E-COMMERCE IN DEVELOPING COUNTRIES

How important is e-commerce to SMEs in developing countries? How big is
the SME e-business market?
For SMEs in developing countries e-commerce poses the advantages of reduced
information search costs and transactions costs (i.e., improving efficiency of operations-
reducing time for payment, credit processing, and the like). Surveys show
that information on the following is most valuable to SMEs: customers and markets,
product design, process technology, and financing source and terms. The
Internet and other ICTs facilitate access to this information.43 In addition, the Internet
allows automatic packaging and distribution of information (including customized
information) to specific target groups.
However, there is doubt regarding whether there is enough information on the Web
that is relevant and valuable for the average SME in a developing country that
would make investment in Internet access feasible. Underlying this is the fact that
most SMEs in developing countries cater to local markets and therefore rely heavily
on local content and information. For this reason, there is a need to substantially
increase the amount and quality of local content (including local language content)
on the Internet to make it useful especially to low-income entrepreneurs.

eMarketer estimates that SME e-business revenues will increase: from $6.53 billion
to $28.53 billion in Eastern Europe, Africa and the Middle East combined; $127.25
billion in 2003 to $502.69 billion by 2005 in the Asia-Pacific region; $23.51 billion in
2003 to $89.81 billion by 2005 in Latin America; from $340.41 billion in 2003 to
$971.47 billion by 2005 in Western Europe; and from $384.36 billion in 2003 to
$1.18 trillion by 2005 in Northern America.