Major Challenges of Ecommerce in the Developing Nations
Ecommerce can change the economies of the developing nations. It can integrate them to the global market which in turn improves and strengthens the economic well-being of these nations. However, the practice of Ecommerce in these nations is in its early stages and there are also major challenges that can hold back its growth. I categorize them in two major parts as follows;
1. Lack of online culture
Electronic way of doing business is a new concept for the societies of the developing nations. People usually buy and sell on face-to-face basis. They see and touch (physically) what they want, negotiate on best deals, and buy. This is the type of business activity they are familiar with, which is entirely different from online way of doing it. The idea of buying goods and services that cannot be seen and touched physically is not the type of risk they can afford. They are not confident also whether online merchants are trust worthy enough to deliver products and services as promised.
Merchants as well are afraid to sell their products over the Internet. Considering the lack of online buying habits of the society, and because of the reason that electronic way of doing business is not well-known, they think it is a high business risk to take. They usually are not willing to invest on online ventures. Thus, this extremely damages the growth of Ecommerce in these nations.
2. Lack of Trust
Basically, trust is a major issue in online business environment. As I mentioned earlier, people in the developing nations are not confident with online way of doing business, by which one of the major reasons is trust. Because Ecommerce is not a practice in these countries, and business is usually done on face-to-face bases, people usually raise trust issues. They are obliged to think how could they trust people they do not see and may be found thousands of kilometers away? Besides, because there are no Ecommerce policies and laws in most of developing countries, they are afraid where to go in case of disputes.
1. Limited access of Telecommunication infrastructure and high cost of Internet
Ecommerce requires technological foundations. One of the major ones is access to the Internet. To run an online business one needs an Internet connection with stable and high connection speed. However, mostly the Internet connection type in the developing nations is a dial up connection, which is very limited and slow. Besides, the cost of possessing it is high. This is another challenge Ecommerce faces in the developing nations.
2. Limited access to Personal Computers
Another major technological facility Ecommerce needs is Personal computers. Possessing computers is expensive in the developing nations because they usually are imported products from the developed nations; which is another major challenge for the growth of Ecommerce in these countries.
3. Lack of Electronic payment facilities for enabling transfer of funds
Banking is another major facility needed to do Ecommerce. And in most cases, the developing nations lack this major facility. Online merchants in these countries are obliged to use banking facilities offshore if they are going to do business over the net.
4. Imperfect legal system and policy barriers
To do Ecommerce, perfect legal system and policy is required. Without them it is impossible to do business online. However, these nations usually lack these major systems which in turn could make doing Ecommerce difficult.
However, even though doing business online in the developing nations is difficult, it is not impossible at all. It can be done given the circumstances. It could take more effort to be successful though. In addition, the industry needs time to utilize its potentials.
Thus, realizing the potential of Ecommerce in the developing nations, there are concerned bodies by which their co-operation can make a big difference. They are government, professionals, online merchants, banks and customers. If they can work together and collaborate, they can fully avoid all the above mentioned obstacles and can benefit their nations from the outputs of Ecommerce.