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Emerging Markets and E-Commerce in Developing Economies

Emerging Markets and E-Commerce in Developing Economies
Author(s)/Editor(s): Kamel Rouibah (Kuwait University, Kuwait), Omar E. M. Khalil (Kuwait University, Kuwait)and Aboul Ella Hassanien (Cairo University, Egypt)
Copyright: ©2009
DOI: 10.4018/978-1-60566-100-1
ISBN13: 9781605661001
ISBN10: 1605661007
EISBN13: 9781605661018

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Description

High Internet penetration in regions such as North America, Australia, and Europe, has proven the World Wide Web as an important medium for e-commerce transaction. Despite the soaring adoption statistics for those already developed societies, diffusion rates still remain low for the less developed countries, with e-commerce in its infancy.

Emerging Markets and E-Commerce in Developing Economies enhances understanding of e-commerce models and practices in less developed countries, and extends the growing literature on e-commerce. An essential addition to worldwide library collections in technology, commerce, social sciences, and related fields, this essential contribution expands the body of knowledge in the field with relevant theoretical foundations, methodologies, and frameworks, to the benefit of the international academic, research, governmental, and industrial communities.



Preface

Countries with low-to-middle per capita income are considered emerging, or developing, market economies. Emerging markets include countries in Asia (e.g., China, and India), South and Central America (e.g. Brazil), the Eastern Bloc (e.g. Russia), Middle East (e.g. Egypt, Kuwait), and African countries (e.g. Tunisia and Uganda). Although they vary from very big to very small, these countries are emerging markets because of their developments and reforms. They constitute approximately 80% of the global population and represent about 20% of the world's economies [1].

The emerging market countries, also called developing countries (hereafter DCs), often embark on aggressive, fast economic and social reform programs. Throughout this transformational process, these countries have to weigh diverse local political, economical, and social factors as they attempts to open up their economies to the world; and leverage the opportunities made available by the advancing information and communication technologies (ICT) in searching for solutions to the emerging issues and accelerating the transformation process.

ICT and the Internet play a pivotal role in transforming the economies of DCs. This role takes different forms, including new and revamped information systems, Internet-based applications, and new forms of executing transaction, communication, and service (e.g., e-business, e-commerce, e-government, e-procurement e-payment, etc.). The adoption of these emerging technology-based applications should assist DCs to lower transaction and agency costs, enhance flexibility, and improve resources management.

The Internet World Statistics report of February 2008 illustrates that the number of Internet users worldwide exceeds 1.32 billion, of which approximately 712 millions (54%) live in DCs [2]. In addition, the numbers of Internet users in DCs continue to experience steep growth. For instance, China and India, the largest among DCs, have respectively experienced growth rates of 833% and 1100% between 2000 and 2007, with a total of 210 and 60 million of Internet users in 2007. Moreover, today, DCs account for more than half of the world’s total telecommunication connections, and this will grow to 69 percent by 2010 [3].

Although young, e-commerce is rapidly growing in DCs, as a part of the transformation processes that are taking place in these countries. E-commerce is broadly defined to include not only transacting electronically over a network, mostly the Internet, but also to include electronic communication, collaboration, and coordination among participants. While e-commerce literature is relatively rich in information on e-commerce experience in developed countries, little is available on the ecommerce experience in DCs, although this represents a multitude of opportunities and risks.

This book is intended to help reduce such a disparity in the existing e-commerce literature. It compiles a collection of eighteen high quality chapters covering e-commerce development and practice in a number of DCs such as Algeria, China, Egypt, Kuwait, Malaysia, Russia, Serbia, Sri Lanka, Uganda, Tunisia, India, Indonesia, and Philippines.

This book provides researchers, professionals, managers, and policy makers with a synthesis of current research on DCs’ experience with e-commerce. It accentuates e-commerce impediments, opportunities, and strategies; underlines future research directions; and underscores valuable lessons for future e-commerce initiatives. The eighteen chapters of the book are grouped into six parts, which are briefly highlighted below.

Part I, e-Commerce in DCs: An Overview, sets the stage for the rest of the book and presents an overview of the e-commerce status in DCs, as portrayed in the relevant literature. A review and synthesis of the literature on e-commerce development and practice in DCs, although is currently inadequate, is beneficial to e-commerce researchers and practitioners.

