGE\5RFNHW,QWHUQHW *HUPDQ\ $UHFHQWHQWU\LQ WKH3KLOLSSLQHVLV6LQJDSRUHEDVHGVWDUWXS7DFN7KLV WDFNWKLVFRPSK  &RPSHWLWLRQDPRQJWKHSODWIRUPSURYLGHUVEHQHƄWVLQGLYLGXDOVDQGVPDOOEXVLQHVVHV%HFDXVHPRVWSURYLGHUVRSHUDWH on an advertising or commission basis, online merchants can use several simultaneously. Hence, there is an opportunity to establish a presence on a global platform to reach customers overseas while using a domestic provider to target local GHPDQG0DQ\FRPSDQLHVDOVRHVWDEOLVKWKHLURZQZHEVLWHVWRVXSSOHPHQWWKHLUVRFLDOPHGLDDQGSODWIRUPSUHVHQFH Source: UNCTAD. a q,VLWWLPHWREHEXOOLVKRQHFRPPHUFHLQWKH3KLOLSSLQHV"r+XIƄQJWRQ3RVW2FWREHUDYDLODEOHDWKWWSZZZ KXIƄQJWRQSRVWFRPMRQKDUHYHVHQFLRLVLWWLPHWREHEXOOLVKBEBKWPO DFFHVVHG}-DQXDU\  b 6HHqSRSXODUHFRPPHUFHVLWHVLQWKH3KLOLSSLQHVrTechinAsia}-XO\DYDLODEOHDWKWWSZZZWHFKLQDVLD FRPSRSXODUHFRPPHUFHVLWHVSKLOLSSLQHV DFFHVVHG}-DQXDU\  CHAPTER IV : E-COMMERCE BY SMALL AND RURAL ENTERPRISES IN DEVELOPING COUNTRIES 47

%R[,9 %%RQOLQHPDUNHWSODFHVtRSSRUWXQLWLHVIRUPLFURDQGVPDOOHQWHUSULVHVWRSDUWLFLSDWHLQ international supply chains

2QOLQH%%PDUNHWSODFHVFDQSURYLGHRSSRUWXQLWLHVIRUVXSSOLHUVLQGHYHORSLQJFRXQWULHVWRDFFHVVWKHH[SRUWPDUNHW DQGLQWHUQDWLRQDOVXSSO\FKDLQV([DPSOHVRIGHGLFDWHG%%VLWHVLQFOXGH,QGLDpVODUJHVWRQOLQH%%PDUNHWSODFHIRUVPDOO DQGPHGLXPVL]HGEXVLQHVVHV,QGLD0DUWFRPa(&FRPtD%%PDUNHWSODFHRIWKH5HSXEOLFRI.RUHDZLWK}PLOOLRQ PHPEHUVbDQG.HQ\DWUDGHNH\FRPZLWKUHJLVWHUHGPHPEHUVc Alibaba.com (China), provides a range of services to facilitate sourcing Chinese products from overseas. Source: UNCTAD. a 6HHKWWSZZZLQGLDPDUWFRPFRUSRUDWHDERXWXVKWPO DFFHVVHG-XO\  b 6HHKWWSZZZHFFRPKWPOHFKHOSKHOSBKWPO DFFHVVHG-XQH  c 6HHKWWSNHQ\DWUDGHNH\FRP DFFHVVHG-XO\ 

UHJLVWHUHGHQWHUSULVHZKLOH&&PDUNHWSODFHVGRQRW $IULFDQFRXQWULHV ER[,, 7KHKRUL]RQWDOFODVVLƄHG )RUH[DPSOHRQO\UHJLVWHUHGHQWHUSULVHVDUHDOORZHG SRUWDO (QYDWRFRP $XVWUDOLD  PHDQZKLOH PDUNHWV WR VHOO RQ WKH ,QGLDEDVHG %& RQOLQH PDUNHWSODFHV digital products such as website themes, templates, )OLSNDUWFRP and Snapdeal.com. %\ FRQWUDVW photos, music and videos. RQ H%D\LQ D && RQOLQH PDUNHWSODFH  WKHUH LV QR 3ODWIRUPV VXFK DV )UHHODQFHUFRP DQG (ODQFHFRP VXFK UHTXLUHPHQW )RU LQIRUPDO PLFURHQWHUSULVHV LQ provide opportunities for professionals in developing GHYHORSLQJ FRXQWULHV WKH && RSWLRQ PD\ EH PRUH countries to provide professional services online to UHOHYDQW$WWKHVDPHWLPHXVLQJD&&SODWIRUPPD\ FXVWRPHUV DURXQG WKH ZRUOG (ODQFHFRP KDV PRUH involve higher risks, due to the physical separation WKDQ } PLOOLRQ qHODQFHUVr LQ RYHU  FRXQWULHV11 DQGXQFHUWDLQW\DERXWVHOOHUVpSURƄOHV ;XHWDO  $V RI  WKH KLJKHVW QXPEHU RI SURIHVVLRQDO VNLOO The geographical focus of the marketplace is providers on this platform came from the United States important. International online marketplaces may  ,QGLD  3DNLVWDQ  DQGWKH be open to international sellers only, to international 3KLOLSSLQHV   Among LDCs the platform had, EX\HUVRQO\RUWRERWK)RUH[DPSOH$OLH[SUHVVFRP for example, 95 freelancers active in Afghanistan and  ER[ ,,  HQDEOHV VHOOHUV RQO\ IURP PDLQODQG &KLQD4  LQ 5ZDQGD Such platforms also create new WR VHOO JRRGV WR EX\HUV DEURDG PRVWO\ LQ %UD]LO opportunities for women entrepreneurs to engage in &KLQD,QGLDWKH5XVVLDQ)HGHUDWLRQDQGWKH8QLWHG HFRPPHUFH ER[},9  States.5%\FRQWUDVW(WV\FRP an international online marketplace for handmade and vintage goods, is %R[,9 )UHHODQFHRSSRUWXQLWLHVIRUZRPHQ open to both international buyers and sellers.As will entrepreneurs be discussed in the next section, however, merchants After having completed her studies in secretarial skills in developing countries are not always able to sell their DQG ODQJXDJH 0HOORQLH 0XNLOLPD ZRUNHG D IHZ \HDUV products on international e-commerce platforms. Some LQDFDOOFHQWUHLQ.HQ\D:RUNLQJKRXUVZHUHORQJWKH PDUNHWSODFHVFDWHUWRUHJLRQDOEX\HUV)RUH[DPSOH work was demanding and provided minimal pay. She 0HUFDGR/LEUH LV WKH ODUJHVW RQOLQH PDUNHWSODFH LQ learned about freelancing through online platforms and /DWLQ$PHULFDRSHUDWLQJLQ}FRXQWULHVLQWKDWUHJLRQ eventually joined oDesk. She posted her résumé and, ER[ ,,  0HDQZKLOH RWKHUV FDWHU SULPDULO\ WR WKH DIWHUVRPHWLPHVKHDFTXLUHGKHUƄUVWFOLHQW6KHKDV GRPHVWLF PDUNHW $V PXFK DV } SHU FHQW RI WKH QRZGHYHORSHGDVLJQLƄFDQWFOLHQWEDVH$VDIUHHODQFHU WUDIƄFRI7DREDRFRPFRPHVIURP&KLQDIRUH[DPSOH VKHKDVFRPSOHWHGPRUHWKDQRQOLQHMREVUDQJLQJ IURPWUDQVFULSWLRQWRFOHDQLQJHPDLOER[HVWR)DFHERRN DQG}SHUFHQWRIYLVLWRUVWR/DPRGDUXDUHIURPWKH support and management, primarily for clients in 5XVVLDQ)HGHUDWLRQ)RUGRPHVWLFSURGXFHUVVRPH developed countries. Through these jobs, she has been Governments support national postal operators to able to apply her skills, develop new skills and expand 9 offer e-commerce platforms for local producers. her connections and knowledge. At the same time, she 2QOLQHPDUNHWSODFHVRIWHQVSHFLDOL]HLQFHUWDLQW\SHVRI works fewer hours but earns substantially more than products, such as physical goods, digital products or when she was working in a local call centre. ,&7HQDEOHGVHUYLFHV)RULQVWDQFH&KHNLLVDqYHUWLFDO Source: 81&7$' D  FODVVLƄHGVr SRUWDO IRU FDU OLVWLQJV ZLWK D SUHVHQFH LQ 48 INFORMATION ECONOMY REPORT 2015

There are several advantages associated with the )LUVW WKH SRVVLELOLW\ RI UHJLVWHULQJ DV D VHOOHU LV XVHRIRQOLQHPDUNHWV)LUVWLWFDQSURYLGHDFFHVVWR DYDLODEOH RQO\ LQ WKRVH  FRXQWULHV LQ ZKLFK EDQN a pool of potential buyers, saving the seller the costs DFFRXQWVDUHVXSSRUWHGE\$PD]RQ India is the only DQG H[SHUWLVH UHTXLUHG WR EXLOG XS WUDIƄF 6HFRQG developing country included in this category. Second, ZHOONQRZQRQOLQHPDUNHWSODFHV HVSHFLDOO\%& WHQG qVHOOHURUGHUVFDQRQO\EHSODFHGLIWKHEX\HULVLQD to offer consumer trust, marketing and infrastructure. VXSSRUWHG FRXQWU\r &XUUHQWO\  8QLWHG 1DWLRQV Third, the cost and technical requirements for 0HPEHU6WDWHVDUHVXSSRUWHG,QWKHUHVWRIWKHZRUOG VHWWLQJ XS D VWRUH RQOLQH DUH ORZ )LQDOO\DVVLVWDQFH FRQVXPHUV FDQQRW XVH $PD]RQ VLWHV WR EX\ LWHPV ZLWK SD\PHQW SURFHVVLQJ RUGHU IXOƄOPHQW KRVWLQJ Third, buyers outside the United States are not able customer service and marketing may help sellers to purchase certain items, including video games, overcome time and skill constraints. HOHFWURQLFVFDPHUDVDQGSKRWRLWHPV VHHWDEOH},9  3RWHQWLDO GLVDGYDQWDJHV LQFOXGH WKDW WKH VHOOHU LV (b) The case of eBay.com FRQƄQHG WR WKH IXQFWLRQDOLWLHV SD\PHQW RSWLRQV geographical limitations and design templates H%D\FRPLVWKHWKLUGODUJHVWHFRPPHUFHVLWHLQWKH DYDLODEOH6HFRQGLWPD\EHGLIƄFXOWWRVHFXUHHIIHFWLYH ZRUOGLQWHUPVRIJURVVPHUFKDQGLVHYDOXH FKDSWHU},,  integration with an enterprise’s inventory management and one of the world’s leading online auction sites, software and system. Third, the enterprise’s products on which individuals and enterprises can buy and sell ZLOOEHVKRZFDVHGQH[WWRWKRVHRIFRPSHWLWRUV)LQDOO\ YDULRXV QHZ DQG XVHG LWHPV H%D\ FDQ LQ SULQFLSOH the enterprise has to conform to the existing policy be used by small enterprises to access international of the online marketplace that may not be consistent markets. The full service spectrum offered includes with the enterprise’s own policy. bidding, buying, selling and support services of shipping, language translation services and data 2. Access barriers to international analytic tools. e-commerce platforms 7DEOH},9 $FFHVVWRGLIIHUHQW$PD]RQVHUYLFHV International e-commerce platforms are used by a Service growing number of small enterprises to market and No. of Notes RIIHUHG countries sell various products. They can facilitate access to limitations LQWHUQDWLRQDOPDUNHWVFDUU\RXWWUDGLQJDQGRUJDQL]H Seller registration 23 Australia, Canada, India, VKLSSLQJDQGƄQDQFLDOWUDQVDFWLRQVZLWKLQDQGEH\RQG is supported New Zealand, United national borders. However, as illustrated below with Kingdom, United States. Eurozone countries: Austria, WKHFDVHVRI$PD]RQFRPDQGH%D\FRPPHUFKDQWV Belgium, Cyprus, Estonia, in developing countries may face restrictions when Finland, France, Germany, wishing to make use of these services. Greece, Ireland, Italy, /X[HPERXUJ0DOWD the Netherlands, Portugal, (a) The case of Amazon.com Slovakia, Slovenia and Spain.

$PD]RQFRP LV WKH ZRUOGpV ODUJHVW HFRPPHUFH Supported coun- 50 .. FRPSDQ\E\RQOLQHUHYHQXH FKDSWHU,, 6LQFH tries from which to buy it is possible for third-party sellers to post products RQ WKLV SODWIRUP LQ PRUH WKDQ  FDWHJRULHV IURP Items buyers Video games, toy and baby books to garden products.14 outside of the items, electronics, cameras %\PLGPRUHWKDQ United States are and photo items, tools and } PLOOLRQ WKLUGSDUW\ VHOOHUV KDG SDUWLFLSDWHG LQ LW15 not allowed to buy hardware, kitchenware and $PD]RQ SURYLGHV D VSHFWUXP RI VROXWLRQV LQFOXGLQJ via Amazon houseware, sporting goods and outdoor equipment, selling and advertising, building websites, accepting software and computers. online payments, shipping and customer service offerings. However, the complete range of services is Currencies 8 USD, GBP, EUR, AUD, NZD, supported INR, HKD, CAD only available to customers in the United States. When (ISO currency moving outside that country and especially beyond code) developed countries, the scope of services gradually Source: 81&7$'DQDO\VLVRILQIRUPDWLRQRQZZZDPD]RQFRP narrows. VHHDQQH[ CHAPTER IV : E-COMMERCE BY SMALL AND RURAL ENTERPRISES IN DEVELOPING COUNTRIES 49

$VLQWKHFDVHRI$PD]RQFRPWKHIXOOUDQJHRIVHUYLFHV e-commerce solution with a package of what is is only available in the United States. There are three QHHGHG WR RSHQ DQG RSHUDWH HFRPPHUFH )LQDOO\ W\SHVRIH%D\ZHEVLWHV D WKH8QLWHG6WDWHVVLWH E  DQ HQWHUSULVH PD\ FKRRVH WR EXLOG D FXVWRPL]HG RWKHU LQWHUQDWLRQDO VLWHV F  EX\RQO\ VLWHV WDEOH} ,9  e-commerce site. These options differ in terms of ,QRIWKH8QLWHG1DWLRQV0HPEHU6WDWHVH%D\ UHVRXUFHUHTXLUHPHQWVƅH[LELOLW\DQGWKHQHHGIRULQ sites are maintained as a buy-only version, which means KRXVHVNLOOVDQGFDSDELOLWLHV$FFRUGLQJWRWUDIƄFGDWD that users can register to carry out bidding and buying IURP $OH[DFRP 0DJHQWR WooCommerce and but not to sell. Among the countries with international 3UHVWD6KRS are the top three platforms for setting VLWHV DUH WKH IROORZLQJ GHYHORSLQJ FRXQWULHV &KLQD up stores online. ,QGLD 0DOD\VLD WKH 3KLOLSSLQHV 6LQJDSRUH 7KDLODQG If an enterprise has a website – which is often not the DQG9LHW1DP DQQH[}  case among small enterprises in developing countries t LW FDQ DGG DQ HFRPPHUFH IXQFWLRQ WR LW )RU 7DEOH},9 $FFHVVLELOLW\WRGLIIHUHQWH%D\VHUYLFHV websites that are built with a content management  DPRQJ8QLWHG1DWLRQV0HPEHU6WDWHV system (such as Wordpress or Drupal Commerce), this can be done through an open-source, free qSOXJLQrVXFKDV WooCommerce, or with a payment button linking to some payment processing service. Data sites Global Selling Buying shipping

Language This low-cost solution requires minimum time to get Number of translation analytic tools up and running. However, if not well implemented, United States 1 Yes Yes Yes Yes Yes site WKHVLWHPD\ORRNXQSURIHVVLRQDO%HFDXVHWKHEDFN International end processing of orders is done manually by the 23 Yes Yes No Yes Yes sites* enterprise, it may also be time consuming to operate. Buy-only sites 172 Yes No No No No 9DULRXV 6DD6 SODWIRUPV RIIHU WKH IXOO UDQJH RI e-commerce functions needed to develop and Source: UNCTAD analysis of information from ebay.com and HED\FRXNVHHDQQH[ RSHUDWHDQRQOLQHVWRUH)RUH[DPSOH9ROXVLRQFRP * 7KHUHDUHDOVRLQWHUQDWLRQDOVLWHVLQ+RQJ.RQJ &KLQD  provides an online store and shopping cart, built-in DQG7DLZDQ3URYLQFHRI&KLQD marketing tools, social and mobile commerce, hosting and security, customer support, payment )RUH[DPSOHWKHFRPSDQ\RIIHUVWKH*OREDO6KLSSLQJ processing, customer relationship management and 3URJUDP WKDW RQFH VHOOHUV KDYH GHOLYHUHG WKHLU order processing. Advantages include the relative SURGXFWV WR H%D\ 6KLSSLQJ &HQWUH LQ .HQWXFN\  ease of use, rapid set-up, time-saving operations handles customs, import charges and allows complete (because many back-end features are automated), end-to-end tracking of the items. A seller can aim for and multifeatured professional-looking stores that PRUHWKDQFRXQWULHV This service is not available are, in part, helped by the provision of templates. DW H%D\pV VLWH LQ WKH 8QLWHG .LQJGRP +RZHYHU D These can help to enhance the credibility of the VHOOHU LQ WKH 8QLWHG .LQJGRP FDQ OLVW VHOO  SURGXFWV enterprise that may not have the capacity or skills to GLUHFWO\ LQ  JOREDO H%D\ VLWHV LQ (XURSH 1RUWK produce a slick, nice-looking store of its own. $PHULFDDQG$XVWUDOLD$VWKHVHOOHUFHQWUHRIH%D\pV 8QLWHG.LQJGRPVLWHH[SODLQVEX\HUVWKDWFRPHIURP 7KH ƅLS VLGH LV WKDW VHWWLQJ LW XS LV PRUH FRVWO\ qFRXQWULHVZLWKRXWDQH%D\VLWHVHHDEX\RQO\YHUVLRQ DQG GHPDQGLQJ 6HOOHUV DUH DOVR FRQƄQHG WR XVLQJ RIH%D\FRPRSWLPL]HGIRUWKHLUORFDWLRQ:KHQWKHVH templates and features available on the platform. LQWHUQDWLRQDOEX\HUVYLVLWH%D\FRPWKH\FDQRQO\VHH 7KH SD\PHQW PHWKRG DQG RUGHU IXOƄOPHQW RSWLRQV OLVWLQJVWKDWRIIHUSRVWDJHWRWKHLUFRXQWU\r19 supported by a certain platform may not always be applicable to the country of the seller. In a number 3. Setting up a stand-alone of developing markets, including India, various e-commerce site end-to-end local e-commerce platforms have been GHYHORSHGVSHFLƄFDOO\IRUWKHORFDOPDUNHWVXFKDV Stand-alone e-commerce sites can be established %XLOGDED]DDUFRP 0DUWMDFNFRP DQG 6KRSLI\LQ LQ GLIIHUHQW ZD\V 2QH LV WR DGG DQ HFRPPHUFH ER[,9  These integrate better with local payment function to an enterprise’s existing website. Another gateways and local logistics options, which may not DSSURDFKLVWRXVHDqVRIWZDUHDVDVHUYLFHr 6DD6  be the case with international platforms. 50 INFORMATION ECONOMY REPORT 2015

%R[,9 6KRSLI\LQtDORFDOL]HG6DD6H[DPSOH

Canada-based Shopify is an SaaS e-commerce platform for selling physical goods such as fashion items, electronics, VSRUWLQJ JRRGV DQG IXUQLWXUH )RU RQOLQH UHWDLOHUV LW RIIHUV IRU H[DPSOH VLWH WHPSODWHV WKDW FDQ EH FXVWRPL]HG ZLWK LQWHJUDWHGVKRSSLQJFDUWVHPDLOPDUNHWLQJDQGLQYHQWRU\PDQDJHPHQW/RFDOL]HGYHUVLRQVDUHDYDLODEOHLQDOLPLWHG QXPEHU RI GHYHORSLQJ FRXQWULHV LQFOXGLQJ ,QGLD ,QGRQHVLD 0DOD\VLD DQG 6LQJDSRUH ,W DOORZV ERWK LQGLYLGXDOV DQG merchants to run their own stores without the need for technical know-how to develop or maintain a website. The Indian YHUVLRQRIWKHSODWIRUPKDVSODQVVWDUWLQJDW  }SHUPRQWKIRUZKLFKPHUFKDQWVREWDLQWKHFDSDFLW\WRVHOOD PD[LPXPRISURGXFWV7KH\UHFHLYHJLJDE\WHRIƄOHVWRUDJHDQGDUHFKDUJHGD}SHUFHQWWUDQVDFWLRQIHHULVLQJWR   }SHUPRQWK WKHKLJKHUSULFHEHLQJDQRSWLRQWKDWKDVQRWUDQVDFWLRQIHHVDQGSURYLGHVDGGLWLRQDOIHDWXUHV  ,QWKHODVWZHHNRI$XJXVWVRPHQHZVWRUHVZHUHFUHDWHGXVLQJ6KRSLI\LQD Source: 7HFKLQDVLDFRPq+RZ6KRSLI\SODQVWREHDQDGYRFDWHIRU$VLDpVVPDOORQOLQHUHWDLOHUVrDYDLODEOHDWKWWSZZZ WHFKLQDVLDFRPVKRSLI\ZDQWVWREHDQDFWLYLVWIRUVPDOOHFRPPHUFHVWRUHVLQDVLD DFFHVVHG}-DQXDU\  a 6HHKWWSZZZWHFKYLEHVFRPEORJVKRSLI\VXFFHVVLQLQGLD DFFHVVHG}-DQXDU\ 

$PRUHVRSKLVWLFDWHGRSWLRQLVWRFUHDWHDFXVWRPL]HG provided by the online marketplace, such as Direct e-commerce site by using off-the-shelf software &KHFNRXW E\ (WV\FRP RU $OLSD\ E\ $OLEDEDFRP SDFNDJHV VXFK DV 0DJHQWR RU GHYHORSLQJ DQ While limited to sellers that are registered on that entirely new site, which would allow for complete marketplace, this option is easy to apply. Accepting FXVWRPL]DWLRQ0DQ\RIIWKHVKHOISDFNDJHVDOORZIRU payment is part of the seller’s online marketplace VRPH FXVWRPL]DWLRQ RI IXQFWLRQDOLWLHV DQG IHDWXUHV account, and requires no additional account or available in the package. While the main advantage is set-up. WKHVFRSHIRUWDLORULQJWKHRQOLQHVWRUHWRWKHVSHFLƄF needs of the enterprise, it is a costly option that (b) Payment processing using a third-party requires considerable in-house IT capabilities. payment gateway

4. Processing of payments There are several third-party payment processors on the market, such as Skrill, 3D\3DO &KHFNRXW As highlighted in chapter III, having access to *RRJOH :DOOHW &KHFNRXW E\ $PD]RQ

DV3D\3DODFFRXQWV,WSURYLGHVPXOWLSOHVROXWLRQVWKDW *RRJOH:DOOHWWRDQG&KHFNRXWE\$PD]RQWRHLJKW can be integrated into a website as a shopping cart, currency types. Such limitations add transaction DQGFXVWRPL]DEOHSD\PHQWEXWWRQV IRUH[DPSOHWKH costs and demand more expert knowledge to navigate q3D\1RZrEXWWRQ 3D\3DOVHUYLFHVDUHDYDLODEOHIRU through national exchange policies. )XUWKHUPRUH  JHRJUDSKLFDO ORFDWLRQV LQFOXGLQJ  8QLWHG international payments, especially to developed 1DWLRQV 0HPEHU 6WDWHV WDEOH} ,9  A distinction countries, have to meet various compliance/anti- FDQ EH PDGH EHWZHHQ WKUHH W\SHV RI VHUYLFHV (a) money-laundering regulations. This involves, among VHQGLQJ DQG UHFHLYLQJ PRQH\ E  SD\PHQW ZLWK D other things, completing, signing and providing 3D\3DO DFFRXQW EDQN DFFRXQW RU FUHGLW RU GHELW YDULRXVFRPSOLDQFHGRFXPHQWV)RUPLFURDQGVPDOO FDUGDFFRXQW F VKRSSLQJRQOLQH7KHVHVHUYLFHVDUH HQWHUSULVHVWKLVFDQUHSUHVHQWDVLJQLƄFDQWFKDOOHQJH SDFNDJHGLQWRWKUHHDFFRXQWW\SHV WDEOH},9  but one which may, at least partially, be alleviated The business account, which is the most relevant for WKURXJKSXEOLFLQWHUYHQWLRQV ER[,9  online merchants that are registered businesses, is (c) Use of a payment gateway linked to a DYDLODEOHLQ8QLWHG1DWLRQV0HPEHU6WDWHV7KH merchant account SUHPLHU DFFRXQW ZKLFK LV DYDLODEOH LQ  8QLWHG 1DWLRQV0HPEHU6WDWHVPDNHVLWSRVVLEOHWRUHFHLYH This option is more complex as it involves obtaining money from online transactions (credit and debit a merchant account with a bank, paying associated card) by selling online, but is designed for individuals fees and selecting a payment gateway.41 Sellers in ZKRDUHQRWLQIXOOWLPHEXVLQHVVRSHUDWLRQV)LQDOO\ developing countries may consider an international the personal account, which can be used by informal SD\PHQWJDWHZD\ IRUH[DPSOH$VLD3D\FRPZKLFKLV enterprises, enables the sending of money and DYDLODEOHLQ$VLDQFRXQWULHVLQFOXGLQJ9LHW1DP RU EX\LQJRQOLQHDQGLVDYDLODEOHWR8QLWHG1DWLRQV DORFDORQH IRUH[DPSOH1JDQOXRQJYQLQ9LHW1DP  0HPEHU6WDWHV)RUH[DPSOHDVPDOOEXVLQHVVLQ6UL The former option may offer more advanced technical /DQNDFDQRSHQD3D\3DODFFRXQWDQGVHQGPRQH\ capabilities such as fraud monitoring, but may lack outside Sri Lanka but not use it to receive money local availability or may not be supported locally in from abroad. terms of its fees, currencies accepted, features or Currency limitations represent another potential language options. The advantage compared with a EDUULHU 3D\3DO LV OLPLWHG WR  W\SHV RI FXUUHQFLHV third-party processor is that the transaction is handled directly between the seller and the buyer, which normally results in the seller receiving the money faster 7DEOH},9 *HRJUDSKLFDOFRYHUDJHRIGLIIHUHQW DQGDWORZHUFRVW2QWKHƅLSVLGHVHWXSFRVWVDUH  3D\3DOVHUYLFHV higher and the process more complex.

Number of countries in  2UGHUIXOƂOPHQW Type of account which account 5HPDUNV is available $V HPSKDVL]HG DERYH RUGHU IXOƄOPHQW LV DQ essential element of e-commerce. If the seller Personal accounts 173 Send and receive money at individual capacity is unable to deliver the item, the buyer has no Premier accounts 90 Personal account functions reason to trust the seller or, more generally, the as well as accepting credit/ PDUNHWSODFH 2UGHU IXOƄOPHQW LQYROYHV LQYHQWRU\ debit cards, yet individual capacity storage and management, packing the order, Business accounts 73 Full functions including shipping, providing customer services and taking bank account access, care of returns and exchanges. Attending to the employee access, etc., full range of related activities can quickly become a at the registered business’ operations time-consuming task for a small business, making third-party e-commerce platforms that offer order Source: 81&7$'DQDO\VLVRILQIRUPDWLRQIURP3D\3DOVHH IXOƄOPHQWVHUYLFHVPRUHDWWUDFWLYH DQQH[} a $V RI  6HSWHPEHU  WKH qUHFHLYHr IXQFWLRQ 3RRU ORJLVWLFDO LQIUDVWUXFWXUH KDV OHG VRPH ZDVQRWDYDLODEOHLQWKH3D\3DOVLWHVRIHLJKWRIWKHVH e-commerce companies to establish in-house FRXQWULHV WKH 3OXULQDWLRQDO 6WDWH RI %ROLYLD &RVWD 5LFD*XDWHPDOD*X\DQD1LFDUDJXD3DUDJXD\6DLQW GHOLYHU\V\VWHPV,Q1LJHULDIRUH[DPSOHWKH-XPLD 9LQFHQWDQGWKH*UHQDGLQHVDQG6XULQDPH e-commerce portal runs its own system to deliver 52 INFORMATION ECONOMY REPORT 2015

%R[,9 6XSSRUWZLWKFRPSOLDQFH7KH3$&,5SURMHFWLQ&ÑWHGp,YRLUH

6PDOO HQWHUSULVHV LQ ORZLQFRPH FRXQWULHV QHHG WR RYHUFRPH VLJQLƄFDQW EDUULHUV EHIRUH WKH\ FDQ IXOO\ EHQHƄW IURP e-commerce. They need knowledge of and technical capabilities for available solutions, access to online payment VROXWLRQVFRVWHIIHFWLYHORJLVWLFVDQXQGHUVWDQGLQJRILPSRUWUHTXLUHPHQWVDQGƄVFDOUHSUHVHQWDWLRQLQH[SRUWPDUNHWV awareness and reputation of the sellers and their goods, and improved customer service.

