29 6(5,( comercio internacional E-commerce Environment and Trade Promotion for Latin America: Policy Implications from East Asian and Advanced Economies’ Experiences Yasushi Ueki International Trade and Integration Division Santiago, Chile, June 2003 This document was prepared by Yasushi Ueki, staff member of the Institute of Developing Economies (IDE/JETRO) of Japan, and Expert on mission to the International Trade and Integration Division of ECLAC, Santiago, Chile. The views expressed herein are those of the author and do not necessarily reflect the views of the Organization. United Nations Publications LC/L.1918-P ISBN: 92-1-121407-6 ISSN printed version: 1680-869x IISSN online version: 1680-872x Copyright © United Nations, June 2003. All rights reserved Sales N° : E.03.II.G.80 Printed in United Nations, Santiago, Chile Applicatons to the right to reproduce this work are welcomed and should be sent to the Secretary of the Publications Board, United Nations Headquarters, New York. N.Y. 10017, U.S.A. Member States and their governmental institutions may reproduce this work without prior authorization, but are requested to mention the source and inform the United Nation of such reproduction. SERIE − Comercio internacional N° 29 Contents Abstract ........................................................................................7 Introduction........................................................................................9 I. E-commerce: A Need for Efficient Management ............11 A. Best Practices.......................................................................12 1. Dell Model: A Best Practice ........................................12 2. Toyota System: The Origin of Supply Chain Management (SCM) and its Evolution.........................12 3. Japanese Automobile Firms: As Service-oriented Manufacturers..............................13 B. The Concept of Supply Chain Management (SCM)............13 C. The Need for Credible Infrastructure and Government Efforts .............................................................15 II. Prerequisites for E-commerce ............................................17 A. Penetration of Information and Communications Technology (ICTs): A Comparison between Asia and Latin America................................................................17 1. Telecommunications Infrastructure..............................17 2. Penetration of ICT........................................................18 3. Broadband ....................................................................20 B. ICT Markets in Major Latin America Countries .................22 1. Argentina......................................................................23 2. Brazil ............................................................................24 3. Chile .............................................................................24 4. Mexico..........................................................................25 C. Informatization of SMEs......................................................26 1. Europe ..........................................................................26 2. Asia-Pacific ..................................................................28 3. Latin America...............................................................31 D. E-readiness...........................................................................35 3 E-commerce Environment and Trade Promotion for Latin America III. B2C E-commerce .............................................................................................. 37 A. Market Conditions..............................................................................................................37 1. World Market Estimates .............................................................................................37 2. B2C in Developed Countries ......................................................................................38 3. B2C in Latin America ..............................................................................................39 B. Cases of Specific Industries ...............................................................................................41 1. Automobile Industry in Brazil ....................................................................................41 2. Tourism.......................................................................................................................42 C. Drivers of B2C ...................................................................................................................43 IV. B2B E-commerce...........................................................................................................45 A. Market Estimates Worldwide.............................................................................................45 B. EDI in Asia and Latin America ..........................................................................................46 C. B2B in Asian Countries......................................................................................................49 D. B2B in Latin America Countries........................................................................................52 1. Market Estimates ........................................................................................................52 2. Attempts in Latin America .........................................................................................54 V. Facilitation of E-commerce and International Trade...................................... 59 A. International E-commerce and Supply Chain Management...............................................60 B. Public Policies for E-commerce Promotion .......................................................................61 C. Online Trade Directory, ASP and E-marketplace: E-commerce Services for SMEs.........63 1. ASP and E-marketplace in Asia..................................................................................63 2. Online Trade Directory, ASP and E-marketplace in Latin America ..........................64 D. Initiatives for Establishment of Transnational E-commerce for Trade Facilitation...........65 1. Interconnection of E-marketplaces: Trials in Japan ...................................................65 2. Establishments of Transnational Vertical E-commerce .............................................66 3. E-finance for Business Facilitation: Cases in Colombia ............................................68 E. Trade EDI for Trade Facilitation........................................................................................68 VI. Concluding Remarks............................................................................................................73 A. Prerequisites for E-commerce Growth ...............................................................................73 B. Policies for E-commerce Development..............................................................................75 C. Strategies for Cultivating Latecomer Advantages..............................................................76 Bibliography ...................................................................................................................................79 Serie Comercio Internacional: Issues published .................................................................83 Index of Tables Table 1 Main Telephone Lines ................................................................................................18 Table 2 Penetration Rates of ICT in Americas........................................................................19 Table 3 Penetration Rates of ICT in East and South East Asia...............................................20 Table 4 Internet Users Worldwide by region...........................................................................20 Table 5 Broadband Households Worldwide by Region ..........................................................21 Table 6 International Broadband Penetration as of December 2001.......................................21 Table 7 Latin America IT Spending by Country .....................................................................22 Table 8 Internet Users in Latin America by Country ..............................................................23 Table 9 IT Market in Argentina ..............................................................................................23 Table 10 IT Market in Brazil .....................................................................................................24 Table 11 IT Market in Chile ......................................................................................................25 Table 12 IT Market in Mexico...................................................................................................25 4 SERIE − Comercio internacional N° 29 Table 13 The Number of Estimated Interest Users in Mexico..................................................26 Table 14 Share of Enterprises Using ICT and E-commerce in Europe.....................................27 Table 15 Single Most Important Reasons For Not Using the Internet by Size by Enterprise...28 Table 16 ICT Usage by Firms in Hong Kong............................................................................29 Table 17 E-business by Firms in Hong Kong............................................................................29 Table 18 Use of the Internet and E-commerce by SMEs by Industrial Sector in Japan............30 Table 19 Internet and E-commerce Penetration by size of