Part I includes two chapters. Chapter 1, "E-commerce in Developing Economies: A Review of Theoretical Frameworks and Approaches," provides a synthesis of the current research on e-commerce in DCs and serves as a road map providing future directions for both academics and practitioners. Boateng, Molla, and Heeks undertook a meta-analysis of the published literature on e-commerce in DCs. The analysis covered 245 articles published between 1993 and 2006 in seventy-six different journals on electronic commerce, information systems, global information technology, development and developing countries. In taking stock of this literature, the chapter identifies enduring research themes, classifies the existing research based on such themes, and reviews the theoretical and conceptual approaches used by researchers. The findings suggest that e-commerce research to date has mainly focused on outlining e-commerce potential and assessing adoption and implementation issues in DCs. The authors call for future research to focus more on measuring the benefits of e-commerce for DCs and on strategic understanding of how to achieve and sustain these benefits.

Similarly, Chapter 2, "Significance and Success Factors of E-Commerce in China and Russia – An Empirical View," delineates and discusses empirical findings and conceptual ideas concerning the current and future prospects of e-commerce in emerging markets, with a special focus on China and Russia. Besides their own empirical evidence drawn from two online-surveys covering business companies from different industries as well as management consultancies in these countries, Decker and Kroll report the findings from a meta-analysis of a number of recent relevant studies. The resulting managerial implications are primarily based on those factors, which determine the success of e-commerce activities and the corresponding value creation.

Part II, Challenges to e-Commerce Adoption in DCs, stresses the challenges that DCs must overcome in order to successfully undertake e-commerce initiatives. While developed countries have shown impressive performance in their respective economies, many developing countries still lag behind in the e-commerce race. This lag could be due to several reasons including, but not limited to, language, education, technology and technical infrastructure.

Part II consists of three chapters. Chapter 3, "Identifying Factors for lack of e-commerce in developing countries," emphasizes the fact that the past few years have seen a rise in the number of companies embracing e-commerce technologies in developing countries. However, as compared to developed nations, DCs still lag behind in e-commerce. Sharma and Gupta identify some of the reasons that may be responsible for lack of e-commerce in developing countries. For the scope of their study, they limited developing countries to China, India, Indonesia, Philippines and Sri Lanka. Their study identifies factors at the macro level to understand why the adoption of e-commerce in developing countries has not taken off as expected.

In Chapter 4, "eCommerce Development in China: An Exploration of Perceptions and Attitudes," Stylianou, Robbins, and Jackson posit that, with over 1.3 billion people and double-digit economic growth, China could potentially emerge as the largest Internet and telecommunications market in the world, if certain economic, environmental, and organizational barriers are effectively addressed. They developed and used a profile to describe the Chinese business managers' awareness of the technological infrastructure as well as their perceptions and attitudes regarding eCommerce. Their findings on the managers' views on a variety of environmental, organizational, and personal factors provide insight into the future of eCommerce in China. Chinese firms that are interested in engaging in eCommerce will likely find a knowledgeable and supportive business climate. However, e-commerce initiatives may be hindered by constraints imposed by the existing technological infrastructure and political environment.

Chapter 5, "e-Commerce Adoption and appropriation by SMEs in Sri Lanka," presents a framework, proposed by Kapurubandara and Lawson, for e-commerce adoption by small and midsized enterprises (SMEs) in Sri Lanka. The framework has been developed based on an initial exploratory study of seventeen SMEs, followed by a regional survey of 625 SMEs from various industry sectors, along with interviews with the SME intermediary organizations. The framework helps an SME to identify its ICT and e-commerce sophistication maturity stages using five-stage variables, the barriers it faces in the adoption of e-commerce, and the support necessary to overcome the identified barriers. The authors argue that their framework is a preliminary framework to e-transform SMEs in DCs.

In last chapter, Chapter 6, of part II, "e-Commerce in Developing Countries: Impediments & Opportunities," Efendioglu speculates that different characteristics (e.g., infrastructure and socio-economic) of the local environment create significant levels of variation in the acceptance and growth of e-commerce in different regions of the world. The findings of his research on e-commerce development in China provide insights into some of the impediments for the development and use of e-commerce. Efendioglu then discusses the impediments and proposes a number of strategies for a successful development of e-commerce in developing countries.

Part III, e-Government in DCs, introduces examples of e-government experience in DCs. E-government is a powerful tool for bringing about changes to government processes in DCs. In order for e-government initiatives to succeed, they are expected to provide users with compelling reasons/ benefits to adopt them as well as having the requisite critical success factors in terms of technological and political support to sustain them.