7KH,7&VXSSRUWVVPDOOHQWHUSULVHVLQGLIIHUHQWZD\VLQWKLVFRQWH[W)RUH[DPSOHDSURWRW\SHSODWIRUPZDVEXLOWZLWKLQ WKH3$&,5SURMHFWHQDEOLQJIDVKLRQDQGDFFHVVRU\SURGXFHUVIURP&ÑWHGp,YRLUHWRPDUNHWWKHLUSURGXFWVRQOLQH6LQFH ,7&KDVFRDFKHGVHOHFWHGORFDOFRPSDQLHVRQWKHLUPDUNHWLQJDQGEUDQGLQJVWUDWHJLHVDQGKHOSHGWKHPWR RYHUFRPHNH\EDUULHUVWRVHOOLQJSURGXFWVRQOLQH:LWKWKHODXQFKRIWKHq,YRU\0DOOrORFDOSURGXFHUVLQWKLVVHFWRUKDYH IRXQGDQHZFKDQQHOIRUH[SRUWLQJWKHLUJRRGVWR(XURSH

2QHRIWKHFKDOOHQJHVFRQFHUQVWKHLVVXHRIFRPSOLDQFH7KLVZDVDGGUHVVHGE\ƄUVWKDYLQJHQWUHSUHQHXUVXQLWHG EHKLQGRQHVLQJOHGLVWULEXWRUa,7&WKHQKHOSHGWKHGLVWULEXWRUWRFRPSO\ZLWKWKHWHUPVDQGFRQGLWLRQVRI&KHFN2XW com for merchants and to prepare the needed documents. ITC also helped prepare the e-commerce website and PDNHLWFRPSOLDQWZLWKWKHWHUPVRIFRQGLWLRQV)LQDOO\DSSURYDOZDVREWDLQHGIRUWKHVLWHLYRU\PDOOFRPWRPDUNHW PRUHWKDQSURGXFWVIURPEUDQGVPDGHLQ$IULFDDQGDFFHSWRQOLQHSD\PHQWZLWK9LVD0DVWHU&DUGDQG 3D\3DO Source: UNCTAD, based on information provided by ITC. a )RUPRUHLQIRUPDWLRQVHHKWWSZZZLQWUDFHQRUJ&RWHG,YRLUH$SSXLLQVWLWXWLRQQHOHWRSHUDWLRQDOSRXUODPHOLRUDWLRQ GXFDGUHGHVDIIDLUHV DFFHVVHG}-DQXDU\ 

SURGXFWV WR HQG FXVWRPHUV ER[ ,,  $V WKHUH RSSRUWXQLW\ 2N+L ZZZRNKLFRP  LQ .HQ\D IRU was no precedent for e-commerce payments in example, seeks to assign a physical address to WKH PDUNHW -XPLD KDG WR OHW EX\HUV SD\ FDVK RQ the people in the world who don’t have one. It is delivery (there were no widely accessible e-payment enabling the creation and secure sharing of physical options) and offer various delivery locations (such addresses via mobile phone. The company aims to as the nearest police station). Although services enable buyers to turn their physical addresses into such as DHL existed in the market, they were not D XQLTXH XQLIRUP UHVRXUFH ORFDWRU 85/  ZKLFK SUHSDUHG WR KDQGOH FDVK 7RGD\ -XPLD controls FDQ VXEVHTXHQWO\ EH VKDUHG YLD HPDLO 606 DQG  }SHUFHQWRI1LJHULDpVRQOLQHUHWDLOPDUNHW. WhatsApp. Ultimately, however, it is important to Sometimes e-commerce companies in low-income establish a nation-wide, universal addressing system countries face particular challenges due to either WRDYRLGIUDJPHQWDWLRQ VHHDOVRFKDSWHU9,  inadequate or non-existent building numbers, VWUHHW QDPHV DQG OD\RXWV $URXQG  FRXQWULHV 6. The importance of local solutions do not have a postcode system, one of the pillars RI HIƄFLHQW GHOLYHU\ $GGUHVVHV VHUYH DV D EDVLF 3UHFHGLQJVHFWLRQVKDYHKLJKOLJKWHGPXOWLSOHRSWLRQV facilitator of communication between people, public for micro and small enterprises in developing countries VHUYLFH LQVWLWXWLRQV DQG EXVLQHVVHV 838   to engage in e-commerce. Whereas new solutions are :LWKRXWWKHPLWLVGLIƄFXOWWRUHDFKLQGLYLGXDOVDQG H[SDQGLQJWKHLURSSRUWXQLWLHVWRVHOORQOLQHVLJQLƄFDQW for businesses to operate effectively. challenges and barriers remain. Compared with their In some cases, such limitations may be overcome counterparts in more developed parts of the world, by using automated parcel lockers, drop boxes, small businesses in large parts of Africa and Asia face SRVW RIƄFH ER[HV DQG RWKHU DOWHUQDWLYH PHWKRGV additional challenges. RI GHOLYHU\ %XW VXFK DSSURDFKHV DUH QRW DOZD\V FRQYHQLHQW 1DNHG 3L]]D LQ 1DLUREL VDZ D QHHG WR $FFHVVLELOLW\ EDUULHUV FDXVH VLJQLƄFDQW IUXVWUDWLRQV LQGLYLGXDOO\ PDS DQG ODEHO HYHU\ DSDUWPHQW RIƄFH among aspiring young entrepreneurs. The online complex and home in its delivery radius in order to platform for advocacy campaigners, change.org, is locate buyers and to be able to guarantee delivery full of petitions from Ghana, Nigeria, Sri Lanka and within a certain time.2WKHUFRPSDQLHVKDYHIRXQG 8NUDLQH VHHNLQJ WKH DWWHQWLRQ RI 3D\3DO H%D\ DQG the lack of a precise address system to be a business $PD]RQ )RU LQVWDQFH RQH SHWLWLRQ WKDW ZDV VLJQHG CHAPTER IV : E-COMMERCE BY SMALL AND RURAL ENTERPRISES IN DEVELOPING COUNTRIES 53

E\SHRSOHUHTXHVWV3D\3DOWRDOORZSHRSOHLQ ZKLFKDFFHSWV9LVDDQG0DVWHU&DUGSD\PHQWVLQDGGLWLRQ Ukraine to receive money.447KHq3D\3DOIRU6UL/DQNDr WR SRSXODU PRELOH SD\PHQWV VXFK DV E.DVK49 The FDPSDLJQ ZKLFK VWDUWHG LWV DFWLYLWLHV LQ  KDV FRPSDQ\FDQDOVRRUJDQL]HORFDOGHOLYHU\,Q6UL/DQNDD DWWUDFWHG VRPH  VXSSRUWHUV DSSHDOLQJ WR WKH homegrown e-commerce company has emerged as an *RYHUQPHQWRI6UL/DQNDDQG3D\3DOWRZRUNWRJHWKHU alternative e-commerce platform for small enterprises to WRƄQGDVROXWLRQ45 EX\LWHPVIURPWKHLQWHUQDWLRQDOPDUNHW ER[,9 7KH examples cited above from Africa and Asia illustrate 0RUHRYHU HYHQ ZKHQ WKH\ DUH DFFHVVLEOH JOREDO the importance of local solutions complementing those e-commerce platforms do not always provide solutions offered by global e-commerce companies. to overcome domestic barriers experienced in the GHYHORSLQJFRXQWULHV)RULQVWDQFHH%D\RU$PD]RQ do not provide support for border administration B. OPPORTUNITIES FOR when importers face problems of customs clearance RURAL ENTERPRISES RU GRPHVWLF WUDQVSRUW $FFHVV WR 3D\3DO GRHV TO SELL ONLINE not guarantee that payments can be seamlessly transferred through each local bank where banking The lingering rural–urban divide in terms of access to LQIUDVWUXFWXUHLVQRWHIƄFLHQW)RUH[DPSOHLQ.HQ\D affordable ICT services represents a barrier for rural (TXLW\ %DQN UHDFKHG DQ H[FOXVLYH DUUDQJHPHQW ZLWK enterprises wishing to leverage ICTs in their activities. 3D\3DOIRUFDVKZLWKGUDZDOV :KHUHDVDVPXFKDV}SHUFHQWRIUXUDOSRSXODWLRQV are now covered by a mobile signal, there has been The absence of global platform providers creates less progress in terms of Internet access, and less still VFRSHIRUORFDOSOD\HUVWRƄOOWKHYRLG,QVXE6DKDUDQ ZLWKUHJDUGWREURDGEDQG 3DUWQHUVKLSRQ0HDVXULQJ Africa, for example, a number of e-commerce ,&7IRU'HYHORSPHQW  payment gateways have been created. These include In considering the potential of rural e-commerce, it is ,QWHUVZLWFK -DPER3D\ 2]LQER 3DJD 3D\QRZ important to understand the variety of products typically 3HVD3DO6LPSOH3D\*'LUHFW3D\DQG

%R[,9 +HOSLQJVPDOOEXVLQHVVRYHUFRPHEDUULHUVWRHFRPPHUFH7KHFDVHRI.DSUXND

:LWKRYHUSURGXFWVLQFDWHJRULHVDQGDQDQQXDOWXUQRYHURIRYHU}PLOOLRQ.DSUXNDLVWKHODUJHVWHFRPPHUFH company in Sri Lanka. An important part of its business strategy is to help local entrepreneurs overcome barriers to e-commerce.

0DQ\HQWUHSUHQHXUVLQ6UL/DQNDGRQRWKDYHFUHGLWFDUGVDQGORFDOEDQNVPD\QRWHQWHUWDLQLQWHUQDWLRQDOWUDQVDFWLRQV 7KDQNV WR DJUHHPHQWV ZLWK WKH &HQWUDO %DQN DQG WKH LQWHUQDWLRQDO RQOLQH FDUG DXWKHQWLFDWLRQ RUJDQL]DWLRQ 9HUL6LJQ .DSUXNDFDQDFFHSWORFDOFXUUHQF\WUDQVDFWLRQV,WKHOSVEX\HUVFKRRVHLWHPVLQLQWHUQDWLRQDOPDUNHWVDQGRSWLPL]HWKH prices and offerings of various international sites before placing an order.

6PDOOEXVLQHVVHVRIWHQƄQGLWFKDOOHQJLQJWRQDYLJDWHFXVWRPVSURFHGXUHVXQSUHGLFWDEOH}GHOD\HGFOHDUDQFHODQGLQJ FKDUJHVDQGWD[HV,QUHVSRQVH.DSUXNDKDVGHYHORSHGDQqLPSRUWVLPXODWRUrWKDWDOORZVORFDOEX\HUVWRFXWDQGSDVWH items from global websites that generate accurate estimates about shipping cost, taxes and also potential landing dates. This solution operates in concert with warehouses in the United States and Sri Lanka, and handles overall shipping LQFOXGLQJ FOHDUDQFH DW ODQGLQJ $ ORFDO YDQ VHUYLFH FDUULHV RXW GHOLYHULHV DFURVV 6UL /DQND .DSUXND KDV HQWHUHG LQWR agreements with various global brands to ensure smooth operations. Source: UNCTAD. 54 INFORMATION ECONOMY REPORT 2015

make it more interesting. Therefore, niche goods, A number of provinces have developed portals with such as rare or unusual foods or those that have agricultural information including pricing and the ability FHUWLƄFDWLRQ IRUH[DPSOHIRUEHLQJRUJDQLFRUIURP WRDGYHUWLVHSURGXFWVZLWKRIƅLQHSXUFKDVH6RPHKDYH a certain region) could be compelling enticements DOVR LPSOHPHQWHG %% LQLWLDWLYHV VXFK DV IDUPHUV IRURQOLQHVDOHV pooling purchases to achieve scale for buying inputs • 'ULHGKHUEVDQGDQLPDOSURGXFWV7KHVHDUHOHVV VXFK DV IHUWLOL]HU 5XUDO HFRPPHUFH LQLWLDWLYHV KDYH SHULVKDEOHDQGWKHUHIRUHPRUHYLDEOH often emanated from the ground up, as illustrated by • 0DQXIDFWXUHG SURGXFWV IRU H[DPSOH IXUQLWXUH  WZRFDVHVLQWKHUXUDO-LDQJVXDQG=KHMLDQJ3URYLQFHV These pose less of a challenge though they (a) The case of Dongfeng village in Jiangsu require a supporting ecosystem for packaging and Province KDUGZDUHDFFHVVRULHV • +DQGLFUDIWV 7KHVH PD\ EH PRUH DSSHDOLQJ WR In the village of Dongfeng, under the administration foreign than domestic buyers. Their quality dictates RI 6KDML 7RZQLQ -LDQJVX 3URYLQFH LQKDELWDQWV KDYH how attractive they might be to potential online traditionally made a living by farming and migrant EX\HUV ODERXU 9LOODJHUV KDYH FRRSHUDWHG WR VSHFLDOL]H LQ • Services, such as homestays, restaurants and livestock raising and recycling of waste plastic, WRXULVW DWWUDFWLRQV 7KHVH DUH QRW SHULVKDEOH DQG EXW ZLWK OLWWOH VXFFHVV ,Q  D \RXQJ PDQ IURP WKH\PD\EHDWWUDFWLYHWRORFDOFLWL]HQVIRUH[DPSOH the village, inspired by the home furnishings of the to urban people interested in rural tourism. 6ZHGLVK FRPSDQ\ ,.($ VHW XS 'RQJIHQJpV ƄUVW 2WKHU VHUYLFH FDWHJRULHV RI UHOHYDQFH LQFOXGH online shop to sell simple assembled furniture. Today, various micro tasks, app development and game furniture assembled in this village is sold online all over development as long as the required infrastructure the country and also exported. DQGVNLOOVDUHLQSODFH 81&7$'D  %HIRUH WKH LQWURGXFWLRQ RI RQOLQH UHWDLOLQJ WKHUH ZDV The remainder of this chapter looks at the mixed no furniture industry in Shaji Town, let alone other experience of rural e-commerce in three Asian advantages such as capital, logistics or accessible geography. However, when some villagers started selling FRXQWULHV t &KLQD WKH 5HSXEOLF RI .RUHD DQG Thailand – and discusses lessons that can be drawn. assembled furniture through the Internet, several farmers The countries vary in terms of approaches taken to decided to follow their example. As a result, a furniture promote rural e-commerce as well as with regard to assembly and manufacturing industry started to emerge. the readiness for engaging in such activities. $WWKHVDPHWLPHRWKHUUHODWHGLQGXVWULHVGHULYHGEHQHƄWV from the development of online retailing, including 1. Grassroots-led rural e-commerce in wood processing, logistics, hardware accessories and China SDFNDJLQJ %\ WKH HQG RI  WKH YLOODJH KDG WKUHH hardware accessories factories, 15 logistics and express &KLQD KDV D UXUDO SRSXODWLRQ RI RYHU } PLOOLRQ delivery companies, and seven computer stores. There LQKDELWDQWVRIZKLFKDERXW}PLOOLRQKDYH,QWHUQHW DUHQRZRYHURQOLQHVKRSVZLWKFRPELQHGDQQXDO DFFHVV 0LQJHVHWDO 7KHFHQWUDO*RYHUQPHQW UHYHQXHRIRYHU}PLOOLRQ .DQ DQG'RQJIHQJ has taken various steps to reduce the urban–rural KDVEHHQQDPHGWKHWRSq7DREDRYLOODJHr51 GLJLWDO GLYLGH )RU H[DPSOH WKH 9LOODJH WR 9LOODJH To conclude, the online shopping phenomenon SURMHFW FRRUGLQDWHG E\ WKH 0LQLVWU\ RI ,QGXVWU\ DQG originated from the grassroots, without preferential Information Technology, helped to provide telephone JRYHUQPHQWSROLFLHVRUƄQDQFLDOVXSSRUW,WVJURZWKKDV service and subsequently broadband to administrative had various effects. Not only has the income of villagers villages.%\}SHUFHQWRIWKHPKDGREWDLQHG increased, unemployment has been almost eliminated. such access. Another initiative is the dedicated 2QDYHUDJHVL[ZRUNHUVDUHHVWLPDWHGWREHHPSOR\HG WHOHSKRQHQXPEHUqrODXQFKHGE\WKH0LQLVWU\ E\HYHU\RQOLQHUHWDLOHU :RUOG%DQN  for Agriculture to provide nationwide information about agricultural techniques, disaster warnings and market (b) The case of Suichang in Zhejiang Province pricing, covering about one third of farmers across the country. However, the central Government does not A different example is Suichang, a county of some KDYHDVSHFLƄFSURJUDPPHIRUUXUDOHFRPPHUFH  LQKDELWDQWV LQ WKH VRXWKZHVW RI =KHMLDQJ CHAPTER IV : E-COMMERCE BY SMALL AND RURAL ENTERPRISES IN DEVELOPING COUNTRIES 55

3URYLQFH,WVPRXQWDLQRXVDQGIRUHVWHGVXUURXQGLQJV and most households enjoy broadband connectivity. It are home to abundant agricultural resources, such SURYLGHGIXQGVIRUWKHFRQVWUXFWLRQRIDVTXDUH DV EDPERR KHUEV WHD ƅRZHUV YHJHWDEOHV SRXOWU\ metre distribution centre, funding and training for DQG PXVKURRPV ,Q  YLOODJHUV VWDUWHG VHOOLQJ HFRPPHUFHVWDUWXSVDVZHOODVSUHIHUHQWLDOƄQDQFH agricultural products through popular Chinese tax and house leasing measures. It furthermore offers HFRPPHUFHSRUWDOV%\DOPRVWHYHU\KRXVHKROG RQOLQHVDOHVJXDUDQWHHVDQGFHUWLƄHVORFDORQOLQHVWRUH had set up a store with annual sales exceeding operators. It has established a food safety mechanism ¥}PLOOLRQ }PLOOLRQ 9LOODJHUVOHYHUDJHGJURZLQJ LQSDUWQHUVKLSZLWKIDUPHUVFRRSHUDWLYHVWKH2QOLQH demand for bamboo products such as charcoal, Shop Association and Taobao to monitor the process shoots and furniture, as well as organically grown from product preparation, to online sales and after- vegetables and herbs. Surging sales helped to drive the sales activities. UHYLWDOL]DWLRQRIXSVWUHDPFURSIDUPLQJ)RUH[DPSOH WKHVL]HRIEDPERRIRUHVWVPRUHWKDQGRXEOHGIURP 2. Rural e-commerce in the  PX  KHFWDUHV  LQ  WR  PX  KHFWDUHV  LQ  2SHUDWLQJ DQ RQOLQH Republic of Korea: The case of store has become a new employment channel for the Information Network Village college graduates, and laid-off or migrant workers. platform (PSOR\PHQWUHODWHGWRHFRPPHUFHLQWKLVFRXQW\LV HVWLPDWHGWRH[FHHGDQGWKHQXPEHURIRQOLQH 7KH 5HSXEOLF RI .RUHD LV RQH RI WKH ZRUOGpV PRVW VWRUHVLQ6XLFKDQJKDVJURZQWRDERXWQRWRQO\ DGYDQFHG,&7QDWLRQV,WLVDPRQJWKHWRSFRXQWULHV marketing agricultural products but also tourism to LQWHUPVRIWKHQXPEHURIRQOLQHEX\HUV WDEOH},, DQG attract visitors. DPRQJ WKH WRS  SHUIRUPHUV LQ WKH 81&7$' %& (FRPPHUFH ,QGH[ FKDSWHU ,,,  7KH *RYHUQPHQW ,Q0D\DVWUDWHJLFFRRSHUDWLRQDJUHHPHQWZDV KDV ORQJ UHFRJQL]HG WKH SRWHQWLDO IRU HFRPPHUFH concluded between Suichang County and Taobao. to support enterprise growth in both urban and FRP WKH && RQOLQH PDUNHWSODFH RI WKH $OLEDED UXUDO DUHDV 2QOLQH VKRSSLQJ LQ  DPRXQWHG WR *URXS ER[,, WRHVWDEOLVKDGHGLFDWHGSRUWDO KWWS } ELOOLRQ } ELOOLRQ  6WDWLVWLFV .RUHD   VXLFKDQJFKLQDWDREDRFRP  0DQ\ RI 6XLFKDQJpV 6RPH}SHUFHQWRIWKRVHOLYLQJLQUXUDODUHDVXVHG e-commerce merchants have set up online stores on WKH,QWHUQHWLQ7KHRQOLQHPDUNHWIRUIRRGDQG this marketplace. RWKHUUXUDOSURGXFWVLVVLJQLƄFDQWDQGJURZLQJ .RUHD 7KH 2QOLQH 6KRS $VVRFLDWLRQ ZKLFK ZDV VHW XS LQ ,QWHUQHWDQG6HFXULW\$JHQF\  0DUFKE\VRPHSLRQHHURSHUDWRUVLQ6XLFKDQJ 7KH &ORVLQJ WKH 'LJLWDO 'LYLGH $FW   FDOOHG IRU KDVSOD\HGDQLPSRUWDQWUROHLQWKUHHZD\VWUDLQLQJ qHVWDEOLVKLQJSXEOLFDFFHVVFHQWUHVWKDWRIIHU,QWHUQHW WUDQVIHURINQRZOHGJHDQGORJLVWLFV5HJXODUFRXUVHV 54 on how to operate an online store are available to DFFHVVDQGOHDUQLQJRSSRUWXQLW\WRUHVLGHQWVLQQHHGr This was accomplished through the Information PHPEHUVIUHHRIFKDUJH0HPEHUVFDQEHQHƄWIURP services by professional photographers and by using 1HWZRUN9LOODJH ,19,/ SODWIRUPODXQFKHGLQE\ image processing techniques. The Association also WKH0LQLVWU\RI*RYHUQPHQW$GPLQLVWUDWLRQDQG+RPH encourages experienced members to share their $IIDLUV7KH,19,/SODWIRUPZDVqGHVLJQHGWRUHGXFH skills in online store design and with regard to fraud the digital divide between rural and urban regions... prevention. In the area of shipping and delivery, the and to increase income level of local residents by Association negotiates prices with express delivery boosting regional economy through e-commerce, companies on behalf of members. Its distribution which eventually leads to the improvement of the centre aggregates products to achieve economies of TXDOLW\ RI OLIH LQ UXUDO FRPPXQLWLHVr55 9LOODJHV FDQ scale for shipping, which helps to reduce the costs of submit an application to the municipal authority logistics. that decides whether to approve it based on certain VHOHFWLRQFULWHULD$WWKHHQGRIWKHUHZHUH The local government has contributed in different ,19,/VLQWKHFRXQWU\ ƄJXUH},9  ways. It has upgraded transport conditions through the construction of roads to remote areas and a major $OO ,19,/V DSSHDU RQ WKH FHQWUDO SRUWDO KWWS highway linking the province to China’s superhighway www.invil.org) with descriptions of their agricultural network. The infrastructure of ICTs is being improved specialties and tourist attractions. Niche products and 56 INFORMATION ECONOMY REPORT 2015

)LJXUH},9 5HSXEOLFRI.RUHDQXPEHURI,QIRUPDWLRQ1HWZRUN9LOODJHVt

400

350

300

250

200

150

100

50

0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Source: 5HSXEOLFRI.RUHD0LQLVWU\RI*RYHUQPHQW$GPLQLVWUDWLRQDQG+RPH$IIDLUV services include visiting local lakes, bean sauce and KDYHDFKLHYHGPRUHWKDQ}ELOOLRQ }PLOOLRQ LQDQQXDO medical mud. sales through the postal distribution channel. This was ,QWKH,19,/SODWIRUPIDFLOLWDWHGDERXW}PLOOLRQ made possible by the combination of public trust that it LQ RQOLQH VDOHV DQG VRPH } PLOOLRQ YLVLWRUV ZHUH enjoyed as a government agency, strict quality control, UHFRUGHG RQ WKH PDLQ ,19,/ ZHEVLWH DQG RQ WKRVH reasonable prices and quick and accurate delivery (ITU RIHDFKLQIRUPDWLRQYLOODJH ƄJXUH},9 $SHUFHQWDJH DQG838  RI WKH LQFRPH IURP WKH VDOHV DURXQG } SHU FHQW  LV DOORFDWHG WR ,19,/ RSHUDWLRQV DQG PDLQWHQDQFH 3. Rural e-commerce in Thailand Quality control is stringent, with all products and services being reviewed before they can be sold on ,Q 7KDLODQG %& HFRPPHUFH UHYHQXHV DPRXQWHG WKHSODWIRUP9LOODJHUVDUHDOVRDVVLVWHGE\,19,/VWDII WR % } PLOOLRQ } ELOOLRQ  LQ  7KDLODQG to create compelling stories about their products to 1DWLRQDO6WDWLVWLFDO2IƄFHD -XVWXQGHU}PLOOLRQ HQKDQFHWKHLUVDOHVSRWHQWLDO/RJLVWLFVDUHHIƄFLHQWLW people had shopped online in that year (Thailand, takes less than three days to send a product anywhere 1DWLRQDO6WDWLVWLFDO2IƄFHE 2QHTXDUWHURIWKH LQ WKH FRXQWU\ DW ORZ SULFHV  WR } SHU NLOR  $Q population aged 15 and above used the Internet and memorandum of understanding has been made with LQQRQPXQLFLSDODUHDVWKHHTXLYDOHQWUDWHZDV}SHU H%D\ WR PDUNHW VSHFLƄF ,19,/ SURGXFWV WKURXJK D cent. Thailand features in the middle of the UNCTAD dedicated channel on its e-commerce platform in the %& (FRPPHUFH ,QGH[ LQ VHYHQWLHWK SODFH EXW 5HSXEOLFRI.RUHD overperforms in terms of the actual share of online shoppers in the population (chapter III). 7KHSRVWDORSHUDWRULQWKH5HSXEOLFRI.RUHDKDVDOVR VXSSRUWHGWKHJURZWKRIUXUDOHFRPPHUFH,WVSRVWRIƄFH In some respects, Thailand has good conditions for service has developed into a distribution channel which e-commerce. The entire population is covered by directly connects producers nationwide with consumers. the postal system, and home delivery is available ,WKDVEXLOWXSDQLPDJHRIDqVDIHGLVWULEXWLRQFKDQQHOr WR } SHU FHQW RI KRXVHKROGV 0RUHRYHU VRPH where consumers can trust and buy good quality typical PHUFKDQWV GHOLYHU WR WKH FRXQWU\pV URXQGWKH products from every region of the nation. Among other FORFN (OHYHQ VWRUHV )LQDQFLDO OHJLVODWLRQ WKDW WKLQJV QLQH VPDOO DQG PHGLXPVL]HG UXUDO HQWHUSULVHV supports online payment via credit card, bank transfer CHAPTER IV : E-COMMERCE BY SMALL AND RURAL ENTERPRISES IN DEVELOPING COUNTRIES 57

)LJXUH},9 (FRPPHUFHVDOHVRIDQGQXPEHURIYLVLWRUVWR,QIRUPDWLRQ1HWZRUN9LOODJHV

20 50 17.2 18 15.6 16

14.2 39 40 12.7 13 14 41 10.2 30 12 30 10 21 8 $ million 20 6 13 9 4

10 Number of visitors (in millions 2 0 0 2008 2009 2010 2011 2012 2013

E-commerce sales Visitors to INVIL websites

Source: .RUHD/RFDO,QIRUPDWLRQ5HVHDUFKDQG'HYHORSPHQW,QVWLWXWH Note: 7KHQXPEHURIYLVLWRUVLQFOXGHVYLVLWRUVWRWKHPDLQ,19,/VZHEVLWH ZZZLQYLORUJDFFHVVHG}-DQXDU\ DQGWRWKRVH of each of the information villages. and digital money is also in place. Not only is there  5HVXOWVKDYHEHHQGLVDSSRLQWLQJ7KHZHEVLWHV DORFDOHPRQH\VHUYLFHVLPLODUWR3D\3DOEXWEX\HUV have relatively low visibility, and maintenance and FDQDOVRPDNHSD\PHQWDWRYHUORFDWLRQVVXFK upgrading are done in-house with limited resources. as banks, automatic teller machines and convenience Another challenge is convincing merchants about stores.59 the importance of quality control and that the As much as three quarters of the population live in products they sell should be relevant for potential UXUDO DUHDV 9DULRXV HIIRUWV E\ WKH *RYHUQPHQW KDYH EX\HUV 2QOLQH RUGHULQJ DQG SD\PHQW DUH SRVVLEOH been made to bridge the urban–rural digital divide, but orders are routed to a central location. Sellers including by expanding the network of telecentres. are contacted to dispatch the product with payment eventually wired to the merchant’s bank account. As 7KH 0LQLVWU\ RI ,QIRUPDWLRQ DQG &RPPXQLFDWLRQ a result, the platform is used more as a marketing 7HFKQRORJ\ 0,&7  KDV RIIHUHG FRPSXWHUV DQG RQH year free Internet access to local communities that WRRO ZLWK EX\HUV FRQWDFWLQJ VHOOHUV RIƅLQH 7KLV KDV wish to establish a telecentre and that meet certain sometimes caused problems with merchants being slow to dispatch products or imposters posing as FULWHULD %\  WKH 0,&7 KDG HVWDEOLVKHG  telecentres and additional ones were to be installed buyers tricking the sellers to provide details about their bank accounts. XVLQJ XQLYHUVDO VHUYLFH FRQWULEXWLRQV ,Q  MXVW RYHU  7KDLV DERXW } SHU FHQW RI DOO ,QWHUQHW Apart from the telecentre initiatives, the Government users) accessed the Internet via telecentres (Thailand, has developed another website for the sale of 1DWLRQDO6WDWLVWLFDO2IƄFHE  UXUDO SURGXFWV KWWSWKDLODQGPDOOQHW DFFHVVHG 7KH0,&7KDVDOVRHVWDEOLVKHGZHEVLWHVWRPDUNHW }-DQXDU\ +RZHYHUWKLVVLWHDOVRVXIIHUVIURP SURGXFWV DQG VHUYLFHV RI WKH WHOHFHQWUHV 2QH SRRUYLVLELOLW\)RUHYHU\XVHUVWKDWYLVLWRQHRIWKH VXFK VLWH VHOOV WHOHFHQWUH SURGXFWV KWWSZZZ country’s popular commercial online shopping sites, WKDLWHOHFHQWUHFKDUPVFRP DFFHVVHG } -DQXDU\ only one visits thailandmall.net.5XUDOHQWUHSUHQHXUV   DQG DQRWKHU DUUDQJHV WRXUV WR WHOHFHQWUHV have instead turned to social media to advertise their KWWSWKDLWHOHFHQWUHWRXUFRPDFFHVVHG}-DQXDU\ SURGXFWVZLWKVDOHVW\SLFDOO\WDNLQJSODFHRIƅLQH 58 INFORMATION ECONOMY REPORT 2015

4. Lessons from the three cases HFRPPHUFH)LUVWDNH\UROHLVWRFUHDWHDQHQDEOLQJ environment, with roads, broadband access, logistics The three country cases represent different approaches and appropriate legislation for carrying out e-commerce to supporting e-sales by rural enterprises, with diverging DQG IDFLOLWDWLQJ RQOLQH SD\PHQWV 5XUDO HFRPPHUFH UHVXOWV ,Q WKH 5HSXEOLF RI .RUHD DQG 7KDLODQG WKH will not be successful unless villagers have access to Governments have established e-commerce platforms the Internet and can deliver their products as well as IRU UXUDO FLWL]HQV WR VHOO WKHLU SURGXFWV ,Q &KLQD UXUDO safely receive payments. Additional policy measures e-commerce has been more grassroots driven, but used in China include tax breaks, preferential loans and supported indirectly by local governments. construction of distribution warehouses. 7KH H[SHULHQFH LQ WKH 5HSXEOLF RI .RUHD KDV EHHQ Second, rather than developing government- positive, with rural e-commerce sales continually owned websites, a more effective approach may rising. Success factors include close collaboration be to work in partnership with popular existing between the Government, telecentre operators e-commerce platforms and create a link to rural DQG UXUDO FLWL]HQV WR PDUNHW DQG VHOO JRRGV DQG products. This saves Governments from having to services. Supportive actions have involved training, devote resources to developing an e-commerce site helping sellers to create compelling advertisements, IURPVFUDWFK0RUHRYHUH[LVWLQJSRUWDOVDUHW\SLFDOO\ having the private sector develop a sophisticated more visible with a large client base. In Thailand, e-commerce portal and links to other online platforms government-developed platforms have suffered from in the country. This has been boosted by a relatively low visibility and limited maintenance. In China, by high level of online shopping by consumers and solid contrast, villagers linked up with existing sites with payment and delivery infrastructures. VXFFHVVIXOUHVXOWV,QWKH5HSXEOLFRI.RUHDDVZHOO The Thai experience has been less successful. Though an agreement was made to market rural products to the Government has established a number of telecentres the wider reach of a privately owned online shopping in rural areas, these have not been effectively leveraged site. IRU HFRPPHUFH 3ODWIRUPV GHYHORSHG WR VHOO JRRGV Third, Governments can endorse rural e-commerce and services have lacked the sophistication of private- portals to enhance trust among potential buyers and sector online shopping malls. They have hitherto not create economies of scale by uniting rural products been widely used, with payment and logistics being under a well-marketed government campaign. In the less than ideal, and there has not been a strong effort 5HSXEOLF RI .RUHD WKH *RYHUQPHQW FUHDWHG D OLWWOH WRHQFRXUDJHUXUDOFLWL]HQVWRSDUWLFLSDWH JUHHQPDQORJRDVVRFLDWHGZLWKLWV,19,/HFRPPHUFH In China, several villages have successfully exploited programme. In addition, Governments can raise the Internet to sell local products using the country’s the visibility of e-commerce through advertising leading e-commerce sites. In the two cases examined, (billboards, radio and television advertisements, the initiative to engage in e-commerce came from the Internet ads, and the like) to encourage consumers grassroots level. A positive side effect was the rise of WREX\RQOLQH&HUWLƄFDWLRQVIRUIRRGTXDOLW\RUJDQLF a supporting ecosystem of logistics, upstream crop processes and fair trade can also help to make UHYLWDOL]DWLRQDQGSURFHVVLQJDQGSDFNDJLQJLQGXVWULHV products more attractive. Here merchants may Though the Government was not directly involved in EHQHƄWIURPJRYHUQPHQWDVVLVWDQFH this development, it contributed by improving roads, )LQDOO\ *RYHUQPHQWV PD\ HQJDJH LQ WKH WUDLQLQJ RI EURDGEDQG LQIUDVWUXFWXUH DQG FHUWLƄFDWLRQ :LWK WKH villagers in how to leverage e-commerce tools. This biggest e-commerce market in the world, there is may include alerting them about popular e-commerce large demand online for rural products. Indeed, in sites, teaching them how to create compelling $OLSD\HVWDEOLVKHGDUXUDOEXVLQHVVXQLWWRUHDFK advertisements and stressing the importance of good non-e-commerce users in third- and fourth-tier cities quality and rapid delivery. Some farmers may be too  and in rural areas. busy or lack the inclination for Internet tasks. In this The three country cases indicate several ways in which case it may be necessary to involve intermediaries to Governments can contribute to the development of rural provide assistance. CHAPTER IV : E-COMMERCE BY SMALL AND RURAL ENTERPRISES IN DEVELOPING COUNTRIES 59

