Exploring the reality of e-commerce in developing countries

The use of e-commerce by businesses in developing countries is related to the potential benefits of participating in international value chains, increasing market access and reach, improving internal and market efficiency, and lowering transaction costs. Belief in such benefits has led to the adoption of e-commerce by some businesses in these countries. However, the questions of what and how much benefits businesses in developing countries are actually reaping from their e-commerce investments are not well covered. This paper attempts to explore the real benefits of e-commerce based on data from 92 businesses in South Africa. The findings indicate that e-commerce benefits are by and large limited to improving intra- and inter-organisational communications. Strategic benefits such as improving relationships across the value chain, increasing market reach, and reducing market, operation and supply chain management costs are not as widely found as the standard model of ecommerce would have us believe. These findings support the argument that cautions against an over-optimistic view of e-commerce for developing countries. Read the full report at IDPM.

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