There are two chapters in this part. In Chapter 7, "e-Governance in Uganda: Experiences and Lessons Learned from the DistrictNet Program," van Reijswoud and de Jager posit that e-government, which operates at the crossroads between Information and Communication Technology (ICT) and government processes, can be divided into three overlapping domains: e-administration, e-services and e-society. To succeed, e-governance must be firmly embedded in the existing government processes, be supported politically and technically by the governments, and provide users with reasons to use these on-line domains. The authors used these three e-governance criteria to evaluate the achievements of the DistrictNet e-governance program in Uganda which started in 2002. The program aimed at providing transparency at the local government level and improving the provision of public information using information and communication technology (ICT). Based on the evaluation, the authors present a number of lessons that can be used to guide smaller programs at the local government level in other DCs.

On the other hand, Chapter 8, "e-Government and its Impact on E-Commerce in LDCs," illustrates the impact of e-government on e-Commerce development and implementation in the DCs. Rabaiah, and Vandijck argue that since e-Government is about enhancing efficiency and transparency of government operations, research efforts should explore new perspectives on how and where e-commerce can prevail in this shift in government operation paradigm. There are new opportunities for DCs to utilize new ICT offerings to achieve growth, efficiency, and cost reduction. The authors then discuss a number of these opportunities and draw a connection between e-government and e-commerce in such a way that helps decision makers in DCs to understand the potential of e-government for a better implementation of e-commerce.

Part IV, National Culture and e-Commerce Adoption in DCs, marks the significance of national culture on e-commerce development and behavior in DCs. Global deployment of ICT and e-commerce applications require a thorough understanding of the impediments that cultural differences may create. Cultural differences are expected to play a major role on e-commerce behavior in developing economies. However, since most of the empirical support for the technology acceptance models was mainly obtained from Western and well developed countries, these models are not necessarily applicable to all cultures. Little research has been done on technology diffusion, including e-commerce, in DCs which exhibit vast and distinctive cultural differences from developed countries.

Part IV comprises three chapters that deal with e-commerce adoption and the effect of culture. Chapter 9, "Cultural Interpretation of e-Commerce Acceptance in Developing Countries: Empirical Evidence from Malaysia and Algeria," presents one of a few studies that is aimed at testing the possible influence of cultural values on the acceptance of e-commerce in the two developing countries which exhibit two distinct national cultures (Malaysia and Algeria). Based on a synthesis of the technology acceptance models and cultural theories, Belkhamza and Wafa incorporated cultural values into a TAM model. The model testing results indicate that the four cultural values of individualism/collectivism, power distance, uncertainty avoidance, and masculinity/femininity identified by Hofstede are posited to explain the e-commerce acceptance in the context of these two developing countries. The role of cultural differences was found to be a noteworthy moderator in the proposed e-commerce acceptance model, emphasizing the role of cultural aspects in multi-national e-commerce research. The authors therefore suggest to look more into the social influence on the behavioral intention, which calls for attention in understanding benefits of e-commerce adoption based on cultural, rather than cognitive and norms criteria. The authors also suggest that e-commerce companies attempting to penetrate and assist the Algerian e-commerce companies should focus on creating and fostering a secure e-commerce image, and investigate the attitude of those organizations. The Malaysian culture, similar to that of Algeria, exhibits a strong relationship between usefulness and usage intention. It should be important therefore to make it a business priority to establish a strong local identity and presence in the local country.

On the other hand, Chapter 10, "Cultural Differences, Information Technology Infrastructure and E-Commerce Behavior: Implications for Developing Countries," presents a study by Genis-Gruber and Tas that was designed to investigate the role of cultural differences and information technology infrastructure on e-commerce usage in developed and developing countries. They used Hofstede’s national culture taxonomy to classify the investigated countries according to both Hofstede's cultural indices and their technological and economic development. Their research design controlled for the possible impact of information infrastructure and education level on e-commerce usage. The authors found culture to play an incremental role in e-commerce usage and in the relationship between infrastructure and e-commerce.