NOTES

1 6HHKWWSZZZDOH[DFRPWRSVLWHVFRXQWULHV.( DFFHVVHG$XJXVW 

 )OLSNDUWLVRQHRI,QGLDpVODUJHVWRQOLQHPDUNHWSODFHV,WKDG}PLOOLRQUHJLVWHUHGXVHUVLQVHHKWWSZZZ ƅLSNDUWFRPVSUHVV DFFHVVHG-XQH 

 6QDSGHDOFRP LV DOVR DPRQJ WKH WRS RQOLQH PDUNHWSODFHV LQ ,QGLD ZLWK PRUH WKDQ  PHUFKDQWV LQ  VHHKWWSZZZVQDSGHDOFRPLQIRIDT$ERXW6QDSGHDO DFFHVVHG-XQH 

4 6HHKWWSKHOSDOLH[SUHVVFRPWRSTXHVWLRQVFDQB,BVHOOBRQBDOLH[SUHVVKWPO DFFHVVHG}-DQXDU\ 

5 6HHKWWSZZZDOH[DFRPVLWHLQIRDOLH[SUHVVFRP DFFHVVHG-XQH 

 2QHRIWKHOHDGLQJJOREDOPDUNHWSODFHVIRUKDQGPDGHSURGXFWVZLWK}PLOOLRQPHPEHUVVHHKWWSVEORJHWV\ FRPQHZVQRWHVIURPFKDG DFFHVVHG-XQH 

 6HHKWWSZZZHQWUHSUHQHXUFRPDUWLFOH DFFHVVHG-XQH 

 5XVVLDQHFRPPHUFHVLWHGHDOLQJLQRQOLQHVDOHDQGGHOLYHU\RIIDVKLRQDSSDUHOVKRHVDFFHVVRULHVFRVPHWLFV IUDJUDQFHVDQGKRPHIXUQLVKLQJVZLWK}PLOOLRQXVHUVVHHKWWSFRPSDQ\ODPRGDUXDERXWKLVWRU\ DFFHVVHG }-XO\ 7UDIƄFGDWDDUHIURP$OH[DFRPDVRI-XQH

9 ([DPSOHVLQFOXGH%UD]LO KWWSZZZVKRSSLQJFRUUHLRVFRPEU WKH5HSXEOLFRI.RUHD KWWSZRUOGHSRVWJRNU), Saudi Arabia (KWWSZZZHPDOOFRPVD  DQG 7XQLVLD KWWSZZZHƅHXUVSRVWHWQ  DOO DFFHVVHG } -DQXDU\  

 6HHKWWSVZZZHODQFHFRPTVLWHVGHIDXOWƄOHVGRFV$,5$QQXDO,PSDFW5HSRUWSGIKWPO DFFHVVHG}-XQH 

11 6HHKWWSVZZZOLQNHGLQFRPFRPSDQ\HODQFH DFFHVVHG-XQH 

 In addition, these online marketplaces for services or digital goods offer online skill-training courses on technical WRSLFVZKLFKFRXOGEHDXVHIXOUHVRXUFHIRUGHYHORSLQJFRXQWU\PLFURVPDOODQGPHGLXPVL]HGHQWHUSULVHV

 6HHKWWSVZZZHODQFHFRPUFRQWUDFWRUVTUZDQGDFU\UZDQGD DFFHVVHG$XJXVW 

14 6HHKWWSZZZDPD]RQFRP&DUHHUV+RPHSDJHE"LH 87) QRGH  DFFHVVHG6HSWHPEHU 

15 See KWWSVHUYLFHVDPD]RQFRPVHOOLQJEHQHƄWVKWP"OG $=)662$$6 DFFHVVHG6HSWHPEHU 

 6HHKWWSZZZDPD]RQFRPJSKHOSFXVWRPHUGLVSOD\KWPO"QRGH,G  DFFHVVHG}6HSWHPEHU .

 6HH KWWSZZZDPD]RQFRPJSKHOSFXVWRPHUGLVSOD\KWPO"LH 87) QRGH,G  RXWVLGH (accessed }6HSWHPEHU 

 See KWWSSDJHVHED\FRPVHOOHULQIRUPDWLRQEXLOG\RXUEXVLQHVVRQOLQHJURZ\RXUVDOHVVHOORQOLQHLQWHUQDWLRQDOO\ index.html  DFFHVVHG$XJXVW 

19 6HHq:KHUHWRVHOOLQWHUQDWLRQDOO\r6HOOHU&HQWUHH%D\FRXN$XJXVWDYDLODEOHDWKWWSVHOOHUFHQWUHHED\ FRXNZKHUHWRVHOOLQWHUQDWLRQDOO\"FDW  DFFHVVHG}-DQXDU\ 

 0DJHQWRSURYLGHVVFDODEOHHFRPPHUFHVROXWLRQVVHHKWWSPDJHQWRFRPFRPSDQ\SUHVVURRPSUHVVUHOHDVHV PDJHQWRUHFRJQL]HGWRSSODWIRUPIDVWJURZLQJUHWDLOHUVLQWHUQHW DFFHVVHG-XQH 

 :RR&RPPHUFHLVDIUHHDQGRSHQVRXUFHHFRPPHUFHSOXJLQZLWKRYHU}PLOOLRQGRZQORDGVDVRIVHHKWWS www.woothemes.com/woocommerce/ DFFHVVHG-XQH 

 3UHVWD6KRS LV D IUHH RSHQVRXUFH HFRPPHUFH VRIWZDUH GHYHORSHG LQ )UDQFH DQG FODLPLQJ DOPRVW } PLOOLRQ GRZQORDGVDVRIVHHKWWSZZZSUHVWDVKRSFRP DFFHVVHG-XQH 

 See KWWSWRPUREHUWVKDZQHWDSULOHFRPPHUFHVXUYH\ DFFHVVHG}-DQXDU\ 

 )RXQGHGLQ9ROXVLRQFRP 8QLWHG6WDWHV SURYLGHVKRVWHGHFRPPHUFHVROXWLRQVZLWKRYHUVWRUHV DQG}ELOOLRQLQPHUFKDQGLVHVDOHVRQLWVSODWIRUPDVRIVHHKWWSZZZYROXVLRQFRPKLVWRU\(accessed }$XJXVW 

 ,QGLDEDVHGKRVWHGHFRPPHUFHVROXWLRQZLWKRYHUOLYHVWRUHVDVRIVHHKWWSZZZEXLOGDED]DDU FRP DFFHVVHG-XO\ 

 ,QGLDEDVHGHFRPPHUFHVROXWLRQZLWKRYHUFXVWRPHUVJOREDOO\VHHKWWSZZZPDUWMDFNFRPDERXWXVKWPO DFFHVVHG}-XO\  60 INFORMATION ECONOMY REPORT 2015

 6HHKWWSZZZLDPZLUHFRPHFRPPHUFHVDDVSODWIRUPVLQGLDFRPSDULVRQ DFFHVVHG}$XJXVW 

 9DULRXV DOWHUQDWLYH SD\PHQW VROXWLRQV FDQ EH VHDUFKHG RQOLQH VHH KWWSZZZVHDUFKHQJLQHMRXUQDOFRP WRSDOWHUQDWLYHVSD\SDO DFFHVVHG-XQH 

 (OHFWURQLFSD\PHQWVHUYLFHZLWKRYHU}PLOOLRQDFFRXQWKROGHUVWKDWVHUYHVRYHUEXVLQHVVHVDVRI see KWWSVZZZVNULOOFRPHQDERXWXV DFFHVVHG-XQH 

 (OHFWURQLFSD\PHQWVHUYLFHZLWKRYHU}PLOOLRQDFFRXQWVZRUOGZLGHDVRIVHHKWWSVZZZSD\SDOFRPNH webapps/mpp/about DFFHVVHG-XQH 

 3D\PHQWVHUYLFHZLWKPHUFKDQWVWKDWVXSSRUWVWUDQVDFWLRQVLQFRXQWULHVWKURXJKSD\PHQWPHWKRGV FXUUHQFLHVDQGODQJXDJHVVHHKWWSVZZZFKHFNRXWFRPDERXW DFFHVVHG}-XQH 

 0DQ\VPDOOEXVLQHVVHVGRQRWPHHWWKHFULWHULDHVWDEOLVKHGE\EDQNVIRUH[DPSOHLQWHUPVRIWKHOHQJWKRIWLPH WKDWWKHEXVLQHVVKDVEHHQRSHUDWLQJRULQWHUPVRIFUHGLWZRUWKLQHVVVHHIRUH[DPSOHKWWSZZZHQWUHSUHQHXU FRPDUWLFOH DFFHVVHG-XQH 

 See KWWSZZZJRRJOHFRPZDOOHWVHQGPRQH\ DFFHVVHG6HSWHPEHU 

 6HHFRXQWULHVDQGFXUUHQFLHVVXSSRUWHGE\$PD]RQFXUUHQF\FRQYHUWHUIRUVHOOHUVE\$PD]RQDYDLODEOHDWKWWS ZZZDPD]RQFRPJSKHOSFXVWRPHUGLVSOD\KWPO"QRGH,G  DFFHVVHG6HSWHPEHU 

 See KWWSVZZZSD\SDOPHGLDFRPDERXW DFFHVVHG}-DQXDU\ 

 3D\3DOpVOLVWRIFRXQWULHVHFRQRPLHVDOVRLQFOXGHVPDQ\WKDWDUHQRW0HPEHU6WDWHVRIWKH8QLWHG1DWLRQVVXFKDV WKH+RO\6HHWKH%ULWLVK9LUJLQ,VODQGV+RQJ.RQJ &KLQD DQG7DLZDQ3URYLQFHRI&KLQD

 ,Q8QLWHG1DWLRQV0HPEHU6WDWHV3D\3DOLVQRWDYDLODEOHLQFOXGLQJ%DQJODGHVK*KDQDDQG3DNLVWDQDVZHOO DVVL[FRXQWULHVWKDWDUHXQGHU8QLWHG6WDWHVWUDGHHPEDUJR &XEDWKH'HPRFUDWLF3HRSOHpV5HSXEOLFRI.RUHDWKH ,VODPLF5HSXEOLFRI,UDQ0\DQPDUWKH6XGDQDQGWKH6\ULDQ$UDE5HSXEOLF 

 3D\3DODFFRXQWW\SHVVHHKWWSVZZZSD\SDOFRPXVZHEDSSVKHOSFHQWHUKHOSKXEDUWLFOH"VROXWLRQ,G )$4 DFFHVVHG}-DQXDU\ 

 $VHUYLFHWKDWDVRIWKHHQGRIZDVRQO\DYDLODEOHLQVHOHFWHGGHYHORSHGFRXQWULHV6WULSH VWULSHFRP VXSSRUWV SD\PHQWLQZHOORYHUFXUUHQFLHVGHSHQGLQJRQWKHFUHGLWFDUGXVHG

 ,QIRUPDWLRQIURPWKHUHVSHFWLYHFRPSDQ\ZHEVLWHVDFFHVVHGRQ$XJXVW

41 $QHFRPPHUFHSD\PHQWJDWHZD\DXWKRUL]HVFUHGLWFDUGSD\PHQWVDQGSURFHVVHVWKHPVHFXUHO\ZLWKDXVHUpV PHUFKDQWDFFRXQW(YHU\SD\PHQWPDGHZLWKDFUHGLWFDUGLQYROYHVWKHWUDQVIHURIIXQGVWRDPHUFKDQWDFFRXQW which the seller holds directly with a bank. The merchant has full responsibility for the transactions that occur with its account, and each bank has its own terms of service to which account holders must adhere.

 ,QWHUYLHZZLWK7XQGH.HKLQGHIRUPHU0DQDJLQJ'LUHFWRURI-XPLD1LJHULD

 ,QWHUYLHZZLWK5LWHVK'RVKL&KLHI([HFXWLYH2IƄFHU1DNHG3L]]D.HQ\D

44 q$OORZUHFHLYLQJPRQH\WR8NUDLQHWKURXJK3D\3DOrFKDQJHRUJ2FWREHUVHHKWWSZZZFKDQJHRUJ HQ*%VHDUFK"XWI (& T 3D\3DO8NUDLQe DFFHVVHG}-DQXDU\ 

45 q(QDEOHUHFHLYLQJPRQH\WR6UL/DQNDWKURXJK3D\3DOrFKDQJHRUJ2FWREHUVHHKWWSVZZZFKDQJH RUJSHQDEOHUHFHLYLQJPRQH\WRVULODQNDWKURXJKSD\SDO"ODQJ HQ DFFHVVHG)HEUXDU\ 

 6HHq.HQ\DpV(TXLW\%DQNSDUWQHUVZLWK3D\3DOrBalancing Act-XO\DYDLODEOHDWKWWSZZZEDODQFLQJDFW DIULFDFRPQHZVHQLVVXHQRPRQH\WUDQVIHUNHQ\DVHTXLW\EDQNSHQ DFFHVVHG}-DQXDU\ 

 &OLFN%'FRP %DQJODGHVK 2FWREHUVHHKWWSZZZFOLFNEGFRP DFFHVVHG}-DQXDU\ 

 $NKRQLFRP %DQJODGHVK 2FWREHUVHHKWWSZZZDNKRQLFRP DFFHVVHG}-DQXDU\ 

49 E.DVKFRP %DQJODGHVK 2FWREHUVHHKWWSZZZENDVKFRP DFFHVVHG}-DQXDU\ 

 $QDGPLQLVWUDWLYHYLOODJHKDVDQRUJDQL]LQJFRPPLWWHHDQGLVUHVSRQVLEOHIRUDJURXSRIQDWXUDOYLOODJHV

51 q7DREDRIRVWHUVHFRPPHUFHYLOODJHVDFURVV&KLQDrWant China Times}-DQXDU\

 q6XLFKDQJVWULYHVIRUHFRPPHUFHrGBTIMES2FWREHUVHHKWWSJEWLPHVFRPEXVLQHVVVXLFKDQJVWULYHV HFRPPHUFHVXFFHVV DFFHVVHG}-DQXDU\  CHAPTER IV : E-COMMERCE BY SMALL AND RURAL ENTERPRISES IN DEVELOPING COUNTRIES 61

 7DREDRFRPKDVEHHQXVHGE\PDQ\UXUDOHQWHUSULVHVWRVWDUWRQOLQHEXVLQHVVHV,Q-XQSX9LOODJH*XDQJGRQJ 3URYLQFHIRUH[DPSOHPRUHWKDQRQOLQHVKRSVKDGDOUHDG\EHHQVHWXSLQ6HSWHPEHUE\YLOODJHUVZLWK DWXUQRYHUUHDFKLQJ‚}PLOOLRQ }PLOOLRQ VHHq&DVKFRZ7DREDRrThe Economist}0D\DYDLODEOHDW KWWSZZZHFRQRPLVWFRPQHZVFKLQDRQHVPDOOKDPOHWWHDFKLQJSHRSOHKRZVHOORQOLQHFDVKFRZ taobao DFFHVVHG}-DQXDU\ DQG*XLKDQJHWDO  

54 6HH KWWSHQJQLDRUNUHQJOLVKEEVERDUGBYLHZDVS"%RDUG,'  LG  2UGHU  VHD UFKBWDUJHW NH\ZRUG )ODJ  DFFHVVHGRQ}-DQXDU\ 

55 6HHKWWSZZZLQYLORUJHQJOLVKDFWLRQGR"XUO HQJOLVKLQWURGXFWLRQDERXWBLQYLO DFFHVVHG)HEUXDU\ 

 6HH 8QLWHG 1DWLRQV 'HSDUWPHQW RI (FRQRPLF DQG 6RFLDO $IIDLUV  8QLWHG 1DWLRQV 3XEOLF 6HUYLFH $ZDUGV :LQQHUV DYDLODEOH DW KWWSXQSDQXQRUJLQWUDGRFJURXSVSXEOLFGRFXPHQWVXQGSDGPXQSDQSGI DFFHVVHG}-DQXDU\ 

 'DWD IURP 838 VHH KWWSSOVXSXLQWSOVDSVVSBUHSRUWPDLQ"SBODQJXDJH $1 SBFKRLFH %52:6( DFFHVVHG })HEUXDU\ 

 6HHq+RPHGHOLYHU\LVVR=DORUDQRZRIIHUVFRQYHQLHQFHVWRUHSLFNXSVLQ7KDLODQGrTechinAsia}-DQXDU\  DYDLODEOH DW KWWSZZZWHFKLQDVLDFRPKRPHGHOLYHU\]DORUDRIIHUVFRQYHQLHQFHVWRUHSLFNXSV WKDLODQG DFFHVVHG}-DQXDU\ 

59 6HHKWWSZZZFRWKZKDWLVDVS[ DFFHVVHG}-DQXDU\ 

 ,QWHUYLHZLQ'HFHPEHUZLWK0U.DPROUDW,QWDUDWDWRI6XNKRWKDL7KDPPDWKLUDW2SHQ8QLYHUVLW\DQGFRQVXOWDQW WR0,&77KDL7HOHFHQWUHSURMHFW

 Derived from Alexa.com website rankings.

 6HH q7KDL DUWLVDQV IURP WKH 2QH 7DPERQ2QH 3URGXFW SURMHFW XVH VRFLDO PHGLD WR ERRVW VDOHVr $VLD 3DFLƄF 7HOHFHQWUH 1HWZRUN DYDLODEOH DW KWWSZZZDSWQDVLDVXFFHVVVWRULHVWKDLDUWLVDQVIURPWKHRQHWDPERQ RQHSURGXFWRWRSSURMHFWXVHVRFLDOPHGLDWRERRVWVDOHV DFFHVVHG}-DQXDU\ 

 6HHq$OLSD\DLPVWREULQJHFRPPHUFHWRUXUDO&KLQHVHrCHINACSR'HFHPEHUDYDLODEOHDWKWWSZZZ FKLQDFVUFRPHQDOLSD\DLPVWREULQJHFRPPHUFHWRUXUDOFKLQHVH DFFHVVHG}-DQXDU\ 

MAPPING THE LEGAL LANDSCAPE 5 FOR E-COMMERCE

Security and trust are fundamental for creating an environment conducive to e-commerce. Online fraud and data breaches are growing concerns for both consumers and enterprises, requiring adequate legal responses at national and international levels. Against this background, this chapter examines key legal issues that need to be addressed to facilitate e-commerce and to make interaction on the Internet more trustworthy in general. Special attention is given to e-commerce legal frameworks on electronic transactions, consumer protection, privacy and data protection, and cybercrime. This chapter presents the result of UNCTAD research into the current state of e-commerce laws in these areas, highlighting progress made and the remaining gaps. It discusses possible options for achieving effective implementation and enforcement of the relevant laws and makes recommendations aimed especially at facilitating cross-border transactions. The analysis draws substantially on UNCTAD’s interaction with regional groups in developing countries, as well as with other partner organizations and experts. 64 INFORMATION ECONOMY REPORT 2015

A. LEGAL ISSUES AND 5HVHDUFKE\81&7$'VKRZVWKDWWKHDYDLODELOLW\RI CHALLENGES FOR relevant laws in four legal areas that are essential IRU LQFUHDVLQJ XVHUVp FRQƄGHQFH LQ HFRPPHUFH t E-COMMERCE e-transaction, consumer protection, privacy and data protection, and cybercrime – is generally high in While the adoption of laws may not be a prerequisite developed countries, but inadequate in many other for e-commerce to commence, they are essential SDUWVRIWKHZRUOG WDEOH}9  for its sustainable growth. A supportive legal Among the four areas, adoption is generally the environment is crucial to create trust online and to highest for e-transaction laws and the lowest for laws secure electronic interactions between enterprises, SURWHFWLQJFRQVXPHUVRQOLQH7KLVPD\SDUWO\UHƅHFW FLWL]HQVDQGSXEOLFDXWKRULWLHV7KHH[WHQWWRZKLFK the unavailability of data for some countries. As the regions and countries have relevant frameworks GDWD UHSRUWHG LQ WDEOH} 9 DQG LQ DQQH[   ZLOO EH in place, as well as whether such frameworks regularly updated, member States are encouraged to are effectively implemented and enforced, varies provide any missing information on their e-commerce considerably. However, there is no ideal legal legislation to the UNCTAD secretariat. landscape. In determining how to shape it, consideration should be given to existing laws and 7KHSDWWHUQVYDU\E\UHJLRQ)RUH[DPSOHLQ&HQWUDO the peculiarities of the national environment, as America, seven out of eight countries have consumer well as international and regional legal frameworks protection legislation in place, but most lack laws where they exist. Some countries have enacted related to data protection and cybercrime. The HFRPPHUFHVSHFLƄF UHJXODWLRQ ZKLOH RWKHUV KDYH subregion with the weakest coverage of e-commerce amended existing legislation or developed principles OHJLVODWLRQ LV 0LGGOH $IULFD ZKHUH RQO\ WZR RXW RI or guidelines as a minimum requirement. It is equally nine countries have laws related to e-transactions, possible to observe overlaps between legal regimes. consumer protection online and data protection, and In mapping the global e-commerce legal landscape, only one has cybercrime legislation in place. UNCTAD’s focus has been on the legislation that Governments of developing countries face various LVVSHFLƄFDOO\GHGLFDWHGWRHFRPPHUFHDVZHOODV FKDOOHQJHV ZKHQ VHHNLQJ WR DGRSW ƄJXUH} 9  legislation adapted to the online environment. DQG HQIRUFH ƄJXUH} 9  HFRPPHUFH OHJLVODWLRQ Three general comments can be made in terms of Laws are often adopted too late by Governments WKHFRQWH[WRIWKLVFKDSWHU)LUVWWKHSKUDVHqOHJDO attempting to keep up with dynamic and ODQGVFDSHrLVXVHGWRHQFRPSDVVDEURDGUDQJHRI XQSUHGLFWDEOH} WHFKQRORJLFDO DGYDQFHPHQWV %\ WKH different means of regulating behaviour, including time the laws are passed they are often obsolete, public law measures (for example, statutes, decrees and the activities that they seek to regulate may have and regulations), private law agreements (for FKDQJHG 5HJLRQDO HIIRUWV WR FUHDWH KDUPRQL]HG example, contracts), as well as standards, codes principles are often even more delayed, resulting in of practice and other non-binding, self-regulatory variations of legal frameworks among nation States approaches. Second, when referring to the ZLWKLQ SDUWLFXODU UHJLRQV )RU LQVWDQFH WKH $IULFDQ enforcement of laws, a similarly broad approach is 8QLRQ&RQYHQWLRQRQ&\EHU6HFXULW\DQG3HUVRQDO taken, for which determination before a court of law 'DWD 3URWHFWLRQ ZDV DGRSWHG RQO\ LQ -XQH  LVWKHXOWLPDWHDQGUDUHRXWFRPH(QIRUFHPHQWFDQ )XUWKHUPRUH LQ D ELG WR PLWLJDWH FRVWV WUDGLWLRQDO also arise through the use of innovative alternative institutions that lack capacity are often given a new e-commerce mandate without the provision dispute resolution forums, as well as compliance of additional resources. This frequently results in driven by corporate social responsibility policies the new mandate being relegated to the non-core or concerns about adverse publicity. Third, legal functions of the institution. measures generally target different parts of the e-commerce transaction value chain in pursuit of Surveys by UNCTAD of government representatives different objectives. So, for example, consumer LQFRXQWULHVLQ$IULFD$VLDDQG/DWLQ$PHULFDDQG protection measures against payment fraud can the Caribbean1 point to the need to build awareness engender trust in consumers, while establishing and knowledge among lawmakers and the judiciary legal certainty can encourage foreign investment in in order to formulate informed policies and laws in the domestic service providers. area of e-commerce and to enforce them effectively. CHAPTER V : MAPPING THE LEGAL LANDSCAPE FOR E-COMMERCE 65

7DEOH}9 6KDUHRIHFRQRPLHVZLWKUHOHYDQWHFRPPHUFHOHJLVODWLRQE\UHJLRQ SHUFHQW

Countries E-transaction Consumer protection 3ULYDF\DQGGDWD Cybercrime laws QXPEHU  ODZV  ODZV  SURWHFWLRQODZV   Developed economies      Developing economies Africa      Eastern Africa 18 38.9 16.7 27.8 50.0 Middle Africa 9 22.2 22.2 22.2 11.1 Northern Africa 6 83.3 33.3 50.0 66.7 Southern Africa 5 60.0 40.0 20.0 40.0 Western Africa 16 50.0 56.3 62.5 37.5 Asia and Oceania      Eastern Asia 4 75.0 50.0 25.0 50.0 South-Eastern Asia 11 81.8 81.8 54.5 72.7 Southern Asia 9 77.8 22.2 44.4 66.7 Western Asia 12 91.7 33.3 25.0 58.3 Oceania 12 41.7 8.3 0.0 33.3 Latin America and the Caribbean      Central America 8 75.0 87.5 37.5 37.5 South America 12 83.3 75.0 66.7 75.0 Caribbean 13 84.6 15.4 38.5 69.2 Transition economies      All economies     

Source: 81&7$'VHHDQQH[

)LJXUH}9 &KDOOHQJHVWRWKHHQDFWPHQWRIHFRPPHUFHOHJLVODWLRQLQVHOHFWHGGHYHORSLQJFRXQWULHVt  3HUFHQWDJHRIUHVSRQGHQWV

Lack of skills or training for policy- or lawmakers

Lack of skills or training for members of parliament E-transactions

Funding issues Consumer protection Privacy

Inadequate ICT infrastructure Cybercrime

Lack of skills or resources in setting up a national certiƂcation authority for digital signatures

0 20406080100

Source: UNCTAD. 66 INFORMATION ECONOMY REPORT 2015

)LJXUH}9 &KDOOHQJHVWRWKHHQIRUFHPHQWRIHFRPPHUFHOHJLVODWLRQLQVHOHFWHGGHYHORSLQJFRXQWULHVt  3HUFHQWDJHRIUHVSRQGHQWV

Lack of skills or training for police or law-enforcement agencies

Lack of skills or training for the courts or regulators

Funding issues E-transactions Consumer protection Privacy Inadequate ICT infrastructure Cybercrime

Inconsistent court rulings or court interpretation

DifƂculties dealing with cross-border issues

0 102030405060

Source: UNCTAD.

Three quarters of the representatives reported B. COMPATIBILITY OF GLIƄFXOWLHV LQ XQGHUVWDQGLQJ OHJDO LVVXHV UHODWHG WR E-TRANSACTION SULYDF\}SHUFHQWWRF\EHUFULPHDQGRYHU}SHU cent to the two other legal areas. Similarly, between LAWS NEEDED FOR half and two thirds of them noted that a lack of CROSS-BORDER understanding among parliamentarians can delay the E-COMMERCE DGRSWLRQRIUHOHYDQWODZV2WKHUFKDOOHQJHVLQFOXGHG the need for informed regulators and for training law A prerequisite for conducting commercial transactions HQIRUFHPHQW ERGLHV DV ZHOO DV ƄQGLQJ VXIƄFLHQW RQOLQHLVWRUHFRJQL]HWKHOHJDOHTXLYDOHQFHEHWZHHQ resources to create effective legal frameworks and paper-based and electronic forms of exchange, which QDWLRQDO FHUWLƄFDWLRQ DXWKRULWLHV )LQDOO\ VHYHUDO LVWKHJRDORIHWUDQVDFWLRQODZV(WUDQVDFWLRQODZV respondents expressed concerns about dealing have already been adopted by 145 countries, of which with cross-border e-commerce, notably in the area  DUH GHYHORSLQJ FRXQWULHV ƄJXUH} 9  $QRWKHU of e-transactions and consumer protection. KDYHSURGXFHGGUDIWOHJLVODWLRQLQWKLVDUHD7KDW OHDYHVGHYHORSLQJFRXQWULHVZLWKQRHWUDQVDFWLRQ (FRPPHUFH LPSDFWV RQ RWKHU DUHDV RI ODZ WKDQ laws and 19 for which data are lacking. While four out those highlighted in this chapter, such as taxation, intellectual property, and postal and delivery services. RIƄYHFRXQWULHVLQ$VLDDQGLQ/DWLQ$PHULFDDQGWKH &DULEEHDQKDYHDGRSWHGVXFKODZVWKRVHLQ(DVWHUQ )XUWKHUPRUH QHZ WUHQGV LQ HFRPPHUFH VXFK DV mobile payments and other innovative payment DQG0LGGOH$IULFDDUHODJJLQJEHKLQG systems (see chapter III) may accentuate the need 0DQ\QDWLRQDOODZVLQWKLVDUHDKDYHEHHQLQƅXHQFHG for reviewing existing payments regulations. by the legislative standards prepared by the United CHAPTER V : MAPPING THE LEGAL LANDSCAPE FOR E-COMMERCE 67

Nations Commission on International Trade Law and the use of automated message systems. Similarly, 81&,75$/ ,WV0RGHO/DZRQ(OHFWURQLF&RPPHUFH most e-transaction laws do not deal with international   81&,75$/   KDV EHHQ HQDFWHG LQ PRUH aspects of e-commerce, such as choice of law, which WKDQMXULVGLFWLRQV0HDQZKLOHMXULVGLFWLRQVKDYH LVRQHRIWKHSRWHQWLDOLVVXHVRIFRQƅLFWLQFURVVERUGHU EDVHGWKHLUOHJLVODWLRQRQWKH&RPPLVVLRQpV0RGHO/DZ HFRPPHUFH 0RUHRYHU ZKLOH VHYHUDO ODZV KDYH D RQ (OHFWURQLF 6LJQDWXUH   81&,75$/   provision on cross-border recognition of e-signatures, Additionally, the United Nations Convention on the Use most of them are not implemented as they require a RI(OHFWURQLF&RPPXQLFDWLRQVLQ,QWHUQDWLRQDO&RQWUDFWV mutual recognition system that can be burdensome to (&&  KDV EHHQ VLJQHG E\  6WDWHV DQG DFFHGHG LPSOHPHQW &DVWHOODQL  WR RU UDWLƄHG E\ VL[ 81&,75$/  4 7KH (&& applies only at the international level and only to the Second, there is variation in terms of national six States parties.5 However, several other States have implementation of fundamental principles, notably incorporated some or all of the substantive provisions WHFKQRORJ\QHXWUDOLW\LQWKHXVHRIHVLJQDWXUHV0DQ\ RIWKH(&&LQWKHLUQDWLRQDOODZV FRXQWULHVKDYHHQDFWHGWHFKQRORJ\VSHFLƄFOHJLVODWLRQ based on e-signatures, such as public key infrastructure -XULVGLFWLRQV WKDW KDYH DGRSWHG WKH 0RGHO /DZV RU 3., 151 This applies, for example, to some member WKH(&&VKDUHFRPPRQHOHPHQWVLQWKHLUHOHFWURQLF States of the Commonwealth of Independent States contracting laws, helping to facilitate cross-border DQG RI (&2:$6 Commonwealth of Independent e-commerce. They embrace the principles of States member States are required to set up technology neutrality, non-discrimination of electronic certifying bodies that create digital signatures based FRPPXQLFDWLRQV DQG IXQFWLRQDO HTXLYDOHQFH %XW on cryptography. Some laws envisage that only despite progress in the adoption of e-transaction WKHVHGLJLWDOVLJQDWXUHVZLOOEHUHFRJQL]HGDVKDYLQJ laws, three major issues remain. a mandatory force. However, there may be a trend )LUVW VHYHUDO HWUDQVDFWLRQ ODZV DGGUHVV RQO\ towards more technology-neutral e-signature laws. the electronic signature (e-signature) component )RULQVWDQFHWKH5XVVLDQ)HGHUDWLRQLQDPHQGHG (authentication) without addressing other important LWV ODZ WR UHFRJQL]H DOO IRUPV RI HVLJQDWXUHV DQG LW terms of a contract in electronic form. They are silent DOVR DGRSWHG WKH (&& ZKLFK HQDEOHV FURVVERUGHU on issues such as the time and place of dispatch and recognition of e-signatures on a technology-neutral receipt, acknowledgment of receipt, party location basis.

