The adoption of B2B e-commerce applications based on the Internet and the World Wide Web is being promoted in some quarters as offering producer firms in developing countries new exchange mechanisms that enable them to compete on a more equal basis in world markets. In this optimistic view B2B e-commerce promises a radical shift in the way in which international buyers and sellers trade with one another. The argument presented in this paper challenges the efficacy of this outlook. Evidence obtained from research involving an attribute analysis of 184 e-marketplaces and interviews with 75 enterprises and 37 key informants in two major sectors in three developing countries (Kenya, South Africa, and Bangladesh) suggests that Internet-based B2B e-commerce is not as effective in reducing transaction costs or in opening the doors to global markets as the optimists would have us believe. The evidence also suggests that Internet-based B2B ecommerce has only marginally altered the way in which international buyers and sellers in the garments/apparel and horticulture/agriculture sectors trade with one another. The paper concludes that policies aimed at promoting 'e-readiness' are unlikely to succeed on terms that maximise benefits for developing country producers if they fail to give careful attention to the specific characteristics and positioning of these firms within global value chains, and to the digital applications they use to deal with operational challenges.
Paper prepared for: Association of Internet Researchers (AoIR) International Conference, Internet Research 3.0: Net/Work/TheoryMaastricht, the Netherlands, October 13-16 2002, 16 pp.
B2B E-commerce Services and Developing Countries: Disentangling Myth from Reality.