E-Commerce Participation

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Business web sites in these countries were identified by using search engines and business directories. Each site was checked to ensure that the business had a significant export-orientation. Businesses that were mainly local (e.g., restaurants, health services, banks, automotive) were excluded. Table 2 reviews the totals found.

Table 2

Ghana	7
Kenya	60
Mozambique	11
Nepal	229
Nicaragua	44
Pakistan	152
Senegal	5
Sudan	0
Tanzania	86

Only one country — Sudan — has no commercial web sites (and no hosts listed by ISC). The other eight countries identified by the UN as the most "marginalized" have at least fledgling efforts in the world of international e-commerce. These numbers have to be kept in context — remember the US has 43 million .com sites — but at least some businesses are making the effort.

To learn more about the experiences of companies attempting e-commerce in these countries, a short email survey was sent to many of the businesses identified in three countries (one per continent) — 116 companies in Nepal, 44 in Nicaragua, and 57 in Tanzania. Thirty-three surveys were returned (15 from Nepal, 11 from Tanzania, and seven from Nicaragua) from the 214 businesses that received the email survey. Results are tabulated below.

	Nepal	Tanzania	Nicaragua
Location of Web host	U.S. - 7 Nepal - 8	U.S. - 5 Tanzania - 3 UK - 3	U.S. - 4 Nicaragua - 2 Elsewhere - 1

As can be seen, the US was home to nearly half the web sites found. This significant use of hosting services in other countries was also found in the other countries reviewed. For example, of 98 web sites displaying Pakistani goods for export, 69 sites were hosted in the US. All seven Kenyan exporters are using US-based web sites. So it appears that one of the responses to weak local infrastructure is to use hosting services elsewhere. Lake (2000) points out that an international host also raises the credibility of the enterprise and reduces fears some consumers may have about purchasing from a distant land. On the other hand, at least some hosting is being done at the local level, so we can see that some facility is available. The good news for these countries is that since sites are being created and hosted locally, the talent that created and maintains those sites is also available locally and can be used by other businesses that wish to begin e-commerce efforts (Nepal's business directory lists nine Internet service providers or web development companies).

The second local issue surveyed was site costs. Those results are as follows:

	Nepal	Tanzania	Nicaragua
Monthly cost	<$20/month - 13 $20–$30/month - 2	<$20/month - 6 $20–$50/month - 3 over $50/month - 2	<$20/month - 4 $20–$50/month - 2 over $50/month - 1

These costs are significantly lower than one would expect given the normal higher costs of telecommunications in developing nations. By UNDP calculations, monthly internet charges amount to 1.2% of the monthly income of a US user, 614% for a user in Madagascar, 278% in Nepal, and 191% in Bangladesh. While the costs shown are still high given national income levels, they are less than would otherwise be expected.

The survey also asked for an estimate of traffic to the e-commerce site. Those results were unfortunately low:

	Nepal	Tanzania	Nicaragua
Business Inquiries per month	< 20 - 7 20–50 - 5 over 100 - 1	< 20 - 3 20–50 - 3 50-100 - 4 over 100 - 1	< 20 - 5 20–50 - 1 over 100 - 1

While each country had one site that was generating significant traffic, most sites were struggling.

The last question on the survey asked respondents to identify the nation that provided the most customers for their products. The US was the largest customer in all cases:

	Nepal	Tanzania	Nicaragua
Major foreign customer	U.S. - 9 Europe - 6 Asia - 2	U.S. - 8 Europe - 8	U.S. - 5 Latin America - 2

Respondents also made a number of comments on the obstacles they faced. One described trouble in getting banks to credit international payments. Several mentioned the high shipping costs they faced. One mentioned language problems — he could create a web site in English, but wanted to sell to other European countries and did not know their languages. And others mentioned the general difficulty of having web sites noticed among the millions that exist. These difficulties are all similar to those identified in other studies of e-commerce in developing countries (Lake, 2000; Mukti, 2000; Pradhan, 2002; Mujahid, 2002). The surprise is the number of companies that are using remote hosting to address some of the cost and infrastructure problems.

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