)LJXUH}9 :RUOGPDSRIHWUDQVDFWLRQODZV

Legend 'DUNEOXHtFRXQWULHVZLWKOHJLVODWLRQ 9LROHWtFRXQWULHVZLWKQROHJLVODWLRQ Light blue – countries with draft legislation Grey – countries with no data Source: 81&7$'VHHDQQH[ 68 INFORMATION ECONOMY REPORT 2015

Laws often require the establishment of a national DGRSWHG WKH 5HJXODWLRQ RQ (OHFWURQLF ,GHQWLƄFDWLRQ FHUWLƄFDWLRQ DXWKRULW\ +RZHYHU GXH WR WKH KXPDQ DQG7UXVW6HUYLFHVIRU(OHFWURQLF7UDQVDFWLRQV which DQG ƄQDQFLDO FRVWV LQYROYHG FHUWLƄFDWLRQ DXWKRULWLHV applies the principle of technology neutrality by avoiding especially in developing countries, have sometimes UHTXLUHPHQWV WKDW FRXOG RQO\ EH PHW E\ D VSHFLƄF not been set up, or have been set up only after an technology. This regulation also sets conditions for extended period of time. In such cases, e-transactions PXWXDOUHFRJQLWLRQRIHOHFWURQLFLGHQWLƄFDWLRQLQDOHJDO may lack legal recognition when the intervention LQVWUXPHQW WKDW LV GLUHFWO\ DSSOLFDEOH LQ DOO (XURSHDQ RI WKH QDWLRQDO FHUWLƄFDWLRQ DXWKRULW\ LV UHTXLUHG WR 8QLRQPHPEHU6WDWHV$QRWKHUH[DPSOHLVWKH$6($1 give legal validity to the transaction. In addition, a LQ ZKLFK PHPEHU 6WDWHV UHFRJQL]H GLIIHUHQW W\SHV RI requirement to use cryptographic systems when VLJQDWXUHV WDEOH}9  conducting e-commerce or e-government operations The third issue concerns the lack of capacity regarding can represent a barrier to online transactions. It could, WKH HQIRUFHPHQW RI HWUDQVDFWLRQ ODZV -XGJHV DQG for example, hinder foreign bidders from participating practitioners often have limited knowledge of and in public procurement, unless legal recognition of the H[SHULHQFH ZLWK HWUDQVDFWLRQV ƄJXUHV 9DQG 9  UHOHYDQWIRUHLJQ3.,KDVEHHQHVWDEOLVKHG As a result, and especially in developing countries, (YHQLQFRXQWULHVWKDWKDYHDGRSWHGSURYLVLRQVEDVHG companies may be reluctant to embrace the use of RQ81&,75$/RURWKHUXQLIRUPWH[WVYDULDWLRQVH[LVW electronic means. A decision illustrating the challenges posing challenges for both domestic and cross- for both legislators and judges when departing from border e-commerce. Different e-transaction laws uniform texts based on international best-practice provide different standards for what constitutes PRGHOVLVSURYLGHGLQER[9 DQ HVLJQDWXUH 7KH FDVH RI WKH (XURSHDQ 8QLRQ is illustrative. Its member States were required to C. COVERAGE OF LPSOHPHQWWKH(XURSHDQ8QLRQ'LUHFWLYH(& CONSUMER RQD&RPPXQLW\)UDPHZRUNIRU(OHFWURQLF6LJQDWXUHV which established the legal framework for e-signatures PROTECTION ONLINE DQGFHUWLƄFDWLRQVHUYLFHVWREHOHJDOO\UHFRJQL]HGZLWKLQ IS PATCHY DQGDFURVV(XURSHDQ8QLRQPHPEHU6WDWHV+RZHYHU as the national regimes adopted to implement the Consumer policy seeks to address imbalances 'LUHFWLYH ZHUH QRW XQLIRUP WKH (XURSHDQ 3DUOLDPHQW between businesses and consumers in all forms DQG WKH &RXQFLO RI WKH (XURSHDQ 8QLRQ LQ -XO\  of commerce by ensuring that consumers are

7DEOH}9 7\SHVRIHVLJQDWXUHVUHFRJQL]HGE\ODZLQ$6($1PHPEHU6WDWHV

Only signatures $OOOHJDOVLJQDWXUHVEXWDGYDQFHGTXDOLƂHG Only signatures are associated with legal associated All legal presumptions, while simple DGYDQFHG signatures ZLWKDVSHFLƂF signatures are not TXDOLƂHG technology signatures qWZRWLHUDSSURDFKr HJ3., Brunei Darussalam X Cambodia Indonesia X Lao People’s Democratic X Republic Malaysia X Myanmar X Philippines X Singapore X Thailand X Viet Nam X

Source: 81&7$' D  CHAPTER V : MAPPING THE LEGAL LANDSCAPE FOR E-COMMERCE 69

adequately protected against misleading, fraudulent In terms of regional patterns, the incidence of DQG XQIDLU FRPPHUFLDO SUDFWLFHV HPSRZHUHG consumer protection legislation in Africa is particularly WKURXJK DZDUHQHVV DQG HGXFDWLRQ DQG SURYLGHG ORZ2QO\RIWKH$IULFDQFRXQWULHVKDYHDGRSWHG with effective redress when problems arise. Given the such laws. The coverage is higher in Latin America with nature of the Internet, where important information on RXWRIWKHFRXQWULHVKDYLQJUHOHYDQWOHJLVODWLRQ the seller (such as identity, location and credibility) can LQSODFH)RU2FHDQLDDQGPRVWWUDQVLWLRQHFRQRPLHV easily be concealed, and where complex and lengthy data on the state of consumer protection legislation terms and conditions are used that consumers may could not be obtained. not be able to access easily or in a timely manner, &URVVERUGHU WUDQVDFWLRQV DFFRXQW IRU D VLJQLƄFDQW information asymmetry is accentuated in the case of share of e-commerce in a number of developing e-commerce. Consumers are more vulnerable online countries (chapter II), underlining the importance of to deceptive and fraudulent activities. Consumer ensuring that online shoppers are protected for both protection laws can also help businesses engaged domestic and cross-border purchases. Differences in in e-commerce to clarify the requirements of doing the way countries adopt relevant provisions can hamper business online within a particular jurisdiction. cross-border trade. These may be related to the rights Therefore, consumer laws, policies and regulations and obligations of consumers and businesses, what may at the same time outline consumers’ rights DUHWREHFRQVLGHUHGDFFHSWDEOH}WHUPVDQGFRQGLWLRQV and business practices to be expected online, limit disclosure obligations and effective international fraudulent and misleading commercial conduct and redress mechanisms. help businesses develop self-regulatory regimes 2(&'D  ,QWKH(XURSHDQ8QLRQIRUH[DPSOHHQWHUSULVHVKDYH 'HVSLWHWKHLPSRUWDQFHRIFRQVXPHUFRQƄGHQFHIRU WRRSHUDWHZLWKGLIIHUHQWVHWVRIQDWLRQDOUXOHVIRU conducting cross-border trade. They therefore need %&HFRPPHUFH VHHFKDSWHU, WKHJOREDOPDSRI consumer protection legislation indicates that many to identify the provisions of the applicable laws of developing and transition economies still lack laws particular countries, and assume the costs associated with translation, legal advice and adaptation of LQ WKLV DUHD ƄJXUH} 9  2XW RI WKH } FRXQWULHV IRU ZKLFK GDWD DUH DYDLODEOH  RI ZKLFK  DUH contracts. This adds costs, complexity and legal developing or transition economies) have adopted XQFHUWDLQW\,Q D  VXUYH\ RI FURVVERUGHU WUDGH consumer protection legislation that relates to } SHU FHQW RI FRQVXPHUV VDLG WKDW XQFHUWDLQW\ HFRPPHUFH,QDVPDQ\DVFRXQWULHVLWKDVQRW about their rights had discouraged them from buying been possible to obtain data, however. This may IURP DQRWKHU (XURSHDQ 8QLRQ FRXQWU\ $ WKLUG RI suggest that consumer protection online has not the consumers surveyed said they would consider been fully addressed.9 EX\LQJ RQOLQH IURP DQRWKHU (XURSHDQ 8QLRQ FRXQWU\ LIXQLIRUP(XURSHDQUXOHVDSSOLHGEXWRQO\}SHUFHQW Box V.1. MCC Industrial Sales Corporation versus DFWXDOO\GLG (XURSHDQ&RPPLVVLRQ 7RWU\WR Ssangyong Corporation UHPHG\WKLVVLWXDWLRQWKH(XURSHDQ&RPPLVVLRQKDV SURSRVHGD&RPPRQ(XURSHDQ6DOHV/DZ This law In the case of MCC Industrial Sales Corporation would give traders the option to sell their products to versus Ssangyong Corporation 2FWREHU WKH 3KLOLSSLQHV 6XSUHPH &RXUW IRXQG WKDW WKH 3KLOLSSLQH FLWL]HQV LQ DQRWKHU PHPEHU 6WDWH RQ WKH EDVLV RI D e-commerce legislation did not include coverage of single set of contract law rules which would stand as fax messages as the legislation had used the words an alternative alongside the national contract laws. qHOHFWURQLF GDWD PHVVDJHr UDWKHU WKDQ WKH WHUP qGDWD 3DUWLHV WR D FURVVERUGHU VDOHV FRQWUDFW DQ\ZKHUH PHVVDJHr WKDW LV XVHG LQ WKH 81&,75$/ 0RGHO /DZ LQWKH(XURSHDQ8QLRQZRXOGEHDEOHWRFKRRVHE\ RQ (OHFWURQLF &RPPHUFH 7KH 3KLOLSSLQHV ODZ KDG H[SUHVVDJUHHPHQWWRDSSO\WKH&RPPRQ(XURSHDQ also removed references to example technologies, Sales Law. VXFK DV qHOHFWURQLF GDWD LQWHUFKDQJH WHOHJUDP WHOH[ RU WHOHFRS\r WKDW DUH LQFOXGHG LQ WKH 0RGHO /DZ 7KH (IIHFWLYH HQIRUFHPHQW IRU FRQVXPHUV LV JHQHUDOO\ D Supreme Court therefore interpreted that these changes FKDOOHQJHQRWOHDVWVLQFH%&HFRPPHUFHQRUPDOO\ were a deliberate attempt to restrict the e-commerce involves low-value transactions and as such court legislation to purely electronic messages such as e-mail. actions are too costly. Cross-border enforcement has Source: 81&7$' D  the added challenge of jurisdiction and applicable law issues as well as of requiring cooperation between 70 INFORMATION ECONOMY REPORT 2015

)LJXUH}9 :RUOGPDSRIODZVDGGUHVVLQJFRQVXPHUSURWHFWLRQRQOLQH

Legend 'DUNEOXHtFRXQWULHVZLWKOHJLVODWLRQ 9LROHWtFRXQWULHVZLWKQROHJLVODWLRQ Light blue – countries with draft legislation Grey – countries with no data Source: 81&7$'VHHDQQH[ national enforcement agencies.11 Some national conduct for businesses using their platforms. Some authorities have set up semi-formal cooperation platforms employ mechanisms that may affect a mechanisms and networks to serve as non-legal, seller’s reputation, such as trust marks or customer political channels of cooperation. UHYLHZERDUGV(QIRUFHPHQWYLDSD\PHQWPHFKDQLVPV )RU H[DPSOH WKH ,QWHUQDWLRQDO &RQVXPHU 3URWHFWLRQ LV DQRWKHU RSWLRQ LQ VRPH GHYHORSHG FRXQWULHV )RU DQG (QIRUFHPHQW 1HWZRUN ,&3(1  LV D QHWZRUN RI H[DPSOHLQWKH8QLWHG.LQJGRPFUHGLWFDUGFRPSDQLHV public authorities involved in the enforcement of fair are jointly and severally liable with sellers to repay trade practice laws and other consumer protection certain payments made via credit card.14 DFWLYLWLHV FRPSULVHG RI  PHPEHU FRXQWULHV DQG The main international reference frameworks for the  RUJDQL]DWLRQV LQFOXGLQJ  GHYHORSLQJ FRXQWULHV protection of consumers online are the Guidelines Its main objective is to identify ways to prevent IRU&RQVXPHU3URWHFWLRQLQWKH&RQWH[WRI(OHFWURQLF and redress deceptive marketing practices in an &RPPHUFH 2(&'*XLGHOLQHV  2(&'E DQGWKH LQWHUQDWLRQDO FRQWH[W ,&3(1 KDV GHYHORSHG WKH 8QLWHG 1DWLRQV *XLGHOLQHV RQ &RQVXPHU 3URWHFWLRQ econsumer.gov initiative to enhance consumer 81*&3  8QLWHG 1DWLRQV   ZKLFK DUH ERWK SURWHFWLRQDQGFRQVXPHUFRQƄGHQFHLQHFRPPHUFH being revised (see below). 7KH ZHEVLWH SHUPLWV LQGLYLGXDOV WR ƄOH FRPSODLQWV RQOLQHDWDVLQJOHORFDWLRQ KWWSZZZHFRQVXPHUJRY DFFHVVHG}-DQXDU\ $VRILWFRPSULVHG D. DATA PROTECTION  QDWLRQDO DXWKRULWLHV DOO RI ZKLFK DUH DOVR ,&3(1 LAWS ARE PHPEHUV ,Q  WKH LQLWLDWLYH UHFHLYHG  SPREADING RAPIDLY FRPSODLQWV WDEOH} 9  The importance of cross- border laws and enforcement measures is illustrated In the digital economy, personal data have become the E\ WKH IDFW WKDW ZKHUHDV DOPRVW  FRPSODLQWV IXHOGULYLQJPXFKFRPPHUFLDODFWLYLW\RQOLQH(YHU\GD\ were made against e-commerce companies in China vast amounts of information are transmitted, stored and LQQRQHRIWKHWRSFRXQWU\FRPSODLQWVZHUH collected online, enabled by improvements in computing ƄOHGE\UHVLGHQWVLQWKDWFRXQWU\ and communication power. In this environment, security In developed countries, self-regulation is the most of information is of growing concern to Governments, FRPPRQIRUPRIHQIRUFHPHQWIRU%&WUDQVDFWLRQV HQWHUSULVHVDQGFRQVXPHUVDOLNH2IHTXDOFRQFHUQLV with e-commerce companies establishing codes of the collection, use and sharing of personal information CHAPTER V : MAPPING THE LEGAL LANDSCAPE FOR E-COMMERCE 71

pending enactment. In this area, Asia and Africa offer 7DEOH}9 7RSORFDWLRQVRIFRQVXPHUVDQG companies involved in online complaints, DVLPLODUOHYHORIDGRSWLRQZLWKOHVVWKDQ}SHUFHQW   of countries having a law in place. Companies also need to adopt policies to keep Top consumer Number of Top company Number of information secure, put in place technical safeguards, locations complaints locations complaints and develop response plans for data security United States 13 445 United States 4 731 incidents to avoid fraudulent, deceptive and unfair Australia 1 914 China 3 996 practices. In view of the nascent stage of privacy and France 1 100 United Kingdom 1 213 data protection laws in sub-Saharan Africa, some United Kingdom 767 India 469 e-commerce companies have proactively adopted international best practices and security standards Canada 694 Canada 285 ER[9 :KHUHSULYDF\DQGFRQVXPHUSURWHFWLRQLV Brazil 555 Australia 264 GLIƄFXOWWRJXDUDQWHHGXHWRWKHQDWXUHRIWKHFRQWHQW Israel 448 France 246 model, service providers may need to take extra Argentina 341 Germany 220 measures to educate buyers and sellers on how to India 311 0H[LFR 158 UHFRJQL]HDQGSURWHFWWKHPVHOYHVIURPIUDXG Spain 295 Spain 144 The main international reference frameworks used for Source: HFRQVXPHUJRY)HGHUDO7UDGH&RPPLVVLRQ SULYDF\ DQG GDWD SURWHFWLRQ DUH WKH 2(&' *XLGHOLQHV WKH (XURSHDQ 8QLRQ 'DWD 3URWHFWLRQ 'LUHFWLYH DQG WKH to third parties without notice or consent of consumers. $VLDt3DFLƄF(FRQRPLF&RRSHUDWLRQ3ULYDF\)UDPHZRUN The use of cloud services provided across jurisdictions, While there is broad agreement on basic principles, and the growing number of data breaches accentuate there is no consensus on their application. Some data the need for adequate policy responses (UNCTAD, SURWHFWLRQUHJLPHV VRFDOOHGqRPQLEXVUHJLPHVr DSSO\ E $QDO\VHVRIqELJGDWDrDLPHGDWXQGHUVWDQGLQJ HTXDOO\WRWKRVHSURFHVVLQJSHUVRQDOGDWD2WKHUUHJLPHV DQG LQƅXHQFLQJ FRQVXPHU EHKDYLRXU IRU FRPPHUFLDO DSSO\GLIIHUHQWUXOHVWRVSHFLƄHGVHFWRUV IRUH[DPSOHWKH SURƄWPD\IXUWKHUH[DFHUEDWHVXFKFRQFHUQV:KHUHDV health sector), types of processing entity (for example, RUJDQL]DWLRQVpJRDOVDUHWRDYRLGƄQHVSRWHQWLDOODZVXLWV public authorities) or categories of data (for example, and reputation damage, consumers tend to worry data about children). In such jurisdictions, other sectors most about what they perceive to be questionable or are not subject to regulatory controls at all. unethical practices, which may not necessarily be illegal A distinction can be made between regimes that . .VKHWUL operate primarily through enforcement actions $FFRUGLQJWRRQHVRXUFHPRUHWKDQLQFLGHQWV brought by individuals or their representative ZHUHUHSRUWHGLQWKURXJKZKLFKVRPH}PLOOLRQ groups, and those that grant enforcement powers UHFRUGVZHUHH[SRVHG 5LVN%DVHG6HFXULW\ ,Q RQH PDMRU LQFLGHQW DV PDQ\ DV } PLOOLRQ QDPHV customer identities, encrypted passwords, debit or 7DEOH}9 ,QFLGHQWVUHSRUWHGSHUFRXQWU\ credit card numbers and other information relating Number of to customer orders were exposed. The business Country 3HUFHQWDJHRI incidents LQFLGHQWV  VHFWRUZDVWKHWDUJHWIRU}SHUFHQWRIWKHLQFLGHQWV United States 1054 48.7 IROORZHGE\*RYHUQPHQWV }SHUFHQW $ERXW}SHU United Kingdom 120 5.5 cent of the incidents were the result of hacking. In terms of geographical patterns, the United States Canada 58 2.7 was by far the most targeted country, accounting for India 50 2.3 DOPRVWKDOIRIWKHNQRZQFDVHV WDEOH}9 7KHPRVW Brazil 44 2 common types of data exposed were passwords, Germany 35 1.6 QDPHVHPDLOVDQGXVHUQDPHV ƄJXUH}9  Australia 30 1.4 Italy 29 1.3 $V VKRZQ LQ ƄJXUH} 9 } FRXQWULHV RI ZKLFK }GHYHORSLQJFRXQWULHV KDYHSXWLQSODFHOHJLVODWLRQ France 29 1.3 to secure the protection of data and privacy. In New Zealand 23 1.1 DQRWKHU } GHYHORSLQJ FRXQWULHV GUDIW ELOOV DUH Source: 5LVN%DVHG6HFXULW\   72 INFORMATION ECONOMY REPORT 2015

)LJXUH}9 ,QFLGHQWVE\W\SHRIGDWDH[SRVHGLQ SHUFHQW

Source: 5LVN%DVHG6HFXULW\  

)LJXUH}9 :RUOGPDSRIGDWDSURWHFWLRQSULYDF\ODZV

Legend 'DUNEOXHtFRXQWULHVZLWKOHJLVODWLRQ 9LROHWtFRXQWULHVZLWKQROHJLVODWLRQ Light blue – countries with draft legislation Grey – countries with no data Source: 81&7$'VHHDQQH[ CHAPTER V : MAPPING THE LEGAL LANDSCAPE FOR E-COMMERCE 73

Box V.2. Company responses to data protection and privacy in East Africa

,QHPHUJLQJHFRPPHUFHLQVXE6DKDUDQ$IULFDGDWDEUHDFKHVKDYHWKXVIDUEHHQODUJHO\RIƅLQHOLQNHGWRDXWRPDWLF teller-machine and point-of-sale terminal fraud. There have been various incidents of skimming devices that record a SD\PHQWFDUGpVGHWDLOV2QOLQHIUDXGDOVRRFFXUVDQGLWVSUHYDOHQFHZLOOLQFUHDVHDVPRUHDQGPRUHFRQVXPHUVFRPH online. Several e-commerce marketplaces have put in place mechanisms to handle the risk of fraud.

2/;tDQRQOLQHFODVVLƄHGVVLWHSUHVHQWLQ.HQ\DDQGPDQ\RWKHUFRXQWULHVtDGKHUHVWRWKHq6DIH+DUERXU3ULYDF\ 3ULQFLSOHVRIQRWLFHFKRLFHRQZDUGWUDQVIHUVHFXULW\GDWDLQWHJULW\DFFHVVDQGHQIRUFHPHQWr,QLWVWHUPVRIVHUYLFHLW outlines how data are collected, used and shared, as well as what measures are taken to protect an individual’s data. If XVHUVVXVSHFWWKDWWKHLUSULYDF\KDVEHHQYLRODWHGRURWKHUZLVHFRPSURPLVHG2/;HQFRXUDJHVWKHPWRUHSRUWWKHLVVXH ZLWKWKHVXEMHFWOLQHqSULYDF\SROLF\rXVLQJ2/;pVqOHJDOLVVXHVUHSRUWIRUPr *'LUHFW3D\LVDQHFRPPHUFHSD\PHQWJDWHZD\WKDWVHUYHVPRUHWKDQWUDYHODQGWRXURSHUDWRUVWKURXJKRXW(DVW Africa. It approaches data security in much the same way as a bank. As a card processor, it handles sensitive payment FDUGGDWDWKDWLIVWROHQFDQEHXVHGWRLQLWLDWHFDUGSD\PHQWVZLWKRXWWKHFDUGRZQHUpVFRQVHQW7RPLWLJDWHWKLV* 'LUHFW3D\KDVLPSOHPHQWHGDVXLWHRIVHFXULW\IHDWXUHVWRHQFU\SWDQGSURWHFWGDWDIURPHQGWRHQGFRPSO\LQJZLWKOHYHO RIWKH3D\PHQW&DUG,QGXVWU\'DWD6HFXULW\6WDQGDUG VHHKWWSVZZZSFLVHFXULW\VWDQGDUGVRUJ DFFHVVHG}-DQXDU\  7KHFRPSDQ\DOVRSURDFWLYHO\PRQLWRUVFDUGXVDJHWUHQGVWRGHWHFWDQGPLWLJDWHIUDXGDWWHPSWV $FFRUGLQJWRLWVSULYDF\SROLF\=RRP7DQ]DQLDtDKRUL]RQWDOFODVVLƄHGVVHUYLFHtFRPPLWVWRQHYHUVKDULQJSHUVRQDO GHWDLOV qH[FHSW ZKHQ UHTXLUHG E\ ODZ RU ZLWK WKH XVHUpVH[SUHVV SHUPLVVLRQr 7KH FRPSDQ\pVEXVLQHVV PRGHO LV WR encourage user-generated content and then sell advertising space through an internal advertising network, which enables it to advertise to users without compromising or sharing their personal information. Source: UNCTAD.

WR D VSHFLDOL]HG VXSHUYLVRU\ DXWKRULW\ WKDW H[HUFLVHV committed against several persons in many countries ongoing oversight concerning the conduct of those without the criminal even having to leave home. that process personal data. An additional challenge Cybercriminals may route their communications through for Governments in developing countries is the need local phone companies, long distance carriers, Internet to set up regulatory agencies. service providers, and wireless and satellite networks, and may go through different computers located in multiple countries before attacking a particular system. E. CYBERCRIME – A (YLGHQFHPD\EHVWRUHGRQDFRPSXWHULQDGLIIHUHQW GLOBAL PRIORITY country from where the criminal act was executed. Cybercrimes are targeting laptops, tablets, mobile Cybercrime is of growing concern to countries at all SKRQHV DQG HQWLUH QHWZRUNV 0RELOH PHUFKDQWV DUH levels of development and affects both buyers and reported to be incurring the greatest fraud losses as VHOOHUV,QDQHVWLPDWHG}ELOOLRQZDVORVWLQ a share of revenue among all merchant segments supplier revenue due to online fraud (CyberSource, /H[LV1H[LV 7KLVUHSUHVHQWVDSDUWLFXODUFKDOOHQJH  ,Q(XURSHWKHPRVWFRPPRQIUDXGVUHSRUWHG for developing countries in which mobile phones are E\WKH(XURSHDQ&RQVXPHU&HQWUHV1HWZRUN (&& the key device for e-commerce and related payments. Net) were related to fraudulent websites, used cars 0RUHRYHUGHYHORSLQJFRXQWULHVDUHLQFUHDVLQJO\EHLQJ RQOLQHDQGFRXQWHUIHLWSURGXFWV ƄJXUH}9 $FRPPRQ used by cybercriminals due primarily to lax enforcement denominator among them is that consumers are lured E\ DXWKRULWLHV $FFRUGLQJ WR RQH VWXG\ WKH WRS ƄYH by the advertisement of cheap or free products and KRWVSRWV IRU F\EHUFULPH DUH WKH 5XVVLDQ )HGHUDWLRQ the preferred method of payment for the fraudsters is &KLQD%UD]LO1LJHULDDQG9LHW1DP money transfer. Cybercrime laws are rapidly being enacted. As Such incidents highlight the challenges facing RI 1RYHPEHU   FRXQWULHV RI ZKLFK  consumers online. While some crimes committed on developing and transition economies) had enacted the Internet have been around for many years, their VXFK OHJLVODWLRQ DQG DQRWKHU  FRXQWULHV KDG GUDIW use has rapidly expanded, in terms of the number of OHJLVODWLRQXQGHUZD\0RUHWKDQFRXQWULHVKDGQR incidents and geographic reach. Cybercrimes can be F\EHUFULPHOHJLVODWLRQ ƄJXUH}9 $IULFDDQG2FHDQLD 74 INFORMATION ECONOMY REPORT 2015

)LJXUH}9 0RVWFRPPRQW\SHVRIIUDXGVUHSRUWHGWR(&&1HWFHQWUHVLQ(XURSH 1XPEHURI(&&1HWFHQWUHV  UHSRUWLQJWKDWWKHIROORZLQJW\SHVRIIUDXGDUHIUHTXHQW

Source: (&&1HW   are the regions for which the largest number of cybercrime and sharing of information, thus giving countries still need to adopt cybercrime laws. Some countries the opportunity to react quickly and }SHUFHQWRIWKHWUDQVLWLRQHFRQRPLHVKDYHDGRSWHG HIƄFLHQWO\LQFRPEDWLQJF\EHUFULPH cybercrime legislation and in Latin America the share LVMXVWRYHU}SHUFHQW F. CONCLUSIONS AND 7KH PRVW VLJQLƄFDQW LQWHUQDWLRQDO LQVWUXPHQW LQ RECOMMENDATIONS WKH ƄHOG LV WKH &RXQFLO RI (XURSH &RQYHQWLRQ RQ &\EHUFULPH   7KLV KDV EHHQ IROORZHG LQ PDQ\ :KLOHOHJDOKDUPRQL]DWLRQKDVEHHQDPXFKWRXWHGJRDO developing regions by similar instruments, including RISROLF\PDNHUVLQWKHSDVWLWLVLQFUHDVLQJO\UHFRJQL]HG WKH &RPPRQZHDOWK 0RGHO /DZ RQ &RPSXWHU DQG that compatibility and interoperability between different &RPSXWHUUHODWHG&ULPH  DQGWKH$IULFDQ8QLRQ legal systems is a more achievable target and one which &RQYHQWLRQ RQ &\EHU 6HFXULW\ DQG 3HUVRQDO 'DWD ZLOO IDFLOLWDWH HFRPPHUFH (YHQ LQ GHYHORSHG UHJLRQV 3URWHFWLRQ DGRSWHG LQ -XQH  7KHUH DUH DOVR ZLWKDFHUWDLQGHJUHHRIOHJDOKDUPRQL]DWLRQGLIIHUHQW LQLWLDWLYHVDWWKH(XURSHDQOHYHO %R[9 2QOLQHIUDXGLQ,QGLD Developing countries face several issues, including the lack of international legal frameworks, and Like other countries, India is affected by e-commerce fraud such as identity theft and scams. However, only a lack of capacity and infrastructure to respond a small proportion of the cases are reported, and there effectively to cyberattacks. Cybercrime presents KDYH EHHQ IHZ FRQYLFWLRQV $  VXUYH\ RI \RXQJ complicated cross-border enforcement and professionals in India revealed that one out of four MXULVGLFWLRQDOSUREOHPV3DUWLFXODUHIIRUWVDUHQHHGHG were victims of identity fraud. Another study found that in the area of law enforcement and to strengthen while the amount of monetary loss due to identity theft the capacity of computer emergency response has remained steady, the frequency of such incidents teams. International coordination and cooperation LQFUHDVHGE\}SHUFHQWLQ .30*  are critical in this context to create a safe business Source: UNCTAD. environment promoting faster responses to CHAPTER V : MAPPING THE LEGAL LANDSCAPE FOR E-COMMERCE 75

