E-commerce Matrix: Enhancing SME Competitiveness in International Trade

1. E-Commerce Achim Seiler, Trade Consultant and Capacity Building Specialist, Kathmandu EU-Project: Trade and Private Sector Development (TPSD) TPSD is implemented by in cooperation with and

2. This training module is based on various ITC and UNCTAD materials. In essence, it follows the substance and the logic of the ITC SME Academy training course on E-commerce

3. Facets of e-commerce

4. Types of e-commerce transactions

5. E-Commerce: Disintermediation Producer Producer Country A Country A Exporter Importer Distributor Country B Country B Retailer Consumer Consumer

6. The E-connectivity gap • limited purchasing power • Lack of trust • Limited shopping options in local languages • Limited payment options • Poor delivery services

7. The Benefits of E-connectivity for SMEs • Building an international reputation • Expanding outreach • Reducing market research costs • Disintermediation in international trade • Leveraging e-commerce ecosystems (Financing options, shipping, delivery and logistics solutions, promotion packages, legal and financial advisory services, market information and analysis, B2B matchmaking services)

8. Constructing an E-commerce Matrix (I) Three layers of SME competitiveness: • Firm –level capabilities can be controlled by SMEs themselves • Immediate business environment can be partially controlled by SMEs • National environment beyond the control of SMEs

9. Constructing an E-commerce Matrix (II) The e-commerce process chain: • Establishing an online business • International e-payment • Cross-border delivery • After sales

10. Constructing an E-commerce Matrix (III)

11. Constructing an E-commerce Matrix (IV) To be added by:

12. Constructing an E-commerce Matrix (V) An E-commerce Matrix is a combination of the three SME competitiveness layers – amended by the international dimension – and the e-commerce process chain. When completed, an E-commerce matrix helps analyze e-commerce in its totality, while pinpointing problems in a specific segment.

13. Constructing an E-commerce Matrix (VI)

14. Using the E-commerce Matrix to look at an e-commerce problem (Scenario)

15. Action needed to close the E-commerce Gap (Scenario)

16. E-commerce checklist: Firm level capabilities

17. E-commerce checklist: Immediate Business Environment

18. E-commerce checklist: National Environment

19. E-commerce Frameworks: International Environment

20. International Policy Environment (Examples) The Revised Kyoto Convention (WCO) is a blueprint for modern and efficient customs procedures in the 21st century. It plays a fundamental role in stimulating growth of cross-border trade in goods, as well as in fighting against illicit trade in fraudulent products. The Budapest Convention on Cybercrime is the first international treaty seeking to address Internet and computer crime by harmonizing national laws. The Electronic Communications Convention (UNCITRAL) aims to facilitate the use of electronic communications in cross-border trade by ensuring that contracts and communications exchanged or concluded electronically have the same validity as their paper-based equivalents United Nations Guidelines on Consumer Protection give important legitimacy to the principles of consumer rights, as well as practical support and guidance for developing national consumer protection legislation.

21. Policy Areas for a conducive national e-commerce environment (I) Online: • Internet access, cost and speed • Access to e-platforms and development of e-platforms • E-payment solutions • Data regulations • E-signatures and e-contracts • Online consumer protection • Online fraud and cybercrime law

22. Policy Areas for a conducive national e-commerce environment (II) Online: • Dispute settlement procedures for online transactions • E-government and e-procurement • Net neutrality. Search neutrality

23. Policy Areas for a conducive national e-commerce environment (III) Offline: • Customs procedures • De minimisrules • Drawback of duties when returning goods • Affordable logistics services for SMEs • Access to finance • Business registration • IP rights and enforcement • Access to support services

24. Policy Areas for a conducive national e-commerce environment (IV) Offline: • ICT and electricity infrastructure • Transport infrastructure • Skills development

25. Formulating an E-commerce Strategy (I) Be focused on SMEs: This includes not just those SMEs that are obviously lagging behind in e-commerce, but also those SMEs that are most likely to benefit from it as well Focus on specific industries: A focus on specific industries is paramount to effectively promote inclusion in e-commerce. Distinguish between domestic and cross-border e-commerce: The requirements of cross-border trade are different from those of domestic trade

26. Formulating an E-commerce Strategy (II) Incorporate ICT: Information and communication technologies (ICT) are a crucial part of e-commerce, and as such should form an important part of any national e-commerce strategy Ensure platform development: Ensure the availability and continued development of e-commerce platforms, as well as delivery systems and payment solutions tailored to local needs, languages and cultures Consider the distribution of benefits and costs: How are benefits and costs split among major stakeholders? What are the fiscal implications and societal impacts in the country?

27. Actors responsible for e-commerce success • The government • Customs • Academia • TISIs, TPOs and trade support institutions • Postal services and shipping companies • Banks • International Organizations • Consumers • Internet Service providers • Payment solution providers