The last chapter in this part, Chapter 11, "Mobile-Commerce intention to use via SMS: The case of Kuwait," presents a study that Rouibah and Ould-Ali conducted in order to test a number of models-namely, the theory of reasoned action, the theory of planned behavior, the technology acceptance model (TAM), the decomposed theory of planed behavior, Nyvseen’s et al., (2005) model, as well as a revised version of TAM proposed by the authors--in explaining the intention to use short messaging systems (SMS) on banking transactions in Kuwait. A convenient sample of 171 users was used. The results suggest that the decomposed theory of planned behavior has the largest explanatory power, followed by the author's revised version of TAM. On the other hand, TAM and the theory of reasoned action have had the least explanatory power. In addition, results indicate the absence of a dominant factor (i.e. a variable that exerts the strongest effect on behavioral intention to use SMS) across the six models, which may reveal a unique characteristic of the local culture. Such a result calls for caution when applying different technology adoption models across different cultures and regions.

Part V, Strategies for Successful e-Commerce Development in DCs, introduces a number of guiding principles that may increase the likelihood of e-commerce success in DCs. Compared to developed countries, e-commerce adoption in DCs has been slower and more recent. Given their tight resources, including time, developing countries seem to seldom have the luxury of affording to make mistakes and fail in their e-commerce development initiatives. Nevertheless, e-commerce developers in DCs have the opportunity to learn from the experience of, and the mistakes made by, their counterparts in the developing countries.

This part has three chapters. In Chapter 12, "An Economic Framework For The Assessment Of E-Commerce In Developing Countries," Yousefi presents a theoretically-based model for economic analysis of e-commerce in DCs. The Porter diamond model is adopted in order to economically examine the factors that affect e-commerce. The model does not only capture factors that are considered the driving forces for e-commerce, but it also facilitates the assessment of e-commerce and the identification of the global competitive advantages of the firms. Therefore, the model can be used as a framework that guides policy making and predicts the changes in the rapidly expanding e-commerce in DCs.

In Chapter 13, "Guidelines for Preparing Organizations in Developing Countries for Standards-based B2B," Aggestam and Söderström also propose a “tool” for managing the critical success factors (CSFs) in B2B development. The tool has been developed based on an existing framework and experiences drawn from B2B developments in the well developed countries. It includes a set of concrete and detailed guidelines that directs the actions needed during the preparation stage of B2B projects. The guidelines are further discussed considering the problems and conditions that are relevant to DCs.

The last chapter of this part, Chapter 14, "A Proposed Template For The Evaluation Of Web Design Strategies," emphasizes the importance of having well-designed web sites as a requisite for successful e-commerce practices. Xanthidis, Nicholas, and Argyrides propose a template aiming at standardizing web site evaluation. The template has been developed based on a thorough review of the relevant literature, which is rich in ideas and opinions of different professionals involved in web site design. The template consists of fifty-three items that the design strategies of the web sites can be checked against. The results of testing the template on 232 websites of Greek companies suggest its appropriateness in measuring web site quality. The authors believe that the proposed template is a step forward towards the standardization of the web site evaluation process, which could be useful for companies in DCs.

Part VI, Case Studies on e-Commerce in DCs, provides in-depth examples of e-commerce experience in certain DCs. Although classified together and characterized by common characteristics, DCs have had different experiences with e-commerce development and practice. Country-specific investigations produce meticulous information on the e-commerce development, drivers, problems, successes, and failures. Understanding e-commerce development experiences in certain developing countries should be valuable to policy formulation and decision making in the other DCs that have similar conditions in their e-commerce development.

Part VI incorporates three chapters. In Chapter 15, "Electronic Commerce Reality In Tunisia," Ziadi and Ben Sala profile e-commerce practices and challenges in Tunisia. The profile focuses on two distinct e-commerce experiences: e-commerce transactions via the Tunisian Post Office (known as the ONP), and e-commerce operations via the Banking Association (known as the SMT). The authors explore the problems facing e-commerce in Tunisia and propose solutions that help e-commerce expansion.

Chapter 16, "Electronic Commerce In China: Can We Wake Up The Giant? ," on the other hand, introduces four sets of prerequisites for successful e-commerce development, including national factors, related and supporting industries, firm strategy, structure and rivalry factors, and demand conditions. Li and Suomi further discuss the status of e-commerce development in China, along with the four sets of success prerequisites, with the purpose of identifying the influential factors which impede e-commerce development in China.

Chapter 17, "Evolution of Electronic Procurement in Egypt Case of Speedsend.com," however, presents a case of an Internet startup that capitalizes on the opportunities presented by the information economy in Egypt. Since its inception in 2001, the B2B platform of speedsend.com has pioneered the electronic procurement industry in Egypt through a customized web-based platform. The case focuses on the models deployed by the company demonstrating the internal and external challenges faced and lessons learnt. The author, Kamel, stresses that the Internet company's success is attributed to its capability to transform the classical emerging markets challenges into opportunities, including technology infrastructure deployment, community awareness, information availability, and cultural adaptation of the online business, amongst others.