)LJXUH}9 :RUOGPDSRIF\EHUFULPHODZV

Legend 'DUNEOXHtFRXQWULHVZLWKOHJLVODWLRQ 9LROHWtFRXQWULHVZLWKQROHJLVODWLRQ Light blue – countries with draft legislation Grey – countries with no data Source: 81&7$'VHHDQQH[ legal requirements set in national laws may hamper 1. Align e-transaction laws HFRPPHUFH 'HVSLWH VLJQLƄFDQW SURJUHVV LQ WKH adoption of laws, and to some extent legal compatibility (QVXULQJ UHJLRQDO DQG JOREDO FRPSDWLELOLW\ RI in many regions, there is still a need to align laws with e-transaction laws is a key challenge due to international legal instruments to favour cross-border the increased use of electronic technologies by e-commerce. While preparing or revising legislation, *RYHUQPHQWV FRPSDQLHV DQG FLWL]HQV Therefore, FRXQWULHVVKRXOGVHHNWREHQHƄWIURPGLVFXVVLRQVWKDW when preparing or revising e-commerce legislation, are taking place at the international level, such as the lawmakers should consider that of other countries 2(&' WKH 8QLWHG 1DWLRQV *XLGHOLQHV RQ &RQVXPHU in the same region or of trading partners to have 3URWHFWLRQ81&,75$/DQG:72 compatible legal systems and trade policies. Legal Several Governments, especially in developing recognition of e-signatures, electronic contracts FRXQWULHVQHHGƄUVWDQGIRUHPRVWWRDFNQRZOHGJH and evidence at a national level should be extended the importance of e-commerce and allocate to those originating in other jurisdictions. VXIƄFLHQW UHVRXUFHV WRZDUGV LWV GHYHORSPHQW 2YHU WKH SDVW  \HDUV DGYDQFHV WRZDUGV )XUWKHUPRUH WKH\ QHHG WR DGRSW EDVHOLQH ODZV LQ KDUPRQL]DWLRQKDYHEHHQPDGHLQVHYHUDOUHJLRQV legal areas where they do not exist. In doing so, However, as different standards are used, there developing countries should coordinate among is still a need to make laws more compatible institutions tasked with different legislation on internationally. 7KH (&& FDQ KHOS LQ SURPRWLQJ e-commerce, cloud computing and e-government compatibility of laws. It proposes a set of core legal to adopt common key principles that will facilitate provisions enabling cross-border e-commerce. the delivery of all these services. Governments Countries should consider aligning their legislation of developing countries should also ensure on e-transactions with the provisions of this enforcement of laws, the next great challenge &RQYHQWLRQ %HFRPLQJ D SDUW\ WR LW will favour awaiting them, both domestically and cross border. regional and international compatibility, including 7KHƄYHUHFRPPHQGDWLRQVSUHVHQWHGEHORZDGGUHVV the cross-border recognition of e-signatures, as the selected issues currently affecting e-commerce Convention provides principles that could form the developments, with special consideration given to basis of a mutual recognition system (DUWLFOH    developing countries. ER[9 19 76 INFORMATION ECONOMY REPORT 2015

2. Streamline consumer protection There is a need to set up consumer protection policies agencies in several developing countries and to strengthen existing ones in other countries. In Differences in national consumer protection laws are addition, information sharing would facilitate cross- DFKDOOHQJHIRUFURVVERUGHUHFRPPHUFH(IIRUWVDW border e-commerce. This would require an agreement KDUPRQL]LQJFRQVXPHUSURWHFWLRQODZVLQHFRPPHUFH between consumer protection agencies in a given are carried out by various regional groupings. region, complemented by appropriate investigation and referral tools. Linking up agencies through $WWKHHQGRIWKH2(&'ZDVLQWKHSURFHVVRI QHWZRUNVVXFKDV,&3(1FDQKHOSQDWLRQDODJHQFLHV UHYLHZLQJLWV*XLGHOLQHV 2(&'E 7KHREMHFWLYH to keep abreast of new legal regional or international LVWRUHƅHFWUHOHYDQWSROLF\SULQFLSOHVSHUWDLQLQJWR%& developments, as well as to share experiences and HFRPPHUFH LQ D QXPEHU RI 2(&' DFWV VLQFH WKHLU bring out solutions for e-commerce users. adoption in 1999. At the global level, the United Nations is also conducting consultations on the The use of alternative dispute resolution and redress UHYLVLRQRIWKH81*&3 8QLWHG1DWLRQV in the schemes that are affordable and easy to use is also light of market and regulatory developments, including to be recommended. Some of the most effective those related to e-commerce. The consultations aim schemes are currently embedded in self-regulatory to capture the needs of developing countries. The bodies, law enforcement agencies, ombudsmen UHYLVHGJXLGHOLQHVPD\EHDYDLODEOHE\ Salient and other entities. The use of trustmarks, such as WRSLFV GLVFXVVHG GXULQJ WKH FRQVXOWDWLRQV LQFOXGH WKH H&RQƄDQ]D ZZZHFRQƄDQ]DRUJ  LQLWLDWLYH RI WKH effective protection that is no less favourable to that ,QVWLWXWR /DWLQDPHULFDQR GH &RPHUFLR (OHFWUÐnico RIRWKHUIRUPVRIFRPPHUFHULJKWVDQGREOLJDWLRQVRI (eInstituto), LV DOVR ZRUWK H[SORULQJ 7KLV QRQSURƄW FRQVXPHUV DQG EXVLQHVVHV YXOQHUDEOH FRQVXPHUV RUJDQL]DWLRQKDVFUHDWHGDFRGHRIJRRGSUDFWLFHVWR PRELOH SODWIRUPV SD\PHQW DOWHUQDWLYH GLVSXWH guide companies on how to address consumer needs UHVROXWLRQFRQVXPHUHGXFDWLRQDQGDZDUHQHVVGDWD properly when designing their online businesses, and DQGSULYDF\SURWHFWLRQDSSOLFDEOHODZDQGMXULVGLFWLRQ RIIHUVDQRQOLQHGLVSXWHUHVROXWLRQWRROFDOOHG3DFWDQGD and bilateral, regional and international cooperation. (www.pactanda.com). 7KHUHYLVHG81*&3ZLOORQO\JLYHSROLF\DGYLFHDQGZLOO WKHUHIRUHQRWFUHDWHDFRQƅLFWZLWKHLWKHUQDWLRQDOODZV 3. Streamlining data protection and or regional frameworks/instruments. Countries that are cybercrime policies preparing or revising their consumer protection laws for e-commerce may consider aligning their legislation The development and adoption of legal frameworks ZLWKWKH81*&3DQG2(&'*XLGHOLQHVWRHQFRXUDJH for protecting personal data and for combating KDUPRQL]DWLRQRIFRQVXPHUSURWHFWLRQOHJLVODWLRQDQG cybercrime at the national level should not be done IRVWHUFRQVXPHUFRQƄGHQFHLQHFRPPHUFH in isolation. Achieving the compatibility of laws and

%R[9 ,QWHJUDWLQJGHYHORSLQJFRXQWULHVLQWKHUHJLRQDODQGJOREDOF\EHUHFRQRP\

7KH (&& DLPV WR SURPRWH WKH HVWDEOLVKPHQW RI XQLIRUP OHJLVODWLRQ DQG WR HQKDQFH OHJDO FHUWDLQW\ DQG FRPPHUFLDO SUHGLFWDELOLW\ZKHUHHOHFWURQLFFRPPXQLFDWLRQVDUHXVHGLQUHODWLRQWRLQWHUQDWLRQDOFRQWUDFWV7KH&RQYHQWLRQIXOƄOVIRXU PDLQJRDOV • It facilitates the use of electronic communications contained in treaties drafted before the widespread use of those FRPPXQLFDWLRQV • ,WUHLQIRUFHVWKHOHYHORIXQLIRUPLW\LQWKHLPSOHPHQWDWLRQRIWKH81&,75$/0RGHO/DZV • ,WXSGDWHVFHUWDLQSURYLVLRQVRIWKH81&,75$/0RGHO/DZVVXFKDVWKHORFDWLRQRIWKHSDUWLHVWKHWLPHDQGSODFH RI GLVSDWFK DQG UHFHLSW DQG WKH IXQFWLRQDO HTXLYDOHQFH IRU qVLJQDWXUHr ZKLFK LQ SUDFWLFH HQDEOHV FURVVERUGHU recognition of all types of e-signatures. It also introduces new provisions such as the use of automated message V\VWHPVLQYLWDWLRQWRPDNHRIIHUVDQGWKHOLNH • ,WSURYLGHVFRUHSURYLVLRQVRQHWUDQVDFWLRQVWRHQVXUHUHJLRQDODQGLQWHUQDWLRQDOKDUPRQL]DWLRQ Source: 81&7$'EDVHGRQ8QLWHG1DWLRQV   CHAPTER V : MAPPING THE LEGAL LANDSCAPE FOR E-COMMERCE 77

policies at the regional and international level is data security should consider the quality of data, the desirable. The establishment of minimum standards needs of individual data subjects, the entity processing helps to ensure cross-border coordination on the the personal data and, indeed, society at large. design and implementation of relevant legislation and 3ROLF\PDNHUV DUH LQFUHDVLQJO\ UHFRJQL]LQJ WKH ,QWHUQHW stronger enforcement institutions. DV qFULWLFDO QDWLRQDO LQIUDVWUXFWXUHr RYHU ZKLFK D ULVLQJ proportion of economic and social activities are carried (VWDEOLVKLQJ DQ HIƄFLHQW GDWD SURWHFWLRQ UHJXODWRU\ agency can be challenging from both a resource and RXWEXWDOVRDVDqVRXUFHRIYXOQHUDELOLW\r$GGUHVVLQJ this duality and putting in place adequate data security a political perspective. Lessons may be learned from measures – from the adoption of cybercrime laws to the the telecommunications sector, where such agencies establishment of computer emergency response teams/ have been widely accepted as a critical component of computer security incident response teams – should be a successful regulatory regime. Combining regulatory functions between data protection and consumer DFRUHFRPSRQHQWRIWKHSROLF\UHVSRQVH3XEOLFtSULYDWH partnerships may be important in this context. protection agencies may be a way to reduce the regulatory costs of data protection. 4. Strengthening the capacity of Similarly, comprehensive frameworks for cooperation outreach and enforcement of cybercrime need to be lawmakers and judiciary developed. Investigating even a single communication The judiciary in many developing countries needs may require cooperation among several national law to be trained in the area of cyberlaws. Legal issues enforcement agencies (including the private sector). around e-commerce are still relatively new. Several 5HJLRQDO FRRSHUDWLRQ EHWZHHQ F\EHUFULPH ODZ LQWHUQDWLRQDO DQG UHJLRQDO RUJDQL]DWLRQV LQFOXGLQJ enforcement agencies may involve the establishment of WKH &RPPRQZHDOWK VHFUHWDULDW ,78 81&,75$/ FRPPRQWUDLQLQJDQGUHVRXUFHFHQWUHVDQGQDWLRQDO 81&7$' WKH 8QLWHG 1DWLRQV 2IƄFH RQ 'UXJV contact points. DQG &ULPH DQG WKH &RXQFLO RI (XURSH FDQ SURYLGH 9DULRXV VHFXULW\ PHDVXUHV t SK\VLFDO ORJLFDO RU assistance to countries and regions in the different RUJDQL]DWLRQDOtVKRXOGEHXVHGWRSURWHFWGDWDDJDLQVW legal areas. Increasingly, these agencies are joining deliberate acts of misuse. Implementing appropriate IRUFHVWRPD[LPL]HWKHLUDFWLRQV ER[9 

%R[9 81&7$'DVVLVWDQFHZLWKSDUWQHUV

In support of developing countries’ efforts in this area, UNCTAD assists in the preparation and revision of e-commerce ODZVDOLJQHGZLWKLQWHUQDWLRQDODQGUHJLRQDOLQVWUXPHQWV7KHDVVLVWDQFHSURYLGHGLQWKHKDUPRQL]DWLRQRIHFRPPHUFH OHJLVODWLRQDFURVVUHJLRQVLQWKH$6($1WKH(DVW$IULFDQ&RPPXQLW\ ($& (&2:$6/DWLQ$PHULFDDQG&HQWUDO$PHULFD has created an impetus for countries to push for the adoption of national laws in this area. The work has involved close FROODERUDWLRQZLWKUHJLRQDOLQVWLWXWLRQVVXFKDVWKH$IULFDQ8QLRQ&RPPLVVLRQWKH$6($1VHFUHWDULDWWKH($&VHFUHWDULDW WKH(&2:$6&RPPLVVLRQWKH$VRFLDFLÐQ/DWLQRDPHULFDQDGH,QWHJUDFLÐQDQGWKH6HFUHWDULDWRIWKH6LVWHPD(FRQÐPLFR Latinoamericano y del Caribe.

2YHUVL[W\FRXQWULHVKDYHWRGDWHEHHQHQJDJHGZLWK81&7$'WKDQNVWRWKHVXSSRUWRIWKH*RYHUQPHQWVRI)LQODQG and Spain. Capacity-building activities have strengthened the knowledge of policy and lawmakers on legal issues of e-commerce and international best practice, allowing them to formulate laws in line with their regional frameworks. Several agencies are assisting developing countries within the scope of their mandates, and inter-agency collaboration LVJURZLQJ7ZRH[DPSOHVRIVXFKFRRSHUDWLRQDUHWKHEULHƄQJRI&RPPRQZHDOWKSDUOLDPHQWDULDQVVHUYLFHGE\81&7$' DQG RUJDQL]HG MRLQWO\ ZLWK WKH &RPPRQZHDOWK 7HOHFRPPXQLFDWLRQ2UJDQL]DWLRQ DQG WKH &RPPRQZHDOWK 3DUOLDPHQWDU\ $VVRFLDWLRQDWWKHRFFDVLRQRIWKH&RPPRQZHDOWK&\EHUVHFXULW\)RUXP$QRWKHUH[DPSOHLVWKHMRLQWZRUNVKRSRQ WKHKDUPRQL]DWLRQRIF\EHUOHJLVODWLRQLQ(&2:$6 *KDQD0DUFK RUJDQL]HGE\81&7$'ZLWK81&,75$/WKH$IULFDQ &HQWUHIRU&\EHUODZDQG&\EHUFULPH3UHYHQWLRQWKH&RXQFLORI(XURSHDQGWKH&RPPRQZHDOWK&\EHUFULPH,QLWLDWLYH UNCTAD has built a network of institutions with which consolidated partnerships are concluded within the different project DFWLYLWLHV0DQ\RIWKHPFRQWULEXWHGWRWKHFRQVROLGDWLRQRIWKHGDWDEDVHXVHGLQWKLVFKDSWHU7KHUHVXOWRIWKLVƄUVWHYHUJOREDO mapping is available online and countries are invited and encouraged to contribute to keeping this database up-to-date. Source: UNCTAD. 78 INFORMATION ECONOMY REPORT 2015

5. Enhancing the awareness of %R[9 $ZDUHQHVVFDPSDLJQVRQHFRPPHUFH consumers and companies laws in Uganda

As the legal environment for e-commerce is evolving, In Uganda, the National Information Technology Authority and differs from one jurisdiction to another, consumers DQG WKH 0LQLVWU\ RI ,&7 KDYH GHYHORSHG DQG HQDFWHG VXEVLGLDU\OHJLVODWLRQ WKDWLVWKH(OHFWURQLF7UDQVDFWLRQV and enterprises need to be aware of relevant laws and $FWDQGWKH(OHFWURQLF6LJQDWXUHV$FW WRRSHUDWLRQDOL]H of means of redress. This is particularly important WKH($&)UDPHZRUNRQ&\EHU/DZV 81&7$'E  to build trust in cross-border e-commerce. Industry 6LQFH  WKH 1DWLRQDO ,QIRUPDWLRQ 7HFKQRORJ\ associations and consumer protection agencies Authority has embarked on raising awareness about should work together to overcome barriers caused these laws as well as aspects of information security to by divergent national legal standards. National public encourage public administration and the private sector campaigns (including through radio and television to put in place minimum information security controls programmes) aimed at informing about ways to WR HQVXUH VDIH HWUDQVDFWLRQV 6HYHUDO VHQVLWL]DWLRQ protect consumers online can be a key element of ZRUNVKRSVZHUHRUJDQL]HGIRUHQWLWLHVVXFKDVPLQLVWULHV DZDUHQHVVUDLVLQJVWUDWHJLHV ER[9  banker associations, law societies, national chambers of commerce, the Investment Authority and the Securities ([FKDQJH :RUNVKRSV ZHUH IDFLOLWDWHG E\ D PXOWL institutional team of lawyers and technical resource SHUVRQVLQFOXGLQJH[SHUWVSDUWLFLSDWLQJLQWKH($&7DVN )RUFHVXSSRUWHGE\81&7$')XWXUHSODQVLQFOXGHWKH delivery of similar workshops to create awareness of the 'DWD3URWHFWLRQDQG3ULYDF\%LOORQFHHQDFWHG Source: UNCTAD. CHAPTER V : MAPPING THE LEGAL LANDSCAPE FOR E-COMMERCE 79

NOTES

1 7KHVXUYH\VZHUHFRQGXFWHGLQWKHUHJLRQVRI$6($1 LQ DQGWKH(FRQRPLF&RPPXQLW\RI:HVW$IULFDQ 6WDWHV (&2:$6  LQ DQGLQ/DWLQ$PHULFDDQGWKH&DULEEHDQ LQ 

 ,Q6LQJDSRUHEHFDPHWKHƄUVWFRXQWU\WRHQDFWOHJLVODWLRQXVLQJWKH0RGHO/DZDVDEDVLVVHHKWWSZZZ XQFLWUDORUJXQFLWUDOHQXQFLWUDOBWH[WVHOHFWURQLFBFRPPHUFH0RGHOBVWDWXVKWPO DFFHVVHG}-DQXDU\ 

 6HH KWWSZZZXQFLWUDORUJXQFLWUDOHQXQFLWUDOBWH[WVHOHFWURQLFBFRPPHUFH0RGHOBVWDWXVKWPO DFFHVVHG }-DQXDU\ 

4 7KH FRXQWULHV DUH WKH &RQJR WKH 'RPLQLFDQ 5HSXEOLF +RQGXUDV 0RQWHQHJUR WKH 5XVVLDQ )HGHUDWLRQ DQG Singapore.

5 6HH KWWSZZZXQFLWUDORUJXQFLWUDOHQXQFLWUDOBWH[WVHOHFWURQLFBFRPPHUFH&RQYHQWLRQBVWDWXVKWPO DFFHVVHG }-DQXDU\ 

 3XEOLFNH\LQIUDVWUXFWXUHLVDFU\SWRJUDSKLFWHFKQLTXHWKDWHQDEOHVXVHUVWRVHFXUHO\FRPPXQLFDWHRQDQLQVHFXUH public network and reliably verify the identity of a user via digital signatures.

 :LWKWKHH[FHSWLRQRI%XUNLQD)DVR

 6HHKWWSHXURSDHXX[.* DFFHVVHG}-DQXDU\ 

9 7KHVHƄQGLQJVDUHVXSSRUWHGE\DJOREDOVXUYH\RQWKHVWDWXVRIFRQVXPHUSURWHFWLRQWKDWIRXQGWKDWWKH,&7VHFWRU HQMR\VOHVVFRQVXPHUSURWHFWLRQPHDVXUHVWKDQWUDGLWLRQDOVHFWRUV &RQVXPHUV,QWHUQDWLRQDO 

 6HHKWWSHXUOH[HXURSDHXOHJDOFRQWHQWHQ$//(/;B6(66,21,' NT-U;EI7OZ&1&\-7\0=Q1SO<\ PQNE*I54-K4"XUL &(/(;'& DFFHVVHG}-DQXDU\ 

11 7KLVKDVEHHQVWUHVVHGE\GHOHJDWHVLQWKH$6($1DQGLQ/DWLQ$PHULFDLQWKHFRQWH[WRI81&7$'pVDVVLVWDQFH VHHIRUH[DPSOH81&7$' D 

 6HHKWWSVLFSHQRUJ DFFHVVHG}-DQXDU\ 

 6HHKWWSZZZHFRQVXPHUJRYHQJOLVKUHVRXUFHVWUHQGVVKWP DFFHVVHG}-DQXDU\ 

14 &RQVXPHU&UHGLW$FWVHFWLRQ

15 Hacking here refers to the gaining of access (wanted or unwanted) to a computer and viewing, copying, or creating data (leaving a trace) without the intention of destroying data or maliciously harming the computer.

 6HHq7KHZRUOGpVWRSF\EHUFULPHKRWVSRWVr7LPHFRP$XJXVWDYDLODEOHDWKWWSWLPHFRP WKHZRUOGVF\EHUFULPHKRWVSRWV DFFHVVHG}-DQXDU\ 

 6HH2(&'  DQG'LUHFWLYH(8RIWKH(XURSHDQ3DUOLDPHQWDQGWKH&RXQFLORI(XURSHRI$XJXVW RQDWWDFNVDJDLQVWLQIRUPDWLRQV\VWHPVDYDLODEOHDWKWWSHXUOH[HXURSDHXOHJDOFRQWHQW(17;73')"XUL &(/(;/ IURP (1 DFFHVVHG}-DQXDU\ 

 )RUH[DPSOHRXWRI0DOD\VLDpVODZ\HUVRQO\IRXUZHUHUHSRUWHGO\DEOHWRKDQGOHF\EHUFULPHVLQVHH q8QGHUVWDQGLQJ F\EHUFULPLQDOVr 6WUDLW 7LPHV  )HEUXDU\  $QG LQ ,QGLD WKH 'HOKL 3ROLFH F\EHUFULPH FHOO KDGRQO\WZRLQVSHFWRUVDVRI1RYHPEHUVHHKWWSZZZKLQGXVWDQWLPHVFRP,QGLDQHZV1HZ'HOKL&\EHU FULPHXSE\LQ&DSLWDO$UWLFOHDVS[ DFFHVVHG)HEUXDU\ VHHDOVR.VKHWUL  

19 6RPHFRXQWULHVKDYHDOUHDG\PRGLƄHGWKHLUGRPHVWLFOHJLVODWLRQLQOLQHZLWKWKHVXEVWDQWLYHSURYLVLRQVRIWKH(&& IRUH[DPSOH6LQJDSRUHDQG$XVWUDOLDtWKHODWWHUQRWEHLQJ\HWD6WDWHSDUW\WRWKH(&& 

 5HFRPPHQGDWLRQRIWKH&RXQFLOFRQFHUQLQJ*XLGHOLQHVIRU3URWHFWLQJ&RQVXPHUVIURP)UDXGXOHQWDQG'HFHSWLYH &RPPHUFLDO 3UDFWLFHV $FURVV %RUGHUV 5HFRPPHQGDWLRQ RI WKH &RXQFLO RQ &URVVERUGHU &RRSHUDWLRQ RQ WKH (QIRUFHPHQWRI/DZV$JDLQVW6SDP5HFRPPHQGDWLRQRIWKH&RXQFLORQWKH&RQVXPHU'LVSXWH5HVROXWLRQDQG 5HGUHVVDQG5HFRPPHQGDWLRQRIWKH&RXQFLORQ&RQVXPHU3ROLF\'HFLVLRQ0DNLQJ

 6HHKWWSXQFWDGRUJ6HFWLRQVGLWFBFFSEGRFV81*&3B'UDIW5HSRUWBHQSGI DFFHVVHG)HEUXDU\ 

 6HHZZZHLQVWLWXWRRUJ DFFHVVHG)HEUXDU\ 

STRATEGY AND POLICY IMPLICATIONS 6

As the digital economy expands and more and more business activities are affected, strategies which enable companies across different sectors and sizes to engage in e-commerce are becoming increasingly relevant. In this FRQWH[WDZHOOGHYHORSHGQDWLRQDOVWUDWHJ\PD\KHOSHQKDQFHWKHQHWEHQHƄWV of e-commerce. Such a strategy needs to facilitate the ability of producers to sell online and of consumers and other buyers to purchase online. Effective national policies in areas such as ICT infrastructure development, logistics and trade facilitation, the legal and regulatory environment, e-procurement, e-payments, platforms, awareness-raising and skills development in combination with an enabling international environment are essential to enable domestic and cross-border e-commerce. 7KLV ƄQDO FKDSWHU ORRNV DW KRZ *RYHUQPHQWV LQ FROODERUDWLRQ ZLWK RWKHU stakeholders, can help create an environment that is more conducive to UHDSLQJ EHQHƄWV IURP HFRPPHUFH WDNLQJ LQWR DFFRXQW ERWK RSSRUWXQLWLHV and risks. Special attention is devoted to measures to facilitate the effective involvement of micro and small enterprises. In the second part of the chapter, WKHUROHRILQWHUQDWLRQDOSROLFLHVLQVHOHFWHGDUHDVLVEULHƅ\GLVFXVVHG 82 INFORMATION ECONOMY REPORT 2015

A. NATIONAL POLICIES Informed decision-making in this context needs a AND STRATEGIES realistic assessment of where the country stands in terms of its e-commerce readiness. This involves TO ENABLE developing an understanding of national needs, E-COMMERCE FKDUDFWHULVWLFV VWUHQJWKV DQG ZHDNQHVVHV 3URSHUO\ identifying the main challenges and barriers, and uncovering the dynamics underpinning them, help to 1. Strategic approaches to the ensure that policy measures adopted will be effective. development of e-commerce Any assessment should include a comprehensive review of the evolution of e-commerce, including (a) Developing a national e-commerce existing initiatives to support it, and a stocktaking of strategy the resources and capabilities that could contribute to its development. This may require the collection Governments have a crucial role to play in creating of information through desk research and direct an economic environment conducive to e-commerce consultations with various actors concerned. The and for making e-commerce an integral part of policies 81&7$' %& (FRPPHUFH ,QGH[ FKDSWHU ,,,  FDQ toward a more inclusive information society. In this serve as a useful tool in this context. context, they need to identify how e-commerce may support various objectives in the country’s national 7KLV SURFHVV ZLOO EHQHƄW IURP FORVH GLDORJXH DPRQJ development agenda and ensure that the e-commerce DOO UHOHYDQW VWDNHKROGHUV (IIHFWLYH PXOWLVHFWRUDO DQG dimension is integrated into national ICT master plans. interministerial cooperation is necessary for both strategy &OHDUO\GHƄQHGREMHFWLYHVDQGUHFRJQLWLRQRISRVVLEOH GHYHORSPHQWDQGLPSOHPHQWDWLRQ([DPSOHVRIPLQLVWULHV FRQFHUQVDUHDƄUVWVWHSWRIRUPXODWLQJUHOHYDQWSROLFLHV that might be affected include those responsible for MXVWLFH ƄQDQFH VFLHQFH WHFKQRORJ\ DQG LQQRYDWLRQ Developing a national e-commerce strategy which is ,&7LQWHUQDWLRQDOWUDGHUXUDOGHYHORSPHQWHPSOR\PHQW effective and actionable is challenging. Though it is SRVWDQGWUDQVSRUWDWLRQ2WKHUVWDNHKROGHUVWKDWVKRXOG essential for countries to learn from the best practices be involved include relevant government regulatory and RI RWKHU FRXQWULHV WKHUH LV QR RQHVL]HƄWVDOO promotional agencies, the trade-facilitation committee formula to apply. Subsequently, it is incumbent upon 81&7$' E  WKH SRVW QDWLRQDO ,7 DVVRFLDWLRQV Governments to adapt any approach to their country’s chambers of commerce, academia and consumer capacities, priorities and needs. RUJDQL]DWLRQVZKHUHWKH\H[LVW )LUVW*RYHUQPHQWVPD\ZDQWWRJLYHVSHFLDODWWHQWLRQ (b) Implementation, monitoring and follow-up to micro and small enterprises as they tend to lag behind in e-commerce and are also among those likely Due to the changing nature of the ICT and e-commerce WREHQHƄWWKHPRVWIURPLW6HFRQGHPSKDVLVPD\EH landscape, monitoring and follow-up actions are SODFHGRQHQWHUSULVHVLQVSHFLƄFLQGXVWULHV IRUH[DPSOH SDUWLFXODUO\UHOHYDQW5HOHYDQWSHUIRUPDQFHLQGLFDWRUV retail) or certain parts of the country (for example, rural and realistic targets should therefore be established areas). Third, a strategy may distinguish between efforts at the outset. The monitoring exercise may require to promote domestic and cross-border e-commerce QHZHIIRUWVWRFROOHFWGDWD)HZGHYHORSLQJFRXQWULHV DVZHOODVEHWZHHQ%%DQG%&WUDQVDFWLRQV)RXUWK currently report statistics on basic indicators related to WKHUH PD\ EH D QHHG WR UHƅHFW RQ KRZ ,&7 XVDJH LV HFRPPHUFH5HJXODUVXUYH\VRQERWKWKHTXDQWLWDWLYH evolving, including with regard to mobile devices, and qualitative aspects of e-commerce can provide VRFLDO PHGLD DQG DOWHUQDWLYH SD\PHQW VROXWLRQV )LIWK essential information to policymakers, as shown there may be a need to encourage the development of LQ ER[ 9, 7KH XVH RI VWDQGDUG PHWKRGRORJLHV LV e-commerce platforms, delivery systems and payment recommended to allow for cross-country comparisons. solutions that are tailored to local needs, languages and cultures, involving both public and private-sector 2. Key policy areas to address in a DFWRUV )LQDOO\ WKH VWUDWHJ\ PD\ QHHG WR DGGUHVV national strategy the broader implications of an increased reliance on e-commerce. Implications may relate to the distribution This section proposes eight critical policy areas which RIEHQHƄWVDQGFRVWVEHWZHHQGLIIHUHQWVWDNHKROGHUV are likely to feature in a national e-commerce strategy ƄVFDOLPSOLFDWLRQVDQGVRFLHWDOLPSDFWV ƄJXUH} 9,  7KH UHODWLYH HPSKDVLV JLYHQ WR WKH CHAPTER VI : STRATEGY AND POLICY IMPLICATIONS 83

respective areas should be informed by the readiness mobile phones. It is increasingly important also for the assessment exercise mentioned above. Internet to be accessible and that data services can be provided in both urban and rural areas, through (a) Affordable ICT infrastructure and services Ƅ[HG RU PRELOH QHWZRUNV %URDGEDQG LQIUDVWUXFWXUH Improve access to reliable and affordable ICT LV UHTXLUHG WR VHL]H WKH IXOO RSSRUWXQLWLHV IURP services: Consistent and affordable ICT services are e-commerce, including by leveraging cloud solutions essential for e-commerce to thrive. At the most basic and for the purchasing of digital products that require OHYHO FLWL]HQV QHHG WR EH DEOH WR FRPPXQLFDWH YLD high quality broadband service. Governments in

