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eBay: Internet Levels Playing Field In Developing Regions

eBay: Internet Levels Playing Field In Developing Regions

A South African who buys and sells vintage camera equipment globally via the Internet may have inadvertently become a poster-child for a new paradigm in global trade, according to a WallStreetJournal report.

Cape Town-based Jean-Louis Beek is one of many small business owners and entrepreneurs in developing countries who use the Internet to access the global marketplace and, ultimately, build and grow successful enterprises, according to a guest column in the WallStreetJournal by Tod Cohen, vice president of global government relations at eBay Inc.

Beek and his business, OpticXchange, have customers on every continent speaking more than 20 languages.

Small business owners like him are enabled by technology, empowered by access and limited only by the number of hours they can work in a given day, Cohen said. And they’re succeeding at higher rates than their brick-and-mortar counterparts, according to eBay research.

A recent eBay research report, “Commerce 3.0 for Development,” claims to be the first to analyze this type of entrepreneur in emerging markets — specifically South Africa, Chile, India, Indonesia, Jordan, Peru, Thailand and Ukraine.

The report found that technology has not only reduced barriers to cross-border trade; it is helping keep more small businesses afloat, Cohen said.

The Internet and the services that exist because of it leveled the playing field for everyone. Now a start-up technology-enabled manufacturer or retailer anywhere in the world can survive for longer than its traditional brick-and-mortar offline counterparts down the street, Cohen claims.

“Specifically, our research demonstrates that engaging in global, technology-enabled commerce practically doubles the chance that a small business in the developing world will complete its first year,” Cohen said.

eBay’s data is based on commercial sellers with annual sales of $10,000 or more in 2012.

Traditional local businesses in developing markets have a survival rate of 30 percent to 50 percent after their first year, Cohen said. But when they have access to technology-
enabled commerce, that number rises to between 60 percent to 80 percent.

This is due to the expanded opportunities for businesses to reach customers in more markets, which helps drive increased revenue opportunity.

Across the eight countries eBay analyzed, the average number of international markets that technology-enabled businesses reach is around 30 to 40. Electronic payment methods, mobile technology and broadband Internet access are enabling more small businesses to start and expand their customer bases while simultaneously serving local markets, Cohen said.

Technology-enabled commerce is helping to provide economic opportunity for small businesses and entrepreneurs by connecting them to customers anytime, anyplace, not
just in their city, region or country.

There’s also a strong appetite for foreign and global goods, especially in developed markets, Cohen added.

A PayPal/Nielsen report earlier this year found that 90 million cross-border shoppers in six key markets — the U.S., the U.K., Germany, Australia, China and Brazil — will spend more than $100 billion on overseas websites in 2013.

By 2018, this will increase almost 200 percent to more than $300 billion.

“There is a tremendous opportunity for small businesses and entrepreneurs across the world — and especially in emerging regions — to tap into this demand,” Cohen said. “But we all have a part in realizing and cultivating a more enabling, inclusive and participatory future, and global Internet and trade policies play a crucial role.

He calls for removing barriers in the areas of customs, shipping, intermediary liability and electronic payments that he said threaten to hamper continued growth
of technology-enabled trade.

“We can all be responsible for bringing the full power of technology to small businesses and local communities around the world, so that even more stories like Jean-Louis
Beek’s can be told,” Cohen said.