Early Promise of E-commerce

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E-commerce for SMEsFacilitated by Low Cost Devices,

Cloud Computing, and Social Networking

ICT Learning DaysWorld Bank - March 1, 2012

by Daniel Salcedo, Founder & CEO of OpenEntry.com [email protected] - tel: +1.240.242.9798

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Early Promise of E-commerce• Poor people generally produce stuff to

sell or work for somebody who does. More efficient markets help the poor as producers as well as consumers.

• Development experts in the 1990’s, “level the playing field for the little guy”

• Bill Gates – disintermediation will enable “friction free capitalism”

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Everybody thought it was a technical challenge of getting SMEs online• Complicated - needed to know HTML or hire an

expert or buy software• Laborious – had to hand code every catalog

page instead of pulling from a database• Expensive – own domain and hosting, credit

card payment required• English required• Logistics of international payment and shipping

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Even if a SME managed to build a beautiful catalog…

• Buyers couldn’t find it among the billions of websites on the Internet

• Even if they did, they wouldn’t trust it• So, besides the technical obstacles,

the main challenge of e-commerce is visibility, credibility, and trust

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Conventional Wisdom: • Though e-commerce worked for the big guys, it

didn’t work for SMEs in international trade in spite of billions of dollars spent

• Dot-com bubble burst and formerly infatuated experts fell out of love

• The development fashion pendulum swung from way too positive to way too negative – the reality is somewhere in between

• WSIS Forum – e-government, e-health, e-agriculture but no e-commerce for the poor

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Recent Advances Change Everything

• Proliferation of low cost devices (mobile phones, netbooks, tablets) greatly expands the hardware choices for Internet access

• Internet costs continue to drop while its reach/speed increase. Corporations now offer powerful "cloud computing" services

• Social networking services enable millions to publish their information with images and demonstrate the power of trusted networks

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OpenEntry is a Development Organization

• Mission – to help artisans and SMEs to benefit from e-commerce

• Support from World Bank, USAID, IDB, Rockefeller, Oracle, eBay, individuals, more

• Developed an e-commerce platform for artisans and SMEs worldwide

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Free Catalogs in 44 Countries on Google Cloud Computing

• Gmail - account security• Docs – information storage• Picasa - image storage• Picnik – image editing• Translate – instructions in 57 languages• Checkout - also PayPal, 2Checkout• Apps Engine - execute programs on

powerful/reliable Google severs• Android - offline mobile operation

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Catalog Features• Build in an hour from any computer or

smart phone• Multi-lingual instructions and output• Personalize with own banner/logo,

choice of templates, fonts, colors• Enabled for credit cards or RfQ• Live User Support, chat from Nepal• FREE (100 products), $200/year for

more products and catalog features

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Low Cost Offline Operation• Also designed for poor individuals and

communities without Internet• Apps for Windows and $100 Androids• Capture product images and related

information (code, name, price, description, key word – 90% of the work of preparing a catalog) offline

• For later WiFi upload (don’t need 3G)• Key mobile insight – only need to

concentrate on one data point at a time

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However, even if a SME builds a beautiful catalog…

• Buyers can’t find it among the billions of websites on the Internet

• Even if they do, they won’t trust it• The main challenge of e-commerce is

visibility, credibility, and trust

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OpenEntry Network Markets• Amazon.com EC2 Cloud Computing Facility

enables scaling for mainstream businesses• Any high profile business network– Chamber of Commerce– Export Promotion Agency– Industry Association– Trade Show

• Aggregates the catalogs of all its members (large & small) into a network market

• Generating visibility, credibility, trust

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Does it Work?http://goo.gl/EWd4b

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UNDP Conclusions• The largest impact of implementing this “pro-

poor” e-commerce approach was on income and employment.

• Firms using it reported jobs directly attributable to on-line promotion . . . 3918 women

• A relatively inexperienced group of young IT professionals could, with the proper tools, create employment for themselves while providing e-commerce services to local SMEs.

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Additional Considerations• Don’t need credit card payments – for

every $1 transacted online, $4 are influenced by the Internet

• Can start with local CoD sales, 2CheckOut.com works everywhere

• Most international sales are B2B• Shipping easier now - consolidated

shipments can cut costs by 80%

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Potential Impact is Huge Compared to the Costs

• International trade promotion• Women and youth entrepreneurs earn

income building catalogs for local SMEs• 100 million SMEs will need help moving

online in next 10 years• Modest marginal cost of including e-

commerce in projects for youth, women, employment, trade

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OpenEntry Seeking Implementation Partners

• Business networks helping their members sell online

• Governments promoting exports• Development agencies generating

income and employment

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E-commerce for SMEsFacilitated by Low Cost Devices,

Cloud Computing, and Social Networking

ICT Learning DaysWorld Bank - March 1, 2012

by Daniel Salcedo, Founder & CEO of OpenEntry.com [email protected] - tel: +1.240.242.9798