Box VI.1. Indicators to monitor e-commerce developments

7KH3DUWQHUVKLSRQ0HDVXULQJ,&7IRU'HYHORSPHQWKDVSURSRVHGDVHWRILQWHUQDWLRQDOO\FRPSDUDEOHLQGLFDWRUVWREH FROOHFWHGE\DOOFRXQWULHVEDVHGRQDJUHHGGHƄQLWLRQVDQGVXJJHVWHGEUHDNGRZQVa They are kept to a minimum to limit WKHEXUGHQRQQDWLRQDOVWDWLVWLFDORIƄFHVDQGLQFUHDVHWKHDYDLODELOLW\RIDWOHDVWVRPHFRPSDUDEOHLQGLFDWRUV7KRVHUHODWHG WRHFRPPHUFHDUHWREHLQFOXGHGLQKRXVHKROGDQGHQWHUSULVHVXUYH\V • 3URSRUWLRQRILQGLYLGXDOVXVLQJWKH,QWHUQHWE\W\SHRIDFWLYLW\LQFOXGLQJq3XUFKDVLQJRURUGHULQJJRRGVRUVHUYLFHVr DQGq6HOOLQJJRRGVRUVHUYLFHVr • 3URSRUWLRQRIEXVLQHVVHVUHFHLYLQJRUGHUVRYHUWKH,QWHUQHW • 3URSRUWLRQRIEXVLQHVVHVSODFLQJRUGHUVRYHUWKH,QWHUQHW )RUFRXQWULHVLQWHUHVWHGLQREWDLQLQJPRUHGHWDLOHGLQIRUPDWLRQRQWKHQDWXUHDQGVFRSHRIHFRPPHUFHDQGWKDWKDYH WKHUHVRXUFHVWRXQGHUWDNHVXUYH\VLWPD\EHXVHIXOWRFRQVLGHUHIIRUWVXQGHUWDNHQE\%UD]LOWKH5HSXEOLFRI.RUHDDQG WKH(XURSHDQ8QLRQDVLOOXVWUDWHGEHORZ 7KH%UD]LOLDQKRXVHKROGVXUYH\RQ,&7FROOHFWVLQIRUPDWLRQRQWKHW\SHVRISURGXFWVDQGVHUYLFHVDFTXLUHGWKURXJKWKH Internet, on the method of payment, on the problems experienced when purchasing, and on reasons not to shop through WKH,QWHUQHW7KHEXVLQHVVVXUYH\RQ,&7FROOHFWVGDWDIRUWKHIROORZLQJLQGLFDWRUV ZZZFHWLFEU  • 3URSRUWLRQRIHQWHUSULVHVWKDWDFFHVVWKH,QWHUQHWE\W\SHRIEDUULHUIRURQOLQHVDOHV • 3URSRUWLRQRIHQWHUSULVHVWKDWGLGQRWVHOOYLD,QWHUQHWE\W\SHRIEDUULHUtPDLQREVWDFOHV ,QWKH5HSXEOLFRI.RUHDWKHDQQXDO6XUYH\RQWKH,QIRUPDWLRQ6RFLHW\LQFOXGHVWKHIROORZLQJLQGLFDWRUVDPRQJRWKHUV KWWSHQJQLDRUNU  • 9DOXH SHUFHQWDJH RI,QWHUQHWVDOHVE\W\SHRIFXVWRPHU %%%&%*  • 6KDUHRI,QWHUQHWVDOHVLQWRWDOWXUQRYHU • 0RVWLPSRUWDQWIDFWRUFRQVLGHUHGZKHQGHFLGLQJWRVHOOJRRGVRUVHUYLFHVYLDHFRPPHUFH • (IIHFWVSHUFHLYHGE\VHOOLQJJRRGVDQGVHUYLFHVYLDHFRPPHUFH • The way orders for goods and services were received (email, fax, direct contact, other). 7KHVWDWLVWLFDORIƄFHRIWKH(XURSHDQ8QLRQ(XURVWDWKDVFROOHFWHGYDULRXVHFRPPHUFHLQGLFDWRUVWKURXJKEXVLQHVV VXUYH\V KWWSHSSHXURVWDWHFHXURSDHXSRUWDOSDJHSRUWDOHXURVWDWKRPH  • (QWHUSULVHVKDYLQJSODFHGUHFHLYHGRUGHUVYLDFRPSXWHUQHWZRUNVWRVXSSOLHUVFXVWRPHUVORFDWHG D LQWKHLURZQ FRXQWU\ E LQRWKHU(XURSHDQ8QLRQFRXQWULHV F LQWKHUHVWRIWKHZRUOG • 7RWDOHOHFWURQLFSXUFKDVHVH[FOXGLQJ9$7 • (QWHUSULVHVWKDWKDYHSODFHGRUGHUVYLDDZHEVLWH • (QWHUSULVHVZKLFKVROGYLDDZHEVLWH %%%&%*  • 2EVWDFOHVWKDWOLPLWRUSUHYHQWWKHVHOOLQJYLDDZHEVLWH • (QWHUSULVHVpWRWDOWXUQRYHUIURPHFRPPHUFH • 6DOHVYLDDZHEVLWHDQGYLD(',W\SHPHVVDJHV SHUFHQWDJHRIWRWDOVDOHV  Source: UNCTAD. a )RUGHWDLOHGPHWKRGRORJLFDOUHFRPPHQGDWLRQVRQGHƄQLWLRQVVXEFDWHJRULHVDQGEUHDNGRZQVVHH,78 E DQG 81&7$'   84 INFORMATION ECONOMY REPORT 2015

developing countries are increasingly facilitating cloud services can be reliably accessed through wire- the deployment of broadband networks, often less networks. through public–private partnerships, and/or with Ensuring access to reliable power: Inadequate ƄQDQFH GHULYHG IURP JRYHUQPHQW UHYHQXHV RU ORDQV power infrastructure is a common bottleneck to ICT IURP LQWHUQDWLRQDO ƄQDQFLDO LQVWLWXWLRQV ,QWHUQDWLRQDO use and, by extension, to e-commerce adoption. bandwidth has improved in most countries, especially 3RZHU RXWDJHV DUH IUHTXHQW LQ PDQ\ GHYHORSLQJ through improved access to submarine cables, and countries, and smaller countries are often dependent more attention is now being devoted to national on their neighbours for a substantial part of their broadband networks and to regional interconnection power supply. IRU H[DPSOH IRU ODQGORFNHG FRXQWULHV  0RUHRYHU given that e-commerce sites require security software, (b) Logistics and trade facilitation having access to servers using encryption technology for Internet transactions is also important (chapter III). Strengthen the logistical and transport Implement effective communications regula- infrastructure: Smooth transport of goods is tions: Infrastructure improvements need to be ac- imperative for both domestic and cross-border companied by competent and effective regulation of HFRPPHUFH (IIHFWLYH RUGHU IXOƄOPHQW LV KHOSHG E\ the telecommunications markets. This includes lib- well-functioning road transport, land ports, postal HUDOL]DWLRQ RI PDUNHWV DQG UHJXODWRU\ LQWHUYHQWLRQ WR GHOLYHU\VHUYLFHVDQGFXVWRPV3RRUORJLVWLFVUHPDLQD promote competition. Competitive and interoperable barrier to e-commerce in many developing countries ICT markets, facilitated by independent regulators, and investment in infrastructure is often much help to deliver higher-quality, more reliable and afford- needed, especially outside the urban centres. There able services. As broadband usage grows in wireless- may be a lack of parcel delivery services – public and/ dependent developing country markets, policymakers or private – which can provide quick, traceable and and regulators also need to make radio spectrum reliable parcel deliveries and geographical coverage. available to communications operators to ensure that In this context, initiatives to strengthen the postal

)LJXUH}9,6WUDWHJLFIUDPHZRUNIRUSURPRWLQJHFRPPHUFH

Phases for developing a national Eight policy areas for strategy e-commerce growth

Assessment (or reassessment)

Review for results - Strategy based outcome formulation

Monitoring Implementation

Source: UNCTAD. CHAPTER VI : STRATEGY AND POLICY IMPLICATIONS 85

sector’s capacity to support e-commerce can be $GRSW HIƄFLHQW WUDGHIDFLOLWDWLRQ PHDVXUHV relevant. The postal system often remains the most )RU FURVVERUGHU HFRPPHUFH UHODWHG WR SK\VLFDO cost-effective way to send parcels, including across goods, bottlenecks in land ports, customs-related ERUGHUV ER[9, )XUWKHULVVXHVWRFRQVLGHULQFOXGH problems, complex export procedures and document the extent to which competition is permitted in the requirements can represent critical bottlenecks. Issues postal/delivery/courier market, and the possibilities of international returns and tax refunds also need to be for partnerships between the private sector and local DGGUHVVHG(IIRUWVWRLPSURYHWUDGHIDFLOLWDWLRQWKURXJK SRVWRIƄFHV VWDQGDUGL]DWLRQ KDUPRQL]DWLRQ DQG VLPSOLƄFDWLRQ Universal address and postcode systems: A of trade procedures and documentation, can help national addressing system is important to facilitate developing countries, especially LDCs, to integrate e-commerce. While there are examples of private LQWR JOREDO VXSSO\ FKDLQV LQFOXGLQJ WKURXJK %% initiatives to address the absence of addressing HFRPPHUFH VHHIRUH[DPSOHER[9, 81&7$'pV Automated System for Customs Data (ASYCUDA), V\VWHPV LQ VRPH FRXQWULHV VHH FKDSWHU ,9  D nationwide, universal system is desirable to avoid which automates border procedures and serves to IUDJPHQWDWLRQ ,Q %RWVZDQD IRU H[DPSOH WKH IDFLOLWDWHWUDGHLQPRUHWKDQGHYHORSLQJFRXQWULHV lack of a comprehensive system of street names KDVOHGWRVLJQLƄFDQWUHGXFWLRQVLQWKHWLPHQHHGHGIRU and property numbering was found to hamper clearance. In Uganda, for example, the average time commercial activity. Different service providers, such from payment to the release of goods from customs as telecommunications and other utilities providers, GURSSHGIURPGD\VLQ}-DQXDU\WRGD\V KDGGLIIHUHQWSURƄOHVIRUWKHVDPHFXVWRPHU8QGHU LQ-XQH0RUHRYHUDXWRPDWLQJDQGPRGHUQL]LQJ such a system, service providers do not have a way customs procedures often improve revenue collection  to authenticate the validity of contact information as well as reduce the costs of trade. 1 as provided by customer or users. Against this (c) Fostering an environment for e-commerce background, a project was initiated to unify the and online payment solutions QDWLRQDO DGGUHVVLQJ V\VWHP 7KH 838 FDQ SURYLGH technical assistance to member States in the areas of Strengthen the environment for online payments: physical addresses, national addressing standards, (QKDQFHG XVH RI HOHFWURQLF SD\PHQW V\VWHPV LV postcodes and postal databases. important for facilitating e-commerce. In countries where credit card use is low, alternative payment solutions – including mobile payments, cash on delivery Box VI.2. Facilitating cross-border e-commerce using postal services and escrow arrangements – are also relevant. Limited access to international payment services can represent %\-XO\SRVWVSODQWRVWDUWRIIHULQJDQHZRSWLRQDO D VLJQLƄFDQW EDUULHU WR HFRPPHUFH HVSHFLDOO\ IRU parcel service responding to the expanding need among micro and small enterprises interested in cross-border online retailers to move their wares across borders. In e-commerce. Governments should seek to foster a 1RYHPEHUWKH3RVWDO2SHUDWLRQV&RXQFLORI838 regulatory environment that is conducive to online DSSURYHGVSHFLƄFDWLRQVIRUDVHUYLFHFRYHULQJLWHPVXS payments and the development of adequate payment WRNLORJUDPV,WIHDWXUHVWUDFNDQGWUDFHRSWLRQVDQG solutions. This is important for consumers and other DƄYHEXVLQHVVGD\GHOLYHU\VWDQGDUGIURPWKHPRPHQW an item arrives in the destination country. Items delivered EX\HUVWRIHHOFRQƄGHQWDQGVHFXUHLQPDNLQJSXUFKDVHV under the new service will not require a signature on online, and for vendors to be assured of payment for GHOLYHU\ 6WDUWLQJ LQ  SRVWV ZLOO KDYH WR SURYLGH delivery of their products and services. qSUHDGYLFH GDWDr RI SDFNDJH FRQWHQWV WR FXVWRPV Promote the availability of e-commerce solutions: authorities, a measure expected to improve customs Although many global e-commerce platforms are clearance. The new service is part of a global integrated becoming more accessible around the world, there HFRPPHUFH VROXWLRQ GHYHORSHG E\ WKH 838 WR PHHW are opportunities for e-commerce platforms that are WKH QHHGV RI HFRPPHUFH VWDNHKROGHUV 7KH 3RVWDO tailored to local needs and opportunities. As noted 2SHUDWLRQV&RXQFLOKDVDOVRYDOLGDWHGDPHUFKDQGLVH return service, which will make it easier for customers to in earlier chapters, the development of e-commerce return unwanted goods to online retailers abroad. platforms has involved both the public sector (including WKHSRVWDOV\VWHP DQGWKHSULYDWHVHFWRU)RUH[DPSOH Source: q838JLYHVJOREDOHFRPPHUFHDERRVWr838 foreign investors have contributed greatly to the SUHVVUHOHDVH1RYHPEHU spread of new e-commerce platforms in sub-Saharan 86 INFORMATION ECONOMY REPORT 2015

%R[9, 8VLQJWKHSRVWDOVHFWRUWRVXSSRUWH[SRUWV %R[9, ,QGLDpV)',SROLF\UHODWHGWRHFRPPHUFH by micro and small enterprises :LWK VRPH } PLOOLRQ ,QWHUQHW XVHUV LQ  ,QGLD International trade is out of reach for many micro and offers a potentially attractive market for foreign small enterprises. The postal sector can help to make HFRPPHUFH FRPSDQLHV WR LQYHVW LQ ,QGLD DOORZV )', international trade more inclusive in this context. The LQ%%HFRPPHUFH,Q:DO0DUW,QGLDODXQFKHG ([SRUWD )¾FLO SURJUDPPH ZDV ƄUVW SLRQHHUHG E\ %UD]LO D%%SODWIRUPRQZKLFKRQO\UHJLVWHUHGPHPEHUVRI 3RVW %HWZHHQ  DQG  ([SRUWD )¾FLO HQDEOHG certain wholesale stores are eligible to transact online.a RYHU  VPDOO EXVLQHVVHV LQ %UD]LO ZKLFK KDG ,Q-XO\WKHVDPH\HDUWKH*RYHUQPHQWDQQRXQFHGWKDW never previously exported, to access international foreign companies that are manufacturing in India would PDUNHWV ,QVSLUHG E\ LWV VXFFHVV 838 ODXQFKHG WKH be allowed to sell their products over e-commerce (DV\([SRUWSURJUDPPHWRUHSOLFDWHWKH%UD]LOLDQPRGHO SODWIRUPV %\ FRQWUDVW IRUHLJQ HFRPPHUFH UHWDLOHUV LQRWKHUFRXQWULHV$VSDUWRIWKH,QWHJUDWLRQRI5HJLRQDO are prohibited from selling to Indian consumers. As a Infrastructure in South America initiative, the Governments UHVXOW SOD\HUV OLNH $PD]RQ DQG H%D\ DUH QRW DOORZHG RI6RXWK$PHULFDQFRXQWULHVVHOHFWHGSURMHFWVZLWK to compete with local e-commerce companies such DKLJKLPSDFWRQSK\VLFDOLQWHJUDWLRQLQWKHUHJLRQ2QHRI DV )OLSNDUW 6QDSGHDO +RPHVKRS DQG ,QGLDWLPHV WKHPq([SRUWLQJWKURXJKWKH3RVWIRU060(VrVHHNVWR Shopping. However, foreign companies are allowed to LPSOHPHQWDVHUYLFHVLPLODUWR%UD]LO3RVWpV([SRUWD)¾FLO establish e-marketplace platforms that can offer to sell SURGXFWV RI WKLUG SDUW\ VHOOHUV )RU H[DPSOH $PD]RQ ,Q (FXDGRU IRU H[DPSOH LW LV LPSOHPHQWHG E\ SXEOLF and private postal operators offering logistics services ODXQFKHG D WKLUGSDUW\ SODWIRUP LQ ,QGLD LQ -XQH  WKDWDOUHDG\KDVRYHU}VHOOHUVOLVWHGRQLWVZHEVLWHb IRUH[SRUWV&RUUHRVGHO(FXDGRUpV([SRUWD)¾FLOVXLWHRI VROXWLRQVLVJHDUHGWRVPDOODQGPHGLXPVL]HGHQWHUSULVHV Source: UNCTAD. ZLVKLQJ WR XVH D VLPSOLƄHG V\VWHP WR H[SRUW WKHLU a 6HH q:DO0DUW ,QGLD ODXQFKHV %% HFRPPHUFH PHUFKDQGLVH WKURXJK WKH SRVW $V RI   PLFUR SODWIRUPr The Hindu,  -XO\  DYDLODEOH DW KWWS VPDOO DQG PHGLXPVL]HG HQWHUSULVHV DQG DUWLVDQV KDG www.thehindu.com/business/Industry/walmart-india- XVHGWKH([SRUWD)¾FLOWRDYDOXHRIPRUH}PLOOLRQ ODXQFKHVEEHFRPPHUFHSODWIRUPDUWLFOH HFH DFFHVVHG)HEUXDU\  6RXUFH838 b 6HHq$PD]RQHQJDJLQJZLWKJRYHUQPHQWRQUHOD[LQJ)', LQ HFRPPHUFHr Indian Express  1RYHPEHU  available at KWWSDUWLFOHVHFRQRPLFWLPHVLQGLDWLPHV $IULFD7KLVVKRZVWKDWIRUHLJQGLUHFWLQYHVWPHQW )',  FRPQHZVBBHFRPPHUFH may provide funding, expertise and know-how that VSDFHPDUNHWSODFHPRGHOFHQWIGL DFFHVVHG})HEUX- can help the e-commerce sector to expand. At the DU\ . same time, in some countries there are concerns that opening up to global investors may crowd out local Raise the awareness and understanding of EXVLQHVVHV ER[ 9,  7KXV ERWK WKH SURV DQG WKH e-commerce laws: 2QFH UHOHYDQW ODZV DQG FRQV RI )', LQ GHYHORSLQJ WKH HFRPPHUFH LQGXVWU\ regulations are in place, they need to be communicated should be examined. transparently to producers and users of e-commerce VHUYLFHV)LQDOO\DGRSWHGODZVQHHGWREHHIIHFWLYHO\ (d) Strengthening the legal and regulatory enforced, and consumers as well as enterprises need framework to know how to seek redress if appropriate. The RUJDQL]DWLRQ RI QDWLRQDO SXEOLF FDPSDLJQV LQFOXGLQJ Implement and enforce relevant e-commerce through radio and television programmes) to inform laws and regulations: An adequate legal and about ways to protect consumers online can be a regulatory framework for e-commerce is of importance key element of awareness-raising efforts (chapter for all e-commerce stakeholders to reduce the risk of 9 0RUHRYHUDVWKHDUHDRIF\EHUOHJLVODWLRQLVVWLOOD transacting online and to encourage transparency. relatively new territory for the legislature and judiciary Despite progress in the past decade, considerable in many developing countries, there is a need for gaps remain in the cyberlaw coverage in parts of further capacity-building. the world. To facilitate cross-border e-commerce, it is important that national legislation in the areas of (e) Skills development e-transactions, consumer protection, data protection and privacy is compatible with that of other countries. Enhance e-literacy and consumer awareness: Aligning such laws with international legal instruments 5HOHYDQW SROLF\ PHDVXUHV DQG LQLWLDWLYHV PD\ EH is highly recommended in this context. needed to foster e-literacy in the population at CHAPTER VI : STRATEGY AND POLICY IMPLICATIONS 87 large and among consumers. Government and the (f) Promoting government e-procurement private sector should work together to address this challenge, from the revision of curricula at different Use e-procurement to incentivize enterprises stages in the education system to in-work training to use the Internet: Governments can set an DQG VSHFLDOL]HG SURIHVVLRQDO VNLOOV GHYHORSPHQW example for e-commerce through the use of Special programmes may also provide consumers JRYHUQPHQWHVHUYLFHVDQGHSD\PHQWV%\PDNLQJ with the relevant knowledge and skills to acquire e-procurement a requirement for public tenders, and use products purchased online, including raising they provide an incentive for small and medium- their awareness of their legal rights and obligations VL]HG HQWHUSULVHV WR LQFUHDVH WKHLU XVH RI WKH 2(&'D  Internet as a business tool. An often-cited example Build e-commerce skills among small of good practice is ChileCompra (Chile), a public, businesses: In many countries there are skill electronic system for purchasing and hiring based shortages within the ICT sector and elsewhere that on an Internet platform that caters to companies, affect the capacity of the private sector to take SXEOLF RUJDQL]DWLRQV DQG FLWL]HQV5 Georgia offers DGYDQWDJH RI HFRPPHUFH 0RUH VRSKLVWLFDWHG another success case. Since the Government e-commerce applications require considerable FUHDWHG DQ HSURFXUHPHQW SODWIRUP LQ  DOO technical skills to handle data mining and analysis tendered government purchases are conducted methods and systems. The lack of human resources WKURXJKDFHQWUDOL]HGELGGLQJSODWIRUPRSHUDWHGE\ and expertise represents a major barrier to the WKH&RPSHWLWLRQDQG6WDWH3URFXUHPHQW$JHQF\,W implementation of e-commerce projects. Data has helped to streamline procurement processes, scientists are both in short supply and expensive to increase competition, enhance transparency HPSOR\ LQ GHYHORSLQJ HFRQRPLHV :RUOG (FRQRPLF and reduce the scope for corruption (Luijken and )RUXP   0LFUR DQG VPDOO HQWHUSULVHV QHHG 0DUWLQL  Similarly, in Albania, the introduction training in how to design e-commerce business RI DQ HSURFXUHPHQW V\VWHP LQ  KDV KDG strategies, evaluate different e-commerce tools and positive results in the form of increased competition platforms and create compelling advertisements, DQGFRQVLGHUDEOHFRVWVDYLQJV /XLMNHQDQG0DUWLQL 4 while paying attention to quality and rapid delivery.   In this context it may be useful for Governments at national and local levels to involve intermediaries (g) Raising the awareness of all stakeholders (such as chambers of commerce and business associations) in the provision of training. They are Raise general awareness about e-commerce: often in a privileged position to transmit relevant A lack of awareness and inertia may hamper the information and knowledge about e-commerce to transition from traditional and habitual ways of doing WKHLU PHPEHUV 7KH 2QOLQH 6KRS $VVRFLDWLRQ LQ business, thus placing enterprises at a competitive 6XLFKDQJ &RXQW\ LQ &KLQD FKDSWHU ,9  LV D JRRG disadvantage. There are various examples of illustration. proactive efforts by Governments to inform and Explore the scope for women entrepreneurs to educate consumers and businesses, as well as engage in e-commerce: Governments may examine Governments, on the implications of e-commerce. how women entrepreneurs may best tap e-commerce Some Governments have raised the visibility of RSSRUWXQLWLHV %% VROXWLRQV PD\ DOORZ JURZWK e-commerce through advertising on billboards, radio, oriented women’s micro and small enterprises to scale television and the Internet to encourage consumers up and connect with international value chains in both to buy online. In Uganda, the non-governmental goods and services. Women’s smaller businesses RUJDQL]DWLRQ :RPHQ RI 8JDQGD 1HWZRUN DQGPLFURHQWUHSUHQHXUVPD\DOVRJDLQIURP%&DQG has undertaken various advocacy and training && WUDQVDFWLRQV E\ XWLOL]LQJ HFRPPHUFH SODWIRUPV initiatives aimed at policy intermediaries such as to reach domestic and foreign markets. Women the Government, chambers of commerce, business entrepreneurs, who are often restricted in their access and trade associations, and professional education WRFDSLWDOFDQEHQHƄWIURPHFRPPHUFHDQGLWVDELOLW\ institutions that have helped in raising national WR LQFUHDVH HIƄFLHQFLHV DQG SURƄWDELOLW\ ZLWK OLPLWHG awareness on ICTs and women’s entrepreneurship, LQYHVWPHQW 81&7$'D  including e-commerce. 88 INFORMATION ECONOMY REPORT 2015

B. E-COMMERCE pronounced in the case of products that can be POLICIES AT THE delivered remotely, such as various professional and business processing services, music, e-books and INTERNATIONAL movie downloads, software and other digital products. LEVEL %XWWKHXVHRIHFRPPHUFHSODWIRUPVKDVDOVREHHQ found to bring down costs for trade in goods (Lendle Considering the global nature of the Internet, cross- HWDO DQGDVQRWHGLQFKDSWHU,,LQWHUQDWLRQDO border e-commerce brings about greater need for shipments of parcels and small packets has expanded policy coordination at the regional and multilateral level. in recent years as a result of e-commerce. Cross- A favourable international environment for e-commerce border e-commerce simultaneously affects, and is involves trade rules that are simple, consistent, affected by, international trade rules at multilateral and transparent, non-discriminatory and enforceable. In view bilateral levels. of national differences and the diversity among countries, 7KH :72 LV WKH SULQFLSDO PXOWLODWHUDO LQVWLWXWLRQ ensuring compatibility among various national regulatory JRYHUQLQJ LQWHUQDWLRQDO WUDGH (FRPPHUFH WRXFKHV frameworks for e-commerce is essential but also a major XSRQ VHYHUDO :72 DJUHHPHQWV &RQVHTXHQWO\ FKDOOHQJH FKDSWHU}9  pursuant to the ministerial decision that launched the With the expansion of e-commerce, new barriers to :72ZRUNSURJUDPPHRQHFRPPHUFHLQ9 the international trade are emerging. National legal barriers General Council designated issues to be examined VXFK DV VWULQJHQW ƄQDQFLDO OLFHQVLQJ DJUHHPHQWV E\WKH:72FRXQFLOVFRQFHUQHGZLWKWUDGHLQJRRGV and restrictions on the ability of foreign e-commerce services and intellectual property rights, as well as the companies to enter and engage in local e-commerce Committee on Trade and Development. markets have been noted 6ZHGHQ 1DWLRQDO%RDUG RI 7KH%DOL0LQLVWHULDO'HFLVLRQLQRQHFRPPHUFH 7UDGH  . Some measures may aim at protecting renewed the moratorium on customs duties on local businesses from foreign competitors. )RUH[DPSOH HOHFWURQLF WUDQVPLVVLRQV LQLWLDWHG LQ  DQG &KLQHVH ƄQDQFLDO SD\PHQW OLFHQVLQJ DJUHHPHQWV PD\ urged that discussions should focus on a range of KDYHSUHYHQWHGH%D\IURPRIIHULQJ&KLQHVHFRQVXPHUV LVVXHVLQFOXGLQJWKHqWUDGHUHODWHGDVSHFWVRILQWHU equivalent e-payment features to those provided alia, enhancing Internet connectivity and access to through Alipay on the Taobao platform. This reportedly information and telecommunications technologies FRQWULEXWHG WR H%D\pV H[LW IURP WKH PDUNHW LQ  and public Internet sites, the growth of mobile In India, foreign e-commerce companies are prohibited telephony, electronically delivered software, cloud IURP VHOOLQJ WKHLU RZQ SURGXFWV ER[ 9,  ,Q DGGLWLRQ FRPSXWLQJ WKH SURWHFWLRQ RI FRQƄGHQWLDO GDWD some Governments and other cloud service customers SULYDF\ DQG FRQVXPHU SURWHFWLRQr11 Although no KDYHHQDFWHGGDWDORFDOL]DWLRQODZVUHƅHFWLQJFRQFHUQV formal conclusions have yet been issued by the about data being kept on servers in other jurisdictions bodies conducting the work programme, an emerging .VKHWUL81&7$'E . consensus was that the provisions of their respective International dialogue and cooperation is crucial to agreements appear to be technology neutral, hence promote the smooth exchange of e-commerce while at apply to trade in all its forms, including trade via the WKHVDPHWLPHVSUHDGLQJEHQHƄWVRIHFRPPHUFHPRUH Internet. widely. In the following sections, special attention is given (YHQ EH\RQG WKH UHPLW RI WKH ZRUN SURJUDPPH SHU to international trade rules, taxation challenges, and the se, e-commerce and other forms of ICT-enabled trade role of development partners in support of capacity- KDYH SURYHG UHOHYDQW WR WKH RQJRLQJ :72 ZRUN RQ EXLOGLQJ 5DWKHU WKDQ DQ H[KDXVWLYH WUHDWPHQW RI WKH VHUYLFHV FODVVLƄFDWLRQ RI WKH &RPPLWWHH RQ 6SHFLƄF relevant issues, the discussion mainly serves to highlight Commitments, a sub-body of the Council for Trade some important areas in need of more attention. in Services, as well as to work carried out under WKH $JUHHPHQW RQ 7HFKQLFDO %DUULHUV WR 7UDGH WKH 1. E-commerce and international trade Information Technology Agreement, and discussions rules on trade facilitation (see below). In addition, online trade has been subject to negotiations under the 2QH HIIHFW RI HFRPPHUFH LV DQ H[SDQVLRQ RI auspices of the current trade round, the Doha international trade. This is likely to be the most Development Agenda. CHAPTER VI : STRATEGY AND POLICY IMPLICATIONS 89

However, in light of the slow progress at the it through improved transparency, faster customs multilateral level, some countries have included clearance, or the facilitation of express shipments. chapters or other provisions on e-commerce in various bilateral and regional free trade agreements. 2. Taxation concerns related to Such agreements address to varying degrees issues e-commerce RI UHOHYDQFH WR HFRPPHUFH LQFOXGLQJ GHƄQLWLRQV customs duties, transparency, non-discrimination Taxation has emerged as a particularly relevant issue and regulatory issues, electronic authentication, due to the large revenues being generated through FRQVXPHUSURWHFWLRQDQGFRRSHUDWLRQ)RUH[DPSOH e-commerce. Increased reliance on e-commerce all free trade agreements to which the United States KDV QXPHURXV SRWHQWLDO LPSOLFDWLRQV (FRPPHUFH RU WKH (XURSHDQ 8QLRQ DUH SDUW\ QRZ LQFOXGH weakens the international tax concept that allocates e-commerce chapters. The e-commerce dimension MXULVGLFWLRQDO WD[ FODLPV RYHU SURƄWV RI PXOWLQDWLRQDO is also under discussion in the ongoing negotiations companies based on physical presence. It raises related to the Trade in Services Agreement, the issues such as where to tax non-resident e-commerce 7UDQV3DFLƄF 3DUWQHUVKLS DQG WKH 7UDQVDWODQWLF businesses, how to assess intragroup transactions, 7UDGHDQG,QYHVWPHQW3DUWQHUVKLS how to classify digital goods, how to identify tax payers, and where and how to collect consumption 'XULQJ WKH  :72 %DOL 0LQLVWHULDO VRPH QLQH tax, as well as issues of enforcement. years of negotiation reached consensus on the VRFDOOHG 7UDGH )DFLOLWDWLRQ $JUHHPHQW 7)$  The treaty concept of permanent establishment is The agreement contains provisions for expediting said to impact negatively on developing countries the movement, release and clearance of goods. It DV LW SUHFOXGHV FRXQWULHV IURP WD[LQJ SURƄWV GHULYHG also sets out measures for effective cooperation from business activities within their jurisdictions, between customs and other authorities as well as unless these activities can be connected to a physical cross-border cooperation by border authorities. HVWDEOLVKPHQW )RUJLRQH   7KXV GHYHORSLQJ It contains provisions for technical assistance countries in which foreign e-commerce businesses are in the majority may be unable to collect tax revenue and capacity-building and special and differential where the businesses have no physical presence treatment provisions that allow developing within their jurisdictions. countries, including LDCs, to determine when they ZLOOLPSOHPHQWVSHFLƄFDVSHFWVRIWKHDJUHHPHQW,W Among developed countries, particular concerns have been expressed that e-commerce may exacerbate allows them to identify provisions that they will only the risk of tax base erosion in individual economies. be able to implement upon the receipt of technical ,QDQ2(&'7DVN)RUFHRQWKH'LJLWDO(FRQRP\ assistance and support for capacity-building. QRWHGWKDW 2(&'E  Technical assistance for trade facilitation is WKHDELOLW\WRFHQWUDOL]HLQIUDVWUXFWXUHDWDGLVWDQFHIURP SURYLGHG E\ WKH :72 :72 PHPEHUV DQG RWKHU a market jurisdiction and conduct substantial sales of LQWHUJRYHUQPHQWDO RUJDQL]DWLRQV LQFOXGLQJ WKH goods and services into that market from a remote :RUOG %DQN WKH :RUOG &XVWRPV 2UJDQL]DWLRQ location, combined with increasing ability to conduct :&2 DQG81&7$'838DQG:&2DUHZRUNLQJ substantial activity with minimal use of personnel, WRJHWKHURQLPSURYLQJPHUFKDQGLVHƅRZVUHVXOWLQJ generates potential opportunities to achieve [base from e-commerce, and this is expected to HURVLRQ DQG SURƄW VKLIWLQJ@ E\ IUDJPHQWLQJ SK\VLFDO 14 LQFUHDVH DV D UHVXOW RI WKH :72 7)$ UNCTAD operations to avoid taxation. is supporting national policymakers and the international community as a whole in the area of ,Q WKH 8QLWHG .LQJGRP IRU H[DPSOH $PD]RQ trade facilitation.15 SDUWLFLSDWHG LQ D  KHDULQJ RUJDQL]HG E\ WKH 3DUOLDPHQWDU\ 3XEOLF $FFRXQWV &RPPLWWHH 7KH LPSOHPHQWDWLRQ RI WKH 7)$ ZRXOG HQFRXUDJH :KHUHDV $PD]RQ KDG UHSRUWHG WXUQRYHU RI countries to cut red tape and make customs €}PLOOLRQ }PLOOLRQ IRUIRULWVFRPSDQ\ SURFHGXUHV PRUH HIƄFLHQW WKHUHE\ HQDEOLQJ WKHP LQWKH8QLWHG.LQJGRPLWKDGVKRZQDWD[H[SHQVH to integrate into global value chains, including by RI RQO\ €} PLOOLRQ } PLOOLRQ  0RUHRYHU WKH leveraging e-commerce. Several of the measures (XURSHDQZLGHWXUQRYHURI$PD]RQ(86DUOZKLFK included have a direct bearing on e-commerce, be DPRXQWHGWRb}ELOOLRQ }ELOOLRQ KDGUHVXOWHG 90 INFORMATION ECONOMY REPORT 2015

