E-COMMERCE

Summary

Ecuadorian businesses have taken steps to prepare for widespread e-commerce yet the country’s necessary infrastructure still remains woefully deficient. Currently, only a handful of sites have the ability to conduct web transactions. At most sites, one must view items on-line and then contact the company via telephone or some other means. However, the e-commerce scene is rapidly changing. In November 2000, Shigras, www.shigras.com, began offering web-based, auction-type transactions to its registered users. Shigras has partnered with a Latin regional e-commerce platform Mercado Libre. In addition, the site offers Verisign security. A new B2B portal will offer transactions in March, 2001. Many expect the country’s major portals to follow suit quickly. The country’s ability to capitalize on e-commerce depends on several interrelated factors; a discussion of Ecuador’s efforts to meet these challenges is provided below. 

 

E-Readiness

A country’s successful emergence into the electronic commerce environment can be based on its “E-Readiness” attribute rating. First, a country must address the connectivity level, the overall availability and reliability of the nation’s internal telecommunication infrastructure. Wireless communications services, community access centers, affordable and reliable telephone systems and a fluid market for ease of import and export of products and services must all be present. Second, a country must possess strong leadership skills that can address the potential tumultuous relationship between government and industry when promoting an “e-friendly” environment.

The government needs to assume a proactive role in forging telecommunication strategies and policies, otherwise the development and expansion of e-commerce will be severely hindered. Third, and one of the most important elements, is the issue of Information Security. The protection of intellectual property is essential to the development and promotion of e-commerce. An inadequate legal structure stifles the flow and exchange of information. Fourth, a profitable e-commerce enterprise will possess highly skilled managers with knowledge niches that expand beyond information technology and telecommunications, to encompass business practices, negotiation skills and cross-cultural management techniques. Finally, the environment must be ready for e-commerce to flourish. All of the key players involved must be open to new ideas, communication, and possess the ability to conduct transactions over wireless networks.

Ecuador, although flourishing in some areas, such as privatization of telecommunications industry, establishment of telecommunication and Internet legislations and software development, is still lagging behind in some of the more essential elements needed to participate in the e-commerce market on both a domestic and international level. In August-2000, research was conducted and a report issued by McConnell International in conjunction with WITSA titled “Risk E-Business: Seizing the Opportunity of Global E-Readiness.” This report analyzed Ecuador’s “E-Readiness” factor and found them to be deficient in the five key areas considered essential to the successful promotion of e-commerce. Ecuador scored in the red (lowest possible rating) for the following areas: Connectivity, E-Leadership, Information Security, Human Capital and E-Business Climate.  This research strongly suggests that Ecuador needs to make vast improvements in the above-mentioned areas before being capable of participating in the global E-Market. The following is a list of questions used in the report to gauge Ecuador’s “E-Readiness.”

 

McConnell International, “Risk E-Business: Seizing the Opportunity of Global E-Readiness.”   August 2000.

 

E-Commerce Policy Framework

Despite the McConnell report’s bleak outlook, the government has taken steps toward improvement. According to the report Summary of E-Commerce Legislation: Ecuador from McBride, Baker & Coles, http://www.mbc.com/admin/siteinfo.asp, a bill has been introduced to the legislature entitled: Law Governing Electronic Commerce, Electronic Signatures, and Data Messages. This law, if passed, governs the validity and enforceability of electronic signatures, and data messages. The Bill provides:

·     "The electronic signature shall have equivalent validity, and shall be recognized to have the same legal effects, as a handwritten signature. It must meet the requirements determined by this law, be in accordance with the body of Equatorian law, and comply with all regulations that may be established to this effect."

·     "An individual or a legal entity that is legally competent to issue certificates of identity and provide services related to electronic commerce and signatures, and for which purpose it is able to comply with requirements set by law and regulations by means of the necessary physical and logical tools compatible with the type of service to be offered."

 

B2B, B2C, B2G

B2B Ecuador

The portal B2BEcuador (www.b2becuador.net) will begin online transactions in March 2001, as part of a plan to establish an integrated marketplace for importers and exporters. The site is still deciding whether to opt for Oracle or IBM to develop its e-commerce platform. Meanwhile it will focus on promoting the portal, and has already built up a significant client base in Europe. Banners are placed with international search engine Altavista. B2BEcuador showcases a catalog of products, and allows user to request quotes from the site's network of clients. In the future it will offer a shopping cart service for online purchases. The portal launched in mid-August with a US$100,000 investment from its founders. Alliance negotiations are underway with banks and shipping, customs and certifying companies.

The marketplace consists of eleven trading communities for those interested in conducted trade and business with vendors, small and large, over the Internet. The vertical trade communities act as industry specific and extensive sources of information, interaction and e-commerce. The vertical trade communities consist of:             

Each vertical trade group concentrates on one sector and caters to individuals with comparable professional interests.

 

ECeurope.com(tm)

Electronic Commerce Europe (http://www.eceurope.com) was established on 20th October 1999 as a global business-to-business eMarketplace. This company functions as a "Trade Bulletin Board System" (BBS) - a virtual business dating agency.

Eceurope plays matchmaker between the global sellers and buyers and focuses primarily on small-to-medium sized businesses that want to create new trade relationships via the Internet. Trade BBS permits these small-to-medium size businesses to 'post', 'search', 'view,' and 'respond', to B2B trade messages (digital business ads) for any of the vertical trading communities.  However, currently, no transactions are conducted online. Companies must contact one another offline to make actual payments and conduct other transaction activities.

Florastream

Florastream.com (http://www.florastream.com/) is a free service for serious flower industry buyers and sellers. Similar to a stock exchange, Florastream is the ultimate way to find new trading partners and streamline your business in an integrated online transaction, logistics, and payment engine - Headquartered in Quito, Ecuador.

   

Ecuafacs

Ecuafacs (www.ecuafacs.hypermart.net) started its business of web design in 1998 in Quito, Ecuador. Since then Ecu@Facs has posted numerous industry and tourism business sites for the Ecuador business community. Ecuafacs is an international web developer and negotiates business worldwide.

 

Latinsecure 

Ecuador's leading e-commerce solution provider. (http://www.latinsecure.com/)

 

 

This report was completed in December 2000 for the class Impacts of National Information Technology Environments on Business given by Professor Erran Carmel in the program of Management of Global Information Technology at the Kogod School of Business in Washington DC