e-commerce for smes facilitated by low cost devices, cloud computing, and social networking ict...

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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 dsalcedo@OpenEntry.com - 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 dsalcedo@OpenEntry.com - tel: +1.240.242.9798