LQWD[HVRIRQO\b}PLOOLRQ }PLOOLRQ $PD]RQ 3. Support by development partners KDG DOVR H[SODLQHG WKDW IRU  VDOHV IURP WKH 8QLWHG .LQJGRP DFFRXQWHG IRU } SHU FHQW RI As noted above, there is a need for capacity-building all international sales outside the United States. DQGWHFKQLFDOVXSSRUWLIPRUHFRXQWULHVDUHWREHQHƄW 'HVSLWH KDYLQJ RYHU } VWDII DQG SK\VLFDO from e-commerce. Assistance from the international LQYHQWRU\LQWKH8QLWHG.LQJGRPWKHFRPSDQ\SDLG community can help in several ways. Support may little corporate tax in that country. include the provision of training, policy advice, 5HPRWH VXSSOLHV RI GLJLWDO SURGXFWV WR FRQVXPHUV strategy formulation and other forms of assistance. without any direct or indirect physical presence of $WDFRXQWU\OHYHOVSHFLƄFVXSSRUWIURPGHYHORSPHQW the supplier in the consumer’s jurisdiction furthermore partners may address areas such as e-commerce SUHVHQWFKDOOHQJHVWRYDOXHDGGHGWD[ 9$7 V\VWHPV UHDGLQHVV DVVHVVPHQWV ƄQDQFLQJ RI LQIUDVWUXFWXUH as they may often result in no or an inappropriately low investment, support to the development of legal and DPRXQWRI9$7EHLQJFROOHFWHG7KLVFDQFUHDWHSRWHQWLDO regulatory frameworks, and the building of capacity competitive pressures on domestic suppliers. The among different stakeholders. 2(&'7DVN)RUFHLGHQWLƄHGWKHFROOHFWLRQRI9$7UHODWHG A number of existing initiatives have been implemented WR%&WUDQVDFWLRQVDVDSUHVVLQJLVVXHWKDWQHHGHG WKURXJK YDULRXV LQWHUQDWLRQDO RUJDQL]DWLRQV VXFK DV WREHDGGUHVVHGWRFUHDWHDOHYHOSOD\LQJƄHOGEHWZHHQ WKH &RPPRQZHDOWK VHFUHWDULDW ,7& 2(&' 838 IRUHLJQDQGGRPHVWLFVXSSOLHUV 2(&'E  :&2 WKH :RUOG %DQN WKH (XURSHDQ 8QLRQ WKH Whereas concerns related to tax implications from &RXQFLORI(XURSHDQGRWKHUV81&7$'pVDVVLVWDQFH e-commerce are likely to be more pronounced in and technical advice in the area of e-commerce come countries where the uptake of e-commerce is LQWKUHHPDLQIRUPVVXSSRUWZLWKODZUHIRUPVUHODWHG UHODWLYHO\ KLJK ƄQGLQJ ZD\V WR DGGUHVV UHODWHG WR HFRPPHUFH VWDWLVWLFDO FDSDFLW\EXLOGLQJ DQG concerns are of relevance to all countries. QDWLRQDO,&7SROLF\UHYLHZVDQGWUDLQLQJ ER[9, 

%R[9, 81&7$'VXSSRUWWRHFRPPHUFHGHYHORSPHQWLQGHYHORSLQJFRXQWULHV

7KH81&7$',&7DQGODZUHIRUPSURJUDPPHDVVLVWVFRXQWULHVLQWKHGHYHORSPHQWRIHFRPPHUFHOHJLVODWLRQ5HOHYDQW laws should ensure trust in online transactions, ease the conduct of domestic and international trade online, and offer OHJDOSURWHFWLRQIRUXVHUVDQGSURYLGHUVRIHFRPPHUFHDQGHJRYHUQPHQWVHUYLFHV6LQFHWKHSURJUDPPHKDV VXSSRUWHGRYHUGHYHORSLQJFRXQWULHVLQ$IULFD$VLDDQG/DWLQ$PHULFDDWERWKUHJLRQDODQGQDWLRQDOOHYHOV$VVLVWDQFH LQFOXGHVUHYLHZVRIGUDIWRUH[LVWLQJOHJLVODWLRQGUDIWLQJRIOHJLVODWLRQKDUPRQL]HGZLWKUHJLRQDODQGLQWHUQDWLRQDOOHJDO IUDPHZRUNVRUJDQL]DWLRQRIQDWLRQDOVWDNHKROGHUVpFRQVXOWDWLRQVRUJDQL]DWLRQRIWUDLQLQJZRUNVKRSVDQGWKHEULHƄQJRI parliamentarians. A second area in which UNCTAD assists countries concerns the production of statistics on the information economy to support evidence-based policymaking. Assistance is offered through regional training courses, national workshops and other advisory services. Core indicators on ICT use by enterprises, including e-commerce, on the value added DQGZRUNIRUFHRIWKH,&7VHFWRUDQGRQLQWHUQDWLRQDOWUDGHLQ,&7JRRGVDUHFROOHFWHGE\81&7$'DQQXDOO\2QJRLQJ development of methodological reference materials, and of new or improved indicators, is achieved in collaboration with WKH3DUWQHUVKLSRQ0HDVXULQJ,&7IRU'HYHORSPHQWWRHQVXUHLQWHUQDWLRQDOFRPSDUDELOLW\DQGHIIHFWLYHXVHRIDYDLODEOH expertise and resources. UNCTAD can undertake national ICT policy reviews upon request. Such reviews seek to assist countries in building and maintaining a dynamic and responsive ICT policy environment. They aim to ensure that national ICT programmes become an instrument for supporting national development, helping local industry compete in a knowledge-based, global economy, and promoting economic growth and exports. The focus of the reviews is determined in a dialogue with the requesting country. )RUH[DPSOHWKH*RYHUQPHQWRI(J\SWLQUHTXHVWHG81&7$'WRDVVLVWLQLWVGHYHORSPHQWRIDQDWLRQDOHFRPPHUFH strategy, establishing short-, medium- and long-term targets and policy recommendations for implementation.

81&7$'DOVRRIIHUVDWUDLQLQJFRXUVHHQWLWOHG(FRPPHUFHIRU3UDFWLWLRQHUV7KLVLVGHVLJQHGWRKHOSLGHQWLI\FKDOOHQJHV RI HFRPPHUFH PD[LPL]H LWV SRVLWLYH LPSDFW RQ EXVLQHVVHV DQG IRVWHU G\QDPLF DQG UHOLDEOH HFRPPHUFH VROXWLRQV LQ developing countries. The course equips participants to engage in structural reforms, promoting e-commerce or setting up new businesses. Source: UNCTAD. CHAPTER VI : STRATEGY AND POLICY IMPLICATIONS 91

C. CONCLUDING %XW HYHU\RQH ZLOO QRW EHQHƄW DXWRPDWLFDOO\ IURP REMARKS HFRPPHUFH$VKLIWIURPRIƅLQHWRRQOLQHFRPPHUFH changes the ways in which consumers and enterprises The global landscape for e-commerce is evolving interact. Some companies are better equipped to rapidly. With the changing ICT landscape, the past adapt to such transformations. Thus, there is a need decade has seen e-commerce transform how for more research on the broader implications of EXVLQHVV LV FRQGXFWHG (QWHUSULVHV RI DOO VL]HV e-commerce. and across industries in developing countries are $ ƄUVW DUHD WR H[DPLQH FRQFHUQV WKH GLVWULEXWLRQDO LQFUHDVLQJO\ FRPSHOOHG WR OHDUQ KRZ WR EHQHƄW IURP effects of e-commerce. How are the gains achieved e-commerce in order to stay competitive. As in other from online transactions shared between large and areas of the world economy, developing countries are small enterprises, between global and local businesses, assuming a greater role. Thanks to new technology, between different segments of the private sector, and improved connectivity and innovative business the like. As noted in chapter II, there is a relatively high models, e-commerce is becoming relevant also in low- level of market concentration among web retailers, income countries. Indeed, some of the most dynamic possibly suggesting that economies of scale and scope developments are witnessed in parts of sub-Saharan may favour larger enterprises over smaller ones. Africa and Asia. A second area concerns the impact on employment. Nonetheless, there is scope for making the To what extent is e-commerce leading to a net creation e-commerce phenomenon more inclusive and or loss of jobs? How is the quality and remuneration EHQHƄFLDO $V VKRZQ LQ WKLV UHSRUW WKH H[WHQW WR of different jobs affected when more activities are which enterprises are using ICTs to buy and sell transacted online? There is to date little knowledge goods and services varies greatly, indicating that the about such questions. SRWHQWLDO LV IDU IURP IXOO\ H[SORLWHG 0XFK UHPDLQV to be done to bridge the remaining gaps in access A third area that may need to be further examined to the Internet and to make such access more relates to the retail industry. What is the impact of a affordable. Similarly, the availability of e-commerce transition from high-street retail to online retail on urban platforms and payment solutions leveraging centres and rural areas. Whereas there has been a clear technology can be further improved in many trend towards more bricks-and-mortar companies developing countries in ways that correspond to introducing online and mobile sales channels to WKHLUVSHFLƄFQHHGVDQGFDSDELOLWLHV(IIRUWVLQWKRVH meet competition from pure-play web retailers, there areas should be complemented with improvements has recently been cases of e-commerce companies in the legal framework at national and international HVWDEOLVKLQJ D SK\VLFDO SUHVHQFH )RU H[DPSOH LQ levels to foster trust in online commerce. 0DUFKWKH$OLEDED*URXSDQQRXQFHGWKDWLWZDV IRUPLQJDMRLQWYHQWXUHZLWK,QWLPH5HWDLODFRPSDQ\ It is well worth pursuing such efforts. There are that owns department stores and commercial real VLJQLƄFDQW EHQHƄWV WR EH DFKLHYHG IRU FRQVXPHUV estate assets in mainland China. enterprises and Governments from a higher reliance on e-commerce. New evidence presented in this The e-commerce landscape will continue to evolve UHSRUWSRLQWVIRUH[DPSOHWRVLJQLƄFDQWSURGXFWLYLW\ in various directions, and Governments will face a gains from selling on the Internet and that such effects continuous challenge in keeping up to speed with are particularly important for smaller enterprises and in WKHVHGHYHORSPHQWV)URPDSROLF\SHUVSHFWLYHLWLV VHUYLFHVLQGXVWULHV(QKDQFLQJWKHDELOLW\RIPLFURDQG important to try to create an environment that provides small enterprises to explore e-commerce options, to as equal opportunities as possible for stakeholders in tap the emerging opportunities in online retail and to different locations and areas of society to take part in integrate better in global supply chains would help to the process. In this context, international cooperation unleash their potential and spur economic growth in and effective dialogue between policymakers and developing countries. other stakeholders will remain instrumental. 92 INFORMATION ECONOMY REPORT 2015

NOTES

1 6HHKWWSZZZERWVSRVWFREZGRFERWVZDQDBSRVWBQHZVOHWWHUBHGLWHGSGI DFFHVVHG)HEUXDU\ 

 6HHKWWSZZZXSXLQWHQDFWLYLWLHVDGGUHVVLQJDERXWDGGUHVVLQJKWPO DFFHVVHG)HEUXDU\ 

 )RUPRUHLQIRUPDWLRQVHHKWWSZZZDV\FXGDRUJ DFFHVVHG)HEUXDU\ 

4 $VWXG\RIHFRPPHUFHXVHDPRQJPLFURHQWHUSULVHVLQUXUDO0H[LFRIRXQGWKDWHFRPPHUFHFRXOGQRWEHDUHDOLVWLF RSWLRQWRVXSSRUWDUWLVDQVZLWKRXWVLJQLƄFDQWWUDLQLQJLQEDVLF,&7VNLOOVQHHGHGWRH[SHGLWHJHQHUDOEXVLQHVVWDVNV 5HKEHLQ 

5 6HHKWWSZZZFKLOHFRPSUDFO DFFHVVHG)HEUXDU\ 

 6HH DOVR q2SHQ*RY 9RLFHV +RZ *HRUJLD LV KDQGOLQJ SURFXUHPHQW WUDQVSDUHQF\r 6XQOLJKWIRXQGDWLRQFRP } -DQXDU\  DYDLODEOH DW KWWSVXQOLJKWIRXQGDWLRQFRPEORJRSHQJRYYRLFHVKRZJHRUJLDLV handling-procurement-transparency/ DFFHVVHG)HEUXDU\ 

 See KWWSNLFZRXJQHWRUJQHZ DFFHVVHG)HEUXDU\ 

 6HHq(%D\LVH[SHFWHGWRFORVHLWVDXFWLRQVLWHLQ&KLQDrThe New York Times'HFHPEHUDYDLODEOHDW KWWSZZZQ\WLPHVFRPWHFKQRORJ\HED\KWPO"IWD \ BU  DFFHVVHG)HEUXDU\ 

9 :70,1  '(&

 :7/

11 :7/ DYDLODEOH DW KWWSZWRRUJHQJOLVKWKHZWRBHPLQLVWBHPFBHGHVFLBHKWP DFFHVVHG } )HEUXDU\  

 &RSLHVRIDOOUHJLRQDOWUDGHDJUHHPHQWVLQIRUFHDQGQRWLƄHGWRWKH:72FDQEHFRQVXOWHGLQWKH:72GDWDEDVHDW KWWSUWDLVZWRRUJ8,3XEOLF0DLQWDLQ57$+RPHDVS[ DFFHVVHG)HEUXDU\ 

 )RUWKHDJUHHGWH[WVHHKWWSZZZZWRRUJHQJOLVKWUDWRSBHWUDGIDBHWUDGIDBHKWP DFFHVVHG)HEUXDU\ 

14 6HHIRUH[DPSOHWKHVSHHFKE\WKH6HFUHWDU\*HQHUDORI:&2DYDLODEOHDWKWWSQHZVXSXLQWPXOWLPHGLDDXGLR ZRUOGFXVWRPVRUJDQL]DWLRQFKLHIRQHFRPPHUFHERRP DFFHVVHG)HEUXDU\ 

15 6HHKWWSXQFWDGRUJHQ3XEOLFDWLRQV/LEUDU\GRPWFVGBHQSGI DFFHVVHG)HEUXDU\ 

 ([SUHVVHGVKLSPHQWVDUHVSHFLƄFDOO\FRYHUHGE\DUWLFOHRQH[SHGLWHGVKLSPHQWV

 6HH PLQXWHV IURP WKH &RPPLWWHH DYDLODEOH DW KWWSZZZSXEOLFDWLRQVSDUOLDPHQWXNSDFPFPVHOHFW FPSXEDFFKWP DFFHVVHG)HEUXDU\  CHAPTER VI : STRATEGY AND POLICY IMPLICATIONS 93

REFERENCES

$JZX(  *HQHUDWLRQV;DQG

)RUJLRQH$  &OLFNVDQGPRUWDU7D[LQJPXOWLQDWLRQDOEXVLQHVVSURƄWVLQWKHGLJLWDODJHSeattle University Law Review.   )RUUHVWHU  )RUUHVWHUUHDGLQHVVLQGH[(FRPPHUFH)RUUHVWHU5HVHDUFK,QF&DPEULGJH0DVVDFKX- setts. )UDXPHQL %0   (FRPPHUFH 0HDVXUHPHQW DQG PHDVXUHPHQW LVVXHV American Economic Review.   t *UDQGRQ((DQG3HDUVRQ-0  (OHFWURQLFFRPPHUFHDGRSWLRQ$QHPSLULFDOVWXG\RIVPDOODQGPHGLXP US businesses. Information & Managementt *XLKDQJ*4LDQ/DQG*XDQJIDQ/  (IIHFWVRIFOXVWHUVRQ&KLQDpVHFRPPHUFH(YLGHQFHIURPWKH-XQSX Taobao village. International Journal of Business and Management  t +ROOHQVWHLQ+DQG:RHUWHU0  ,QWHUDQGLQWUDƄUPGLIIXVLRQRIWHFKQRORJ\7KHH[DPSOHRIHFRPPHUFH $QDQDO\VLVEDVHGRQ6ZLVVƄUPOHYHOGDWD.2)ZRUNLQJSDSHU1R.2)6ZLVV(FRQRPLF,QVWLWXWH 6ZLVV)HGHUDO,QVWLWXWHRI7HFKQRORJ\=XULFK +RXUDOL0)DWKLDQ00RQWD]HUL$DQG+RXUDOL0  $PRGHOIRUHUHDGLQHVVDVVHVVPHQWRI,UDQLDQVPDOO and medium enterprises. Journal of Faculty of Engineering.  t ,QQRSD\  2QOLQHSD\PHQWVt0RYLQJEH\RQGWKHZHE,QQRSD\%9$PVWHUGDP ,78  :6,6RXWFRPHGRFXPHQWV,78*HQHYD$YDLODEOHDWKWWSZZZLWXLQWZVLVGRFXPHQWVGRFBPXOWL DVS"ODQJ HQ LG _ DFFHVVHG)HEUXDU\  ,78  0HDVXULQJWKHLQIRUPDWLRQVRFLHW\,78*HQHYD$YDLODEOHDWKWWSZZZLWXLQWHQ,78'6WDWLV- WLFV'RFXPHQWVSXEOLFDWLRQVPLV0,6BZLWKRXWB$QQH[BSGI DFFHVVHG)HEUXDU\  ,78 D  :6,6 RXWFRPH GRFXPHQWV ,78 *HQHYD $YDLODEOH DW KWWSZZZLWXLQWZVLVLPSOHPHQWD- WLRQIRUXPLQFGRFRXWFRPH9(SGI DFFHVVHG)HEUXDU\  ,78 E  Manual for Measuring ICT Access and Use by Households and Individuals, 2014 Edition. ITU. *HQHYD$YDLODEOHDWKWWSZZZLWXLQWHQ,78'6WDWLVWLFV3DJHVSXEOLFDWLRQVPDQXDODVS[ DFFHVVHG })HEUXDU\  ,78DQG838  ,&7VQHZVHUYLFHVDQGWUDQVIRUPDWLRQRIWKHSRVW,78DQG838%HUQHDQG*HQHYD $YDLODEOH DW KWWSZZZLWXLQW,78'WHFKUXUDOBWHOHFRP5XUDOB3XEOLFDWLRQVGFFBOLYUH8LW(QSGI DFFHVVHG })HEUXDU\  .DQ.  (FRPPHUFHDFFHOHUDWLQJUXUDOGHYHORSPHQW&DVHVWXG\RIIXUQLWXUHPDQXIDFWXULQJLQ6KDMLYLOODJH (FRQRPLFDQG6RFLDO&RPPLVVLRQIRU$VLDDQGWKH3DFLƄF%DQJNRN$YDLODEOHDWKWWSZZZXQHVFDSRUJ LGGHYHQWVFLFW0U.DQ(FRPPHUFHLQUXUDODUHDV(6&$3SGI DFFHVVHG)HEUXDU\  .HDUQH\$7  2QOLQHUHWDLOLVIURQWDQGFHQWUHLQWKHTXHVWIRUJURZWK7KH*OREDO5HWDLO(&RPPHUFH Index. .RQLQJV-DQG5RRGKRIW)  7KHHIIHFWRIHEXVLQHVVRQFRUSRUDWHSHUIRUPDQFH)LUPOHDGLQJHYLGHQFH IURP%HOJLXPDe Economist  t .RUHD,QWHUQHWDQG6HFXULW\$JHQF\  6XUYH\RQWKH,QWHUQHWXVDJH$YDLODEOHDWKWWSLVLVNLVDRUNU HQJERDUG"SDJH,G  EEV,G  LWHP,G  DFFHVVHG)HEUXDU\  .30*  ,QGLDIUDXGVXUYH\$YDLODEOHDWKWWSZZZNSPJFRP)5IU,VVXHV$QG,QVLJKWV$UWLFOHV3XE- OLFDWLRQV'RFXPHQWV,QGLD)UDXG6XUYH\SGI DFFHVVHG)HEUXDU\  .VKHWUL1  %DUULHUVWRHFRPPHUFHDQGFRPSHWLWLYHEXVLQHVVPRGHOVLQGHYHORSLQJFRXQWULHV$FDVH study. Electronic Commerce Research and Applications.  t .VKHWUL1  &ORXGFRPSXWLQJLQGHYHORSLQJHFRQRPLHVIEEE Computer  t .VKHWUL1  Cybercrime and Cybersecurity in the Global South3DOJUDYH0DFPLOODQ+RXQGPLOOV%DVLQJ- stoke. .VKHWUL 1   %LJ GDWDV LPSDFW RQ SULYDF\ VHFXULW\ DQG FRQVXPHU ZHOIDUH Telecommunications Policy.   t CHAPTER VI : STRATEGY AND POLICY IMPLICATIONS 95

.VKHWUL1%HEHQURWK5:LOOLDPVRQ1&DQG6KDUPD56  &URVVQDWLRQDOKHWHURJHQHLW\LQHUHWDLOVSHQG- LQJ$ORQJLWXGLQDODQDO\VLVRIHFRQRPLFWHFKQRORJLFDODQGSROLWLFDOIRUFHVElectronic Commerce Research. 1RYHPEHUt .VKHWUL1DQG'KRODNLD1  'HWHUPLQDQWVRIWKHJOREDOGLIIXVLRQRI%%HFRPPHUFH6651VFKRODUO\SDSHU 1R6RFLDO6FLHQFH5HVHDUFK1HWZRUN5RFKHVWHU1HZ

2(&' E Addressing the Tax Challenges of the Digital Economy2(&'*%DVH(URVLRQDQG3URƄW6KLIW- LQJ 3URMHFW $YDLODEOH DW KWWSZZZRHFGLOLEUDU\RUJWD[DWLRQDGGUHVVLQJWKHWD[FKDOOHQJHVRIWKHGLJLWDO HFRQRP\BHQ DFFHVVHG)HEUXDU\  3DUWQHUVKLSRQ0HDVXULQJ,&7IRU'HYHORSPHQW  )LQDO:6,6WDUJHWVUHYLHZ$FKLHYHPHQWVFKDOOHQJHVDQG the way forward. ITU. Geneva. 3D\YLVLRQ  .H\EXVLQHVVGULYHUVDQGRSSRUWXQLWLHVLQFURVVERUGHUHFRPPHUFH,QWHUQDWLRQDOH[SDQVLRQ LQWR HPHUJLQJ PDUNHWV  3D\YLVLRQ $YDLODEOH DW KWWSZZZSD\YLVLRQFRPFURVVERUGHUHFRPPHUFH UHSRUWVXUYH\ 4XLUÐV5RPHUR&DQG5RGUÊJXH]5RGUÊJXH]'  (FRPPHUFHDQGHIƄFLHQF\DWWKHƄUPOHYHOInternational Journal of Production Economics  t 5DPVH\(,EERWVRQ3%HOO-DQG*UD\%  (RSSRUWXQLWLHVRIVHUYLFHVHFWRU60(V$Q,ULVKFURVVERUGHU study. Journal of Small Business and Enterprise Development.  t 5HKEHLQ%  5XUDOOLYHOLKRRGVDQGHFRPPHUFH$FDVHVWXG\RIDUWLVDQVLQ*XHUUHUR0H[LFR0DVWHUpV WKHVLV6DLQW0DU\pV8QLYHUVLW\+DOLID[1RYD6FRWLD 5HSXEOLFRI.RUHD0LQLVWU\RI6HFXULW\DQG3XEOLF$GPLQLVWUDWLRQ  Yearbook of Information Society Statis- tics 2012. Seoul. 5LVN%DVHG6HFXULW\  'DWDEUHDFKTXLFNYLHZ$QH[HFXWLYHpVJXLGHWRGDWDEUHDFKWUHQGV$YDLODEOH DWKWWSVZZZULVNEDVHGVHFXULW\FRPUHSRUWV'DWD%UHDFK4XLFN9LHZSGI DFFHVVHG)HEUXDU\  6DQGEHUJ.:DQG+ÂNDQVVRQ)  %DUULHUVWRDGDSWHFRPPHUFHE\UXUDOPLFURHQWHUSULVHVLQ6ZHGHQ A case study. International Journal of Knowledge and Research in Management and E-commerce  t 6WDWLVWLFV.RUHD  (FRPPHUFHDQGF\EHUVKRSSLQJVXUYH\LQDQGLQWKHIRXUWKTXDUWHU$YDLO- DEOHDWKWWSNRVWDWJRNUSRUWDOHQJOLVKQHZVLQGH[ERDUG DFFHVVHG)HEUXDU\  6WLURK.-DQG-RUJHQVRQ':  ,QIRUPDWLRQWHFKQRORJ\DQGJURZWKAmerican Economic Review.  t 6WRFNGDOH5DQG6WDQGLQJ&  $FODVVLƄFDWLRQPRGHOWRVXSSRUW60(HFRPPHUFHDGRSWLRQLQLWLDWLYHV Journal of Small Business and Enterprise Development  t 6ZHGHQ1DWLRQDO%RDUGRI7UDGH  (FRPPHUFHtQHZRSSRUWXQLWLHVQHZEDUULHUV$VXUYH\RIHFRP- PHUFHEDUULHUVLQFRXQWULHVRXWVLGHWKH(81DWLRQDO%RDUGRI7UDGH6WRFNKROP 7HU]L1  7KHLPSDFWRIHFRPPHUFHRQLQWHUQDWLRQDOWUDGHDQGHPSOR\PHQWProcedia – Social and Behav- ioral Sciences. Proceedings of the 7th International Strategic Management Conference.t 7KDLODQG1DWLRQDO6WDWLVWLFDO2IƄFH D The Survey of e-Commerce Status in Thailand.([HFXWLYHVXPPDU\ $YDLODEOHDWKWWSZHEQVRJRWKHQVXUYH\LFWGDWDBLFWB(OHFWULFBSGI DFFHVVHG})HEUXDU\  7KDLODQG 1DWLRQDO 6WDWLVWLFDO 2IƄFH E  7KH  LQIRUPDWLRQ DQG FRPPXQLFDWLRQ WHFKQRORJ\ VXUYH\ LQ KRXVHKROG $YDLODEOH DW KWWSVHUYLFHQVRJRWKQVRQVRBFHQWHUSURMHFWVHDUFKBFHQWHUSURMHFWHQKWP DFFHVVHG)HEUXDU\  7KXODQL'7RIDUD&DQG/DQJWRQ5  (OHFWURQLFFRPPHUFHEHQHƄWVDQGDGRSWLRQEDUULHUVLQVPDOODQG PHGLXPHQWHUSULVHVLQ*ZHUX=LPEDEZHJournal of International Banking and Commerce  t 81&,75$/   UNCITRAL Model Law on Electronic Commerce with Guide to Enactment 1996: With Additional Article 5 bis as Adopted in 19988QLWHG1DWLRQVSXEOLFDWLRQ6DOHV1R(91HZ

81&7$'  Manual for the Production of Statistics on the Information Economy. United Nations publication. 81&7$'6'7((&%5(91HZ

STATISTICAL ANNEX 100 INFORMATION ECONOMY REPORT 2015

$QQH[ 81&7$'%&(FRPPHUFH,QGH[

Share of Share of Share of Secure population having individuals with individuals servers per UNCTAD mail delivered Economy credit card using Internet 1 million people E-commerce at home 5DQN  RUODWHVW QRUPDOL]HG Index value RUODWHVW SHUFHQW SHUFHQW  SHUFHQW /X[HPERXUJ 100 72.4 95.0 99.3 91.7 1 Norway 100 60.0 96.0 97.4 88.3 2 Finland 100 63.9 92.0 96.5 88.1 3 Canada 100 72.3 83.0 93.3 87.1 4 Sweden 100 53.5 95.0 95.9 86.0 5 Australia 100 64.2 83.0 94.8 85.5 6 Denmark 100 44.9 95.0 99.0 84.7 7 Republic of Korea 100 56.4 82.1 98.6 84.3 8 United Kingdom 100 51.6 91.0 94.4 84.2 9 Israel 100 79.7 73.4 82.4 83.9 10 Netherlands 100 41.4 94.0 100.0 83.8 11 Japan 100 64.4 79.5 90.5 83.6 12 New Zealand 97 59.2 83.0 93.8 83.3 13 Switzerland 99 56.0 78.0 99.4 83.1 14 United States 93 61.9 78.0 95.1 82.0 15 Belgium 100 54.3 83.0 90.5 82.0 16 Ireland 100 55.6 80.0 90.3 81.5 17 Hong Kong (China) 100 58.1 74.2 89.2 80.4 18 Malta 100 52.9 70.0 96.1 79.8 19 Germany 100 35.7 86.0 93.5 78.8 20 Austria 99 38.9 82.0 93.6 78.4 21 France 100 37.5 84.0 87.2 77.2 22 Slovenia 100 38.6 74.0 88.1 75.2 23 Estonia 97 30.2 82.0 90.7 75.0 24 Cyprus 98 45.9 66.0 89.1 74.8 25 Singapore 100 37.3 72.0 89.0 74.6 26 Spain 99 41.9 74.0 82.4 74.3 27 Czech Republic 100 26.5 76.0 88.4 72.7 28 Slovakia 99 20.3 81.0 82.2 70.6 29 Latvia 100 19.9 76.0 82.5 69.6 30 Portugal 100 29.6 65.0 80.7 68.8 31 Italy 100 30.5 61.0 80.1 67.9 32 Hungary 100 15.0 74.0 81.8 67.7 33 Bahrain 100 19.3 73.0 77.2 67.4 34 Poland 100 17.7 65.0 83.5 66.5 35 Lithuania 100 13.4 69.0 82.0 66.1 36 STATISTICAL ANNEX 101

