Developing countries missing $22T e-commerce opportunity

Developing countries should grasp the rapidly growing opportunity of electronic commerce, worth around $22.1 trillion in 2015, up 38% from 2013, or risk falling quickly behind, UNCTAD said at the launch of a new e-commerce initiative. The new initiative, called eTrade for All, brings international organisations, donors and businesses under one umbrella, easing developing country access to cutting-edge technical assistance and giving donors more options for funding. By providing new opportunities and new markets, online commerce can help generate economic opportunities, including jobs.

But while more than 70% of people are shopping online in Denmark, Luxembourg and the United Kingdom, the story is different in most developing countries. In Bangladesh, Ghana and Indonesia, for example, just 2% or less of the population buy online.

“A huge divide is opening between countries that are exploiting those opportunities and those that are not,” UNCTAD Secretary General Mukhisa Kituyi said, ahead of the initiative’s launch at UNCTAD 14.

E-commerce includes both business-to-business and business-to-consumer, respectively valued at around $19.9 trillion and $2.2 trillion each, according to the new UNCTAD data. This trade is mostly domestic, but is becoming more and more international.

The new UNCTAD data show that e-commerce is growing rapidly, with emerging economies accounting for most of this growth. China is now the world’s largest B2C e-commerce market, both in terms of sales and in number of online shoppers. Brazil, India, Republic of Korea and Russian Federation have also all moved into the top 10 e-commerce markets.

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“I am delighted by this collaboration with our partners, which finally gives the global community an effective platform for helping developing countries access and benefit from e-commerce,” Dr Kituyi added.

With strong involvement by the private sector – through a new Private Sector Advisory Council – and with financial contributions from the Governments of the United Kingdom of Great Britain and Northern Ireland, Sweden, Finland and the Republic of Korea, the eTrade for All initiative will support developing countries which express an interest in boosting their online commerce.

The initiative will help developing countries in seven policy areas, including e-commerce assessments, information and communications technology infrastructure, payments, trade logistics, legal and regulatory frameworks, skills development and financing for e-commerce. In this way, the initiative will also support the December 2015 call by the United Nations General Assembly to better use information and communication technology to facilitate achievement of the Sustainable Development Goals.

Separately, Sweden said it would contribute to the UNCTAD Trust Fund for Capacity building in Investment for Development through a multi-year contribution amounting to approximately $1.8 million.

The announcement was made by Erik Bromander, State Secretary of Sweden – a long-standing partner of UNCTAD in the area of investment – at the Global Leaders’ Investment Forum on the sidelines of the 2016 World Investment Forum.

The flexibility of the trust fund allows UNCTAD to carry out cutting-edge research, organise ahead-of-the-curve events, and respond quickly to the most urgent needs of beneficiary countries, while maintaining full accountability for results and impact. The Trust Fund for Capacity-Building in Investment was UNCTAD’s first multi-donor umbrella trust fund. It is dedicated to the full range of research, consensus-building and technical assistance activities carried out by UNCTAD in the area of investment.