The final chapter, Chapter 18, "The State And Development Of E-Commerce In Serbia, introduces a multidimensional model for the assessment of e-commerce diffusion in a country. Jošanov and his colleagues used the model to evaluation the state of e-commerce diffusion in Serbia. After the breakdown of Yugoslavia and 10 years of conflicts and stagnation, Serbia started an economic reform program, and was pronounced the leading reformer in 2005 by The World Bank. The authors found that, in general, some progress was made in e-commerce diffusion in Serbia; however, progress varied along the different dimensions of the model with problems about the need for new laws and lack of e-payment system. The chapter further discusses a B2B strategy that puts together the facilitating conditions that enable Serbia to engage in the global electronic economy.

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Reviews and Testimonials

This book accentuates e-commerce impediments, opportunities, and strategies; underlines future research directions; and underscores valuable lessons for future e-commerce initiatives.

– Aboul Ella Hassanien, Cairo University, Egypt

This collection identifies the challenges developing countries face when undertaking e-commerce initiatives, explores the role of national adoption, and outlines guiding principles for increasing the likelihood of e-commerce success.

– Book News Inc. (December 2008)

Author's/Editor's Biography

Kamel Rouibah (Ed.)
Kamel Rouibah is an Associate Professor of information systems, College of Business Administration (CBA) at Kuwait University. He holds a PhD in Information Systems from Ecole Polytechnique of Grenoble, France. Before joining CBA, he worked at Faculty of Technology Management at Eindhoven (Netherlands) and Institut National de la Recherche Scientifique (France). His research interests include design of information systems, management information systems, engineering data management, workflow management, information systems, and information technology acceptance. He was involved in several European projects. His publications appeared in several leading journals: Journal of Strategic Information System, IT & People, Computers in Industry; International Journal of Computer Integrated Manufacturing; Robotics & Computer Integrated Manufacturing Journal; Journal of Decision System; Journal of Engineering Design. He has also taught many information systems courses in France, Netherlands, and Kuwait.

Omar Khalil (Ed.)
Omar Khalil is currently a Professor of Information Systems, Quantitative Methods & Information Systems (QMIS) Department, College of Business Administration, Kuwait University. He has a PhD in Information Systems from the University of North Texas. His publications have appeared in journals such as the Journal of Global Information Management, Journal of Organizational and End- User Computing, Information Resources management Journal, International Journal of Production and Economics, International Journal of Man-Machine Studies, Journal of Business Ethics, Journal of informing Science, and International journal of Enterprise Information Systems. His research interest includes information systems effectiveness, global information systems, information quality, and knowledge management. He has taught many graduate and undergraduate information systems courses in a number of universities in Egypt, USA, and Kuwait. He has served as the program committee member of various international conferences and reviewer for various international journals.

Aboul Hassanien (Ed.)
Aboul Ella Hassanien (Abo) is a Professor at Cairo University, Faculty of Computers and Information, IT Department and the Chair of Scientific Research Group in Egypt (SRGE). Abo is the chair of the International Rough Sets Society-Egypt Chapter. He received his BSc with honors in 1986 and MSc degree in 1993, both from Ain Shams University, Faculty of Science, Pure Mathematics and Computer Science Department, Cairo, Egypt. On September 1998, he received his doctoral degree from the Department of Computer Science, Graduate School of Science & Engineering, Tokyo Institute of Technology, Japan. He works in a multidisciplinary environment involving machine intelligence, network security and cryptology, data mining, various issues in intelligent environment including monitoring pollutions, technologies for disabled people including text-to-speech for blind people, Arabic sign Language, Social networks, biomedical engineering and bioinformatics and their applications to various real-world problems. He has authored/coauthored over 360 research publications in peer-reviewed reputed journals, book chapters and conference proceedings. He has served as the program committee member of various international conferences and reviewer for various international journals. He has received the excellence younger researcher award from Kuwait University for the academic year 2003/2004. He has guest edited many special issues for international scientific journals. He has directed many funded research projects. He is the editor and co-editor for more than 30 books in the area of rough computing, computational intelligence, social networks, bioinformatics, and E-commerce. For more details, please see http://www.egyptscience.net.

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