$QQH[ 81&7$'%&(FRPPHUFH,QGH[(continued)

Share of Share of Share of Secure population having individuals with individuals servers per UNCTAD mail delivered Economy credit card using Internet 1 million people E-commerce at home 5DQN  RUODWHVW QRUPDOL]HG Index value RUODWHVW SHUFHQW SHUFHQW  SHUFHQW Croatia 79 34.8 68.0 79.7 65.4 37 Turkey 97 45.1 46.0 68.9 64.2 38 Chile 94 22.8 61.4 73.9 63.0 39 Uruguay 93 27.1 58.0 72.1 62.5 40 The former Yugoslav 100 16.5 63.2 69.1 62.2 41 Republic of Macedonia Greece 93 17.5 61.0 76.9 62.1 42 Trinidad and Tobago 93 15.3 59.5 73.8 60.4 43 Serbia 99 22.6 53.5 65.9 60.1 44 Malaysia 93 11.9 63.6 71.1 59.9 45 Romania 100 11.7 55.0 71.4 59.5 46 Brazil 81 29.2 58.0 69.9 59.5 47 Argentina 93 21.9 54.1 67.6 59.1 48 Bulgaria 90 10.4 56.0 77.4 58.5 49 Russian Federation 100 9.7 53.3 69.0 58.0 50 Lebanon 100 11.4 52.0 67.6 57.7 51 Costa Rica 98 12.2 47.5 72.5 57.6 52 Bosnia and Herze- 90 11.7 65.4 62.9 57.5 53 govina Mauritius 100 14.1 37.6 76.3 57.0 54 Albania 100 10.6 54.7 60.7 56.4 55 Georgia 98 8.8 49.0 64.3 55.0 56 Dominican Republic 99 12.2 45.0 61.5 54.5 57 Ukraine 98 19.3 33.7 63.7 53.7 58 Armenia 90 2.3 53.0 67.1 53.1 59 0H[LFR 91 13.0 43.5 63.7 52.8 60 Belarus 100 7.8 39.6 63.5 52.7 61 Moldova 98 2.4 43.4 63.1 51.7 62 Bolivarian Republic of 93 10.4 44.1 56.6 51.0 63 Venezuela Kazakhstan 86 8.6 53.3 55.3 50.8 64 China 100 8.2 44.1 48.1 50.1 65 United Arab Emirates 0 30.0 85.0 79.8 48.7 66 South Africa 81 7.8 32.0 73.2 48.5 67 Egypt 99 1.4 44.1 47.2 47.9 68 Islamic Republic of 100 23.9 26.0 39.1 47.3 69 Iran Thailand 95 4.5 28.9 60.6 47.2 70 102 INFORMATION ECONOMY REPORT 2015

$QQH[ 81&7$'%&(FRPPHUFH,QGH[(continued)

Share of Share of Share of Secure population having individuals with individuals servers per UNCTAD mail delivered Economy credit card using Internet 1 million people E-commerce at home 5DQN  RUODWHVW QRUPDOL]HG Index value RUODWHVW SHUFHQW SHUFHQW  SHUFHQW Colombia 60 10.2 51.7 65.6 46.9 71 El Salvador 95 5.3 25.5 60.9 46.7 72 Qatar 0 32.3 69.3 78.3 45.0 73 Tunisia 93 4.3 21.0 60.1 44.6 74 Morocco 72 4.5 53.0 47.6 44.3 75 Ecuador 68 10.2 35.1 63.0 44.1 76 Guatemala 95 6.9 16.0 58.1 44.0 77 Uzbekistan 100 3.4 36.5 35.3 43.8 78 Sri Lanka 98 3.5 18.3 54.9 43.7 79 Jamaica 50 6.9 46.5 67.9 42.8 80 Oman 5 26.6 67.0 70.6 42.3 81 Peru 56 10.0 38.2 61.9 41.5 82 India 100 1.8 12.6 48.2 40.6 83 Panama 25 10.7 45.2 73.5 38.6 84 Honduras 75 5.3 18.1 55.1 38.4 85 Pakistan 95 0.7 10.0 39.2 36.2 86 Syrian Arab Republic 85 2.8 24.3 30.6 35.7 87 Indonesia 75 0.5 15.4 48.6 34.9 88 Sierra Leone 95 2.2 1.3 35.6 33.5 89 Viet Nam 30 1.2 39.5 54.2 31.2 90 Tajikistan 70 1.2 14.5 38.8 31.1 91 Cambodia 75 0.1 4.9 43.0 30.8 92 Zambia 60 3.7 13.5 45.4 30.6 93 Nepal 65 0.6 11.2 44.2 30.2 94 Jordan 10 3.5 41.0 63.8 29.6 95 Madagascar 80 0.0 2.1 33.7 28.9 96 Zimbabwe 45 6.5 17.1 46.5 28.8 97 Nicaragua 44 2.5 13.5 54.4 28.6 98 Plurinational State of 19 4.1 34.2 54.9 28.1 99 Bolivia Mali 70 0.6 2.2 37.6 27.6 100 Nigeria 35 0.8 32.9 41.4 27.5 101 Afghanistan 65 0.8 5.5 37.0 27.1 102 Mongolia 20 1.9 16.4 62.2 25.1 103 Iraq 65 1.7 7.1 26.6 25.1 104 Angola 15 15.5 16.9 48.1 23.9 105 STATISTICAL ANNEX 103

$QQH[ 81&7$'%&(FRPPHUFH,QGH[(continued)

Share of Share of Share of Secure population having individuals with individuals servers per UNCTAD mail delivered Economy credit card using Internet 1 million people E-commerce at home 5DQN  RUODWHVW QRUPDOL]HG Index value RUODWHVW SHUFHQW SHUFHQW  SHUFHQW Lao People’s 39 3.1 10.8 37.4 22.6 106 Democratic Republic Haiti 40 1.8 9.8 37.7 22.3 107 Swaziland 0 13.3 20.8 54.8 22.2 108 Ghana 20 2.2 17.1 45.0 21.1 109 Mozambique 35 3.5 4.9 40.9 21.1 110 Botswana 0 10.7 11.5 56.1 19.6 111 Senegal 5 0.8 19.2 43.5 17.1 112 Gabon 0 2.7 8.6 55.4 16.7 113 Kenya 0 6.1 6.3 49.8 15.6 114 Rwanda 0 2.8 8.0 44.8 13.9 115 Uganda 0 1.6 14.7 38.5 13.7 116 Comoros 5 1.5 6.0 39.7 13.0 117 Togo 0 1.0 4.0 46.3 12.9 118 Benin 8 0.5 3.8 37.7 12.5 119 Liberia 5 2.7 3.8 36.6 12.0 120 Sudan 15 0.6 21.0 11.2 11.9 121 United Republic of 0 3.7 4.0 37.8 11.4 122 Tanzania Malawi 1 1.4 4.4 36.5 10.8 123 Lesotho 2 2.5 4.6 31.3 10.1 124 Burkina Faso 0 0.8 3.7 35.7 10.1 125 Democratic Republic 0 1.6 1.7 28.5 8.0 126 of the Congo Burundi 2 0.6 1.2 27.5 7.7 127 Niger 5 0.4 1.4 22.9 7.4 128 Central African 0 0.6 3.0 25.0 7.1 129 Republic Guinea 5 1.3 1.5 17.7 6.4 130

Source: 81&7$'EDVHGRQGDWDIURP,78838DQGWKH:RUOG%DQN 104 INFORMATION ECONOMY REPORT 2015

$QQH[ $PD]RQH%D\DQG3D\3DOVHUYLFHVDYDLODELOLW\LQ8QLWHG1DWLRQV0HPEHU6WDWHV

Amazon services eBay services 3D\3DOVHUYLFHV site eBay local by Amazon Countries and Member State EX\RQO\ VLWH United Nations Bank accounts ship by Amazon 3UHPLHUDFFRXQW 3HUVRQDODFFRXQW United States site Business account eBay international Sellers supported to currencies supported supported by Amazon Afghanistan X Albania XXXX Algeria XXXX Andorra XXXX Angola XX Antigua and Barbuda X X X Argentina X X X X Armenia XX Australia X X X X X X Austria X X X X X X X Azerbaijan XX Bahamas XXX Bahrain XXXX Bangladesh X Barbados XXX Belarus XX Belgium X X X X X X X Belize XXX Benin XX Bhutan XX Bolivia (Plurinational State of) X X* Bosnia and Herzegovina X X X X Botswana XXXX Brazil X X X X Brunei Darussalam X X Bulgaria X X X X X Burkina Faso XX Burundi XX Cambodia XX Cameroon XX Canada X X X X X X Cape Verde XX Central African Republic X Chad XX Chile XXX China X X X X X X Colombia XXX Comoros XX Congo XX Costa Rica X X X* Côte d'Ivoire XX STATISTICAL ANNEX 105

$QQH[ $PD]RQH%D\DQG3D\3DOVHUYLFHVDYDLODELOLW\LQ8QLWHG1DWLRQV0HPEHU6WDWHV(continued)

Amazon services eBay services 3D\3DOVHUYLFHV site eBay local by Amazon Countries and Member State EX\RQO\ VLWH United Nations Bank accounts ship by Amazon 3UHPLHUDFFRXQW 3HUVRQDODFFRXQW United States site Business account eBay international Sellers supported to currencies supported supported by Amazon Croatia X X X X X Cuba X Cyprus X X X X X X X Czech Republic X X X X X Democratic Peoples Republic X of Korea Democratic Republic of the XX Congo Denmark X X X X X Djibouti XX Dominica XX Dominican Republic X X X Ecuador XX Egypt XX El Salvador XX Equatorial Guinea X Eritrea XX Estonia X X X X X X X Ethiopia XX Fiji XXXX Finland X X X X X X X France X X X X X X X Gabon XX Gambia XX Georgia XX Germany X X X X X X X Ghana X Greece X X X X X X X Grenada XXX Guatemala XX* Guinea XX Guinea-Bissau XX Guyana XX* Haiti X Honduras XX Hungary X X X X X Iceland X X X X X India X X X X X X X Indonesia XXXX Iran (Islamic Republic of) X Iraq X 106 INFORMATION ECONOMY REPORT 2015

$QQH[ $PD]RQH%D\DQG3D\3DOVHUYLFHVDYDLODELOLW\LQ8QLWHG1DWLRQV0HPEHU6WDWHV(continued)

Amazon services eBay services 3D\3DOVHUYLFHV site eBay local by Amazon Countries and Member State EX\RQO\ VLWH United Nations Bank accounts ship by Amazon 3UHPLHUDFFRXQW 3HUVRQDODFFRXQW United States site Business account eBay international Sellers supported to currencies supported supported by Amazon Ireland X X X X X X X Israel X X X X X Italy X X X X X X X Jamaica XXX Japan X X X X X Jordan XXXX Kazakhstan XX Kenya XXXX Kiribati XX Kuwait XXXX Kyrgyzstan XX Lao People's Democratic XX Republic Latvia X X X X X Lebanon X Lesotho XXXX Liberia X Libya X Liechtenstein X X X X X Lithuania X X X X X /X[HPERXUJ XX X X XXX Madagascar XX Malawi XXXX Malaysia X X X X Maldives XX Mali XX Malta X X X X X X Marshall Islands X X X Mauritania XX Mauritius XX 0H[LFR XXXXX Micronesia (Federated States XXX of) Monaco XX Mongolia XX Montenegro XX Morocco XXXX Mozambique XXXX Myanmar X Namibia XX Nauru XX STATISTICAL ANNEX 107

$QQH[ $PD]RQH%D\DQG3D\3DOVHUYLFHVDYDLODELOLW\LQ8QLWHG1DWLRQV0HPEHU6WDWHV(continued)

Amazon services eBay services 3D\3DOVHUYLFHV site eBay local by Amazon Countries and Member State EX\RQO\ VLWH United Nations Bank accounts ship by Amazon 3UHPLHUDFFRXQW 3HUVRQDODFFRXQW United States site Business account eBay international Sellers supported to currencies supported supported by Amazon Nepal XX Netherlands X X X X X X X New Zealand X X X X X X X Nicaragua XX* Niger XX Nigeria X X X Norway X X X X X Oman XXXX Pakistan X Palau X X X X X Panama XX Papua New Guinea X X Paraguay XX* Peru XXX Philippines X X X X Poland X X X X X Portugal X X X X X X X Qatar XXXX Republic of Korea X X X X X X Republic of Moldova X X Romania XXXX Russian Federation X X X X X Rwanda XX Saint Kitts and Nevis X X X Saint Lucia XXX Saint Vincent and the XX* Grenadines Samoa XX San Marino X X X X X Sao Tome and Principe X Saudi Arabia XXXX Senegal XX Serbia XX Seychelles XXXX Sierra Leone XX Singapore X X X X X Slovakia X X X X X X X Slovenia X X X X X X X Solomon Islands XX Somalia XX South Africa X X X X X 108 INFORMATION ECONOMY REPORT 2015

$QQH[ $PD]RQH%D\DQG3D\3DOVHUYLFHVDYDLODELOLW\LQ8QLWHG1DWLRQV0HPEHU6WDWHV(continued)

Amazon services eBay services 3D\3DOVHUYLFHV site eBay local by Amazon Countries and Member State EX\RQO\ VLWH United Nations Bank accounts ship by Amazon 3UHPLHUDFFRXQW 3HUVRQDODFFRXQW United States site Business account eBay international Sellers supported to currencies supported supported by Amazon South Sudan Spain X X X X X X X Sri Lanka XX Sudan X Suriname XX* Swaziland XX Sweden X X X X X X Switzerland X X X X X Syrian Arab Republic X Tajikistan XX Thailand X X X X X The former Yugoslav Republic XX of Macedonia Timor-Leste Togo XX Tonga XX Trinidad and Tobago X X X Tunisia XX Turkey X X X X X X Turkmenistan XX Tuvalu XX Uganda XX Ukraine XX United Arab Emirates X X X X United Kingdom X X X X X X X United Republic of Tanzania X X United States X X X X X X X Uruguay XXX Uzbekistan X Vanuatu XXXX Venezuela (Bolivarian XXX Republic of) Viet Nam X X X X X Yemen XX Zambia XX Zimbabwe XX Source: 81&7$'DQDO\VLVRILQIRUPDWLRQIURP$PD]RQFRP$XJXVWVHHKWWSZZZDPD]RQFRPJSKHOSFXVWRPHU GLVSOD\KWPO"QRGH,G KWWSZZZDPD]RQFRPJSKHOSFXVWRPHUGLVSOD\KWPO"QRGH,G  KWWSZZZDPD]RQFRPJSKHOSFXVWRPHUGLVSOD\KWPO"QRGH,G IURPHED\FRPDQGHED\FRXN $XJXVWVHHKWWSVHOOHUFHQWUHHED\FRXNZKHUHWRVHOOLQWHUQDWLRQDOO\"FDW DQGIURP3D\3DO VHHKWWSVZZZSD\SDOFRPZHEDSSVPSSFRXQWU\ZRUOGZLGH * 3HUVRQDODFFRXQWVDOORZRQO\VHQGLQJPRQH\DQGEX\LQJRQOLQHEXWQRWUHFHLYLQJPRQH\DQGVHOOLQJRQOLQH STATISTICAL ANNEX 109

$QQH[ $YDLODELOLW\RIOHJLVODWLRQRUGUDIWOHJLVODWLRQLQNH\DUHDVRIF\EHUODZV

Electronic Consumer protection 3ULYDF\DQGGDWD Cybercrime transactions protection

UNCTAD member States Legislation Draft Legislation Draft Legislation Draft Legislation Draft

Developed economies Andorra Yes no data no data Yes no data no data Australia Yes* Yes Yes Yes Austria Yes Yes Yes Yes Belgium Yes Yes Yes Yes Bulgaria Yes Yes Yes Yes Canada Yes* Yes Yes Yes Croatia Yes Yes Yes Yes Cyprus Yes Yes Yes Yes Czech Republic Yes Yes Yes No Yes Denmark Yes Yes Yes Yes Estonia Yes Yes Yes Yes Finland Yes Yes Yes Yes France Yes* Yes Yes Yes Germany Yes Yes Yes Yes Greece Yes Yes Yes Yes Hungary Yes Yes Yes Yes Iceland Yes no data no data Yes no data no data Ireland Yes* Yes Yes Yes Israel Yes Yes Yes Yes Italy Yes Yes Yes Yes Japan Yes no data no data Yes Yes Latvia Yes Yes Yes Yes Liechtenstein Yes no data no data Yes Yes Lithuania Yes Yes Yes Yes /X[HPERXUJ Yes Yes Yes Yes Malta Yes Yes Yes Yes Monaco Yes no data no data Yes no data no data Netherlands Yes Yes Yes Yes New Zealand Yes* Yes Yes Yes Norway Yes Yes Yes Yes Poland Yes Yes Yes Yes Portugal Yes Yes Yes Yes Romania Yes Yes Yes Yes San Marino Yes* Yes Yes no data no data Slovakia Yes Yes Yes Yes Slovenia Yes* Yes Yes No No Spain Yes Yes Yes Yes Sweden Yes Yes Yes Yes Switzerland Yes Yes Yes Yes United Kingdom Yes* Yes Yes Yes United States Yes* Yes Yes Yes Holy See no data no data no data no data no data no data no data no data 110 INFORMATION ECONOMY REPORT 2015

$QQH[ $YDLODELOLW\RIOHJLVODWLRQRUGUDIWOHJLVODWLRQLQNH\DUHDVRIF\EHUODZV(continued)

Electronic Consumer protection 3ULYDF\DQGGDWD Cybercrime transactions protection

UNCTAD member States Legislation Draft Legislation Draft Legislation Draft Legislation Draft

Developing economies Africa Eastern Africa Burundi No Yes No Yes No Yes No Yes Comoros No No no data no data no data no data No No Djibouti no data no data no data no data no data no data Yes Eritrea No No No No no data no data no data no data Ethiopia No Yes No No No Yes No Yes Kenya Yes Yes No Yes Yes Madagascar No Yes no data no data Yes Yes Malawi No Yes no data no data No Yes No No Mauritius Yes* no data no data Yes No Yes Mozambique No Yes no data no data no data no data No Yes Rwanda Yes* Yes No Yes Yes Seychelles Yes* no data no data Yes Yes Somalia no data no data no data no data no data no data No No South Sudan no data no data no data no data no data no data no data no data Uganda Yes Yes No Yes Yes United Republic of Tanzania No Yes No Yes No Yes No Yes Zambia Yes* Yes Yes Yes Zimbabwe No Yes no data no data Yes Yes no data Middle Africa Angola no data no data No No Yes No Yes Cameroon Yes Yes no data no data Yes Central African Republic no data no data no data no data no data no data no data no data Chad no data no data no data no data no data no data no data no data Congo Yes* no data no data no data no data No Yes Democratic Republic of the No No no data no data no data no data No No Congo Equatorial Guinea no data no data No No no data no data no data no data Gabon no data no data Yes Yes No Yes Sao Tome and Principe no data no data no data no data no data no data No No Northern Africa Algeria Yes no data No Yes No No Yes Egypt Yes no data No Yes No Yes Yes Libya No No No No No No No No Morocco Yes Yes Yes Yes Sudan Yes no data no data Yes Yes Tunisia Yes Yes Yes No Yes STATISTICAL ANNEX 111

$QQH[ $YDLODELOLW\RIOHJLVODWLRQRUGUDIWOHJLVODWLRQLQNH\DUHDVRIF\EHUODZV(continued)

Electronic Consumer protection 3ULYDF\DQGGDWD Cybercrime transactions protection

UNCTAD member States Legislation Draft Legislation Draft Legislation Draft Legislation Draft

Southern Africa Botswana Yes Yes No No Yes Lesotho No Yes no data no data Yes No No Namibia No Yes no data no data No Yes No Yes South Africa Yes* Yes No Yes Yes Swaziland Yes no data no data No Yes No No Western Africa Benin Yes No No Yes No Yes Burkina Faso Yes Yes Yes No Yes Cape Verde Yes* Yes Yes Yes Côte d'Ivoire Yes Yes Yes Yes Gambia Yes* Yes Yes Yes Ghana Yes* Yes Yes Yes Guinea No No No No No No No No Guinea-Bissau No No Yes no data no data No No Liberia Yes* Yes Yes No No Mali No Yes No No Yes Yes Mauritania no data no data no data no data no data no data No No Niger No Yes No Yes No Yes No Yes Nigeria No Yes No Yes No Yes No Yes Senegal Yes* Yes Yes Yes Sierra Leone No No Yes Yes No No Togo No Yes No Yes No Yes No Yes Asia and Oceania Eastern Asia China Yes* Yes No No Yes Democratic People's Republic no data no data no data no data no data no data no data no data of Korea Mongolia Yes no data no data no data no data no data no data Republic of Korea Yes* Yes Yes Yes Southern Asia Afghanistan No Yes No No No No No No Bangladesh Yes* Yes no data no data Yes Bhutan Yes Yes Yes Yes India Yes* No No Yes Yes Iran (Islamic Republic of) Yes* No No Yes Yes Maldives No No no data no data No No No No Nepal Yes no data no data Yes Yes Pakistan Yes* no data no data No Yes No Yes Sri Lanka Yes* no data no data no data no data Yes 112 INFORMATION ECONOMY REPORT 2015

$QQH[ $YDLODELOLW\RIOHJLVODWLRQRUGUDIWOHJLVODWLRQLQNH\DUHDVRIF\EHUODZV(continued)

Electronic Consumer protection 3ULYDF\DQGGDWD Cybercrime transactions protection

UNCTAD member States Legislation Draft Legislation Draft Legislation Draft Legislation Draft

South-Eastern Asia Brunei Darussalam Yes* Yes No No Yes Cambodia No Yes No Yes No No No Yes Indonesia Yes Yes Yes Yes Lao People's Democratic Yes Yes No No No No Republic Malaysia Yes* Yes Yes Yes Myanmar Yes Yes No No Yes Philippines Yes* Yes Yes Yes Singapore Yes* Yes Yes Yes Thailand Yes Yes Yes Yes Timor-Leste no data no data no data no data no data no data no data no data Viet Nam Yes* Yes Yes Yes Western Asia Bahrain Yes* Yes No Yes Yes Iraq Yes no data no data No Yes No Yes Jordan Yes* no data no data No Yes Yes Kuwait Yes* Yes Yes No Yes Lebanon No Yes No Yes No Yes No No Oman Yes* no data no data Yes Yes Qatar Yes* Yes No Yes No Yes Saudi Arabia Yes* No No Yes Syrian Arab Republic Yes* No Yes No Yes Yes Turkey Yes Yes No Yes Yes United Arab Emirates Yes* no data no data No No Yes Yemen Yes no data no data Yes No Yes Oceania Fiji Yes* Yes no data no data Yes Kiribati No No no data no data No No Yes Marshall Islands no data no data no data no data no data no data No No Micronesia (Federated States no data no data no data no data no data no data No No of) Nauru No No no data no data No No No No Palau no data no data no data no data no data no data no data no data Papua New Guinea No Yes no data no data No No No No Samoa Yes* no data no data No No Yes Solomon Islands Yes no data no data No No No No Tonga Yes no data no data No No Yes Tuvalu No No no data no data No No No No Vanuatu Yes* no data no data No No No No STATISTICAL ANNEX 113

$QQH[ $YDLODELOLW\RIOHJLVODWLRQRUGUDIWOHJLVODWLRQLQNH\DUHDVRIF\EHUODZV(continued)

Electronic Consumer protection 3ULYDF\DQGGDWD Cybercrime transactions protection

UNCTAD member States Legislation Draft Legislation Draft Legislation Draft Legislation Draft

Latin America and the Caribbean Central America Belize Yes* Yes No Yes No No Costa Rica Yes* Yes Yes Yes El Salvador No Yes Yes No No No Yes Guatemala Yes* No No No No No Yes Honduras Yes* Yes No Yes No No 0H[LFR Yes* Yes Yes Yes Nicaragua Yes* Yes Yes No No Panama Yes* Yes No Yes Yes South America Argentina Yes Yes Yes Yes Bolivia (Plurinational State of) Yes No No Yes Yes Brazil Yes Yes No Yes Yes Chile Yes Yes Yes Yes Colombia Yes* Yes Yes Yes Ecuador Yes* Yes Yes No No Guyana No Yes no data no data No No No No Paraguay Yes* Yes Yes Yes Peru Yes Yes Yes Yes Suriname no data no data no data no data no data no data no data no data Uruguay Yes Yes Yes Yes Venezuela Yes* Yes No No Yes (Bolivarian Republic of) Caribbean Antigua and Barbuda Yes* no data no data No Yes Yes Bahamas Yes no data no data Yes Yes Barbados Yes* No No No Yes Yes Cuba No No No No No Yes No Yes Dominica Yes* Yes No Yes No No Dominican Republic Yes* No No Yes Yes Grenada Yes* no data no data No Yes Yes Haiti No Yes No Yes No No No No Jamaica Yes* Yes No Yes Yes Saint Kitts and Nevis Yes* no data no data No Yes Yes Saint Lucia Yes* no data no data Yes No Yes Saint Vincent and the Yes* no data no data Yes Yes Grenadines Trinidad and Tobago Yes no data no data Yes Yes 114 INFORMATION ECONOMY REPORT 2015

$QQH[ $YDLODELOLW\RIOHJLVODWLRQRUGUDIWOHJLVODWLRQLQNH\DUHDVRIF\EHUODZV(continued)

Electronic Consumer protection 3ULYDF\DQGGDWD Cybercrime transactions protection

UNCTAD member States Legislation Draft Legislation Draft Legislation Draft Legislation Draft

Transition economies Albania Yes Yes Yes Yes No Armenia Yes no data no data Yes Yes Azerbaijan Yes no data no data Yes Yes Belarus Yes No No Yes Yes Bosnia and Herzegovina Yes Yes Yes Yes Georgia Yes no data no data Yes Yes Kazakhstan Yes no data no data Yes Yes Kyrgyzstan Yes no data no data Yes no data no data Montenegro Yes* no data no data Yes Yes Republic of Moldova Yes no data no data Yes No Yes Russian Federation Yes* no data no data Yes Yes Serbia Yes no data no data Yes Yes Tajikistan Yes no data no data Yes no data no data The former Yugoslav Republic Yes no data no data Yes Yes of Macedonia Turkmenistan Yes no data no data no data no data no data no data Ukraine Yes no data no data Yes No Yes Uzbekistan Yes no data no data No No Yes

Source: 81&7$'EDVHGRQGDWDIURP*UDKDP*UHHQOHDI6WHSKHQ0DVRQWKH&RPPRQZHDOWKVHFUHWDULDWWKH&RXQFLORI(XURSH '/$3LSHU*RRJOH1RUWRQ5RVH)XOEULJKWWKH2(&'7KH3D\SHUV81&,75$/812'&DQG(6&:$ * &RXQWULHVZLWKHWUDQVDFWLRQVOHJLVODWLRQEDVHGRQ81&,75$/WH[WV SELECTED UNCTAD PUBLICATIONS 115

SELECTED UNCTAD PUBLICATIONS IN THE AREA OF SCIENCE, TECHNOLOGY AND ICT FOR DEVELOPMENT

A. Flagship reports

Information Economy Report 2015: Unlocking the Potential of E-commerce for Developing Countries. United 1DWLRQVSXEOLFDWLRQ6DOHV1R(,,'1HZ

B. ICT Policy Reviews

ICT Policy Review of Egypt 8QLWHG 1DWLRQV SXEOLFDWLRQ   81&7$''7/67,&7 1HZ

C. Science, Technology and Innovation Policy Reviews

Science, Technology and Innovation Policy Review: Oman. 8QLWHG1DWLRQVSXEOLFDWLRQ   UNCTAD/DTL/ 67,&71HZ

D. Other publications on ICT for development

A Framework for Information and Communications Technology Policy Reviews – Helping Countries Leverage ICT for Development. 8QLWHG1DWLRQVSXEOLFDWLRQ  81&7$''7/67,&71HZ

Implementing WSIS Outcomes: Experience to Date and Prospects for the Future. United Nations Commission on 6FLHQFHDQG7HFKQRORJ\IRU'HYHORSPHQW8QLWHG1DWLRQVSXEOLFDWLRQ  81&7$''7/67,&7 New York and Geneva. Measuring the Impacts of Information and Communication Technology for Development. UNCTAD Current 6WXGLHVRQ6FLHQFH7HFKQRORJ\DQG,QQRYDWLRQ1R. 8QLWHG1DWLRQVSXEOLFDWLRQ  81&7$''7/ 67,&71HZ

E. Publications by the Partnership on Measuring ICT for Development

Measuring ICT and Gender: An Assessment. 8QLWHG 1DWLRQV SXEOLFDWLRQ   81&7$':(%'7/ 67,&71HZ

READERSHIP SURVEY 119

READERSHIP SURVEY

Information Economy Report 2015: Unlocking the Potential of E-commerce for Developing Countries

,QRUGHUWRLPSURYHWKHTXDOLW\RIWKLVUHSRUWDQGRWKHUSXEOLFDWLRQVRIWKH6FLHQFH7HFKQRORJ\DQG,&7%UDQFKRI UNCTAD, we welcome the views of our readers on this publication. It would be greatly appreciated if you would FRPSOHWHWKHIROORZLQJTXHVWLRQQDLUHDQGUHWXUQLWWR

,&7$QDO\VLV6HFWLRQ2IƄFH( 6FLHQFH7HFKQRORJ\DQG,&7%UDQFK Division on Technology and Logistics United Nations 3DODLVGHV1DWLRQV &+*HQHYD6ZLW]HUODQG )D[ [email protected]

1. Name and address of respondent (optional) ......

:KLFKRIWKHIROORZLQJEHVWGHVFULEHV\RXUDUHDRIZRUN" Government ministry ❏ 1RWIRUSURƄWRUJDQL]DWLRQ ❏ (please specify) ...... 1DWLRQDOVWDWLVWLFVRIƄFH ❏ 3XEOLFHQWHUSULVH ❏

Telecommunication regulatory authority ❏ Academic or research institution ❏

3ULYDWHHQWHUSULVH ❏ 0HGLD ❏

,QWHUQDWLRQDORUJDQL]DWLRQ ❏ 2WKHU SOHDVHVSHFLI\  ❏

,QZKLFKFRXQWU\GR\RXZRUN" ......

4. What is your assessment of the contents of this publication? ([FHOOHQW ❏ Good ❏ Adequate ❏ 3RRU ❏ ✂ 120 INFORMATION ECONOMY REPORT 2015

5. How useful is this publication to your work? 9HU\XVHIXO ❏ Somewhat useful ❏ Irrelevant ❏

3OHDVHLQGLFDWHWKHWKUHHWKLQJV\RXOLNHGEHVWDERXWWKLVSXEOLFDWLRQ a) ...... b) ...... c) ......

3OHDVHLQGLFDWHWKHWKUHHWKLQJV\RXOLNHGOHDVWDERXWWKLVSXEOLFDWLRQ a) ...... b) ...... c) ......

:KDWDGGLWLRQDODVSHFWVZRXOG\RXOLNHIXWXUHHGLWLRQVRIWKLVUHSRUWWRFRYHU ......

2WKHUFRPPHQWV ...... ISBN 978-92-1-112887-1

Printed at United Nations, Geneva 1502619 (E)–March 2015–3,564 UNCTAD/IER/2015 United Nations publication Sales No. E.15.II.D.1