The e-Development of the Caribbean Series: Part One - A brief look at e-Commerce

Venesa Watson
July 29, 2013. 

E-commerce can be loosely defined as the buying and selling of goods and services on the Internet. This e-service comes in various forms: Business to Business (B2B), Business-to-Consumer (B2C), Consumer-to-Business (C2B) and Consumer-to-Consumer (C2C). Since its introduction some four decades ago, this industry has enjoyed an explosive growth, resulting in significant economic development and returns to nations that have tapped into its market. In fact, it is reported that e-commerce sales topped US$1 Trillion on 2012, with the main earners being Asia-Pacific, North America and Western Europe [¹]. Other advantages of e-commerce include: overcoming geographical limitations, lowering costs, elimination of travel time and cost, creating markets for niche products, and improvement in customer service [²]. This leaves one to wonder why the Caribbean has yet to fully tap into this highly profitable market and realize some of its benefits. To answer this question, we must consider the region’s e-Readiness with regards to infrastructure, labour and market: Do we have all the necessary tools? Is there widespread access to these tools? Do we have sufficient and effective laws to protect e-commerce and other such computer use? Do we have a labour pool of computing majors? Are Caribbean nationals interested in e-commerce?

 Data from the International Telecommunications Union (ITU) shows the following results with regards to ICTs in the Caribbean[†] as of 2012: Internet Subscription is at 50.5% (13.8 million); Broadband Subscriptions is at 3.58% (979, 944); Mobile Subscriptions is at 83.35%; and Fixed-Landline Subscriptions is at 8.64% (2.4 million). This information shows that the Caribbean has a relatively good access to ICTs, which is expected to increase based on the current trend (see Figure 1). However, more data is needed to determine if other tools, such as e-commerce websites, credit cards and similar payment methods are widely available and accessible. The Caribbean is lacking somewhat in laws against cybercrime, and laws to protect user data. Whilst some laws are still in draft form, others have limited powers. Stronger and more adequate laws are very important in order to encourage e-commerce - users must have confidence in the protection of the law when engaging in e-commerce activities. With regards to the labour pool of computing expertise, data from annual reports provided by the major Caribbean university, namely the University of the West Indies, shows that between 2008 and 2012, there have been at least 359[‡] students (at the undergraduate and postgraduate levels) holding a computing degree. With such a sizeable pool of computing majors, and easy-to-use web design services such as Wix, building e-commerce websites should not be much of an issue in the Caribbean. Research by Fraser and Wresch [³] supports this view with information showing how some Caribbean businesses have dipped into the e-commerce market, reaping some of its benefits. Of more precedence, however, is the availability of those computing majors who have computer security and/or computer forensics expertise. Such specialists would be responsible for securing sensitive data and the payment channels, discovering breaches, and tracking cyber-criminals. Similar to the laws, the aforementioned roles are very important, as the use of technology, especially for sensitive undertakings (e.g. storing credit card information and other personal data), is not readily met with enthusiasm. Whilst there is no available data on the interest of Caribbean nationals in e-commerce, surveys are guaranteed to show that persons, especially within the 18 - 45 age group, have been engaging in e-commerce activities, and would anticipate the growth of e-commerce facilities in the region.

 

Figure 1: Line Graph showing the percentage use of various ICTs in the Caribbean

Figure 1: Line Graph showing the percentage use of various ICTs in the Caribbean

“E-commerce arguably has a potential to add a higher value to businesses and consumers in developing countries than in developed countries...Yet most developing country-based enterprises have failed to reap the benefits offered by modern information and communications technologies (ICTs)” [ª]. Following the e-commerce strategies put forward for developing countries, the region can target the Caribbean’s diaspora, who have larger access to credit cards and a greater disposable income, and have been found to shop not just for themselves, but for relatives living in the region [ª][º]. Last year, Trinidad and Tobago, and Jamaica celebrated 50 years of independence with a series of activities and large production of memorabilia’s. Increases in travel costs, and job commitments among other things, prevented some Caribbean expatriates from returning to celebrate. With a thriving e-commerce market, the two celebrating nations could have profited from this group by selling memorabilia’s, recordings of independence activities, and subscriptions to live shows. Furthermore, the region’s visibility has increased in the international arena due to the success of our athletes, musicians and scientists - we now have the attention of the world [to some extent], we need to capitalize on this and make ourselves known for more than just sea, sand and sun. We have products that are not exported, due to lack of sufficient demand - but there are pockets of consumers (tourists and other visitors, expatriates, etc.) who would enjoy the possibility of getting an authentic piece of the Caribbean being delivered to their doorstep. The Caribbean can benefit from this new market of consumers. Improvement in the regional distribution of the goods and services offered by each nation is also a possibility with e-commerce, and could allow us to establish our own version of E-bay, and make better use of delivery services offered by regional courier and airline-cargo services. The Caribbean is not far off from realizing its e-commerce potential, but time is of the essence. Reports [º] shows that top e-commerce retailers are looking to expand into the markets of developing nations to improve on their returns - our governments need to make more progress in the e-commerce market before the region is overtaken by the current forerunners. 

[†] Includes Antigua & Barbuda, The Bahamas, Barbados, Belize, Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, St. Kitts-Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname and Trinidad and Tobago - total population of 27.4 million (2012 estimate)

[‡] Data from the three largest campuses (Cave Hill, Mona and St. Augustine) - not all data was available, as such, number of computing majors should be higher.