Tag: State

The State of E-Commerce in the Developing Nations

The use of the Internet is growing at a high speed worldwide. According to the Internet world stats website the worldwide penetration rates of the Internet is 25.6% in 2009. Under developed nations of Africa, Asia and Latin America are also showing high growth rates in Internet usage. Between the year 2000-2009, Africa shows 1,392.4 %, while Asia and Latin America show 545.9% and 890.8% growth rates respectively.

This fast growth rate in Internet usage in the developing countries affects their international trade situation highly. Nations such as India and China are now becoming among the major participants in this global business environment. They increased their competitiveness highly. Other developing nations from Africa and Latin America are also showing advancements too.

As a result of this high growth in Internet usage and penetration in E-commerce, the above nations are showing high progresses and advancements in their economies. Their products and services are now reaching long distances around the world. Other developing countries also have to take lessons from these model nations. If they can give enough attention to the industry and can do the desired tasks, they can see the economic transitions that the above model nations are able to see.

Thus, in order to see those results first of all each and every developing country needs to know and believe that E-commerce is now becoming an obligation to compete in the global business environment. Globalization is making our world a small village and highly simplifying business activities. Today entering to the global business network is a very simple task as people from one corner of the world is now reaching people in the opposite corner of the world just from their bedrooms. In addition, individuals, companies and nations as a whole are getting tremendous financial benefits and raising their competitiveness in the global market.

If developing nations want to grow their economies, entering and competing to the international business is mandatory. And doing business electronically (E-commerce) is now the technology level that business environment today reaches. Therefore, these nations need to put the advancement of Information and Communication Technologies and E-commerce among their priorities. This asks the collaboration of all concerned bodies, professionals, government bodies, law and policy makers, banks and the society as a whole.

Uber Ordered to Shut Down in India! State Socialism in Action

In a baffling move by the Indian government, Uber, the taxi sharing application which has become a global craze, was ordered to be completely shut down in the country by the 31st of October 2014. While the country is in dire need to attract as much foreign investment as possible, the government is resorting to its decades of socialist policies, making India even more unattractive for international businesses.

Uber is a heavily funded start up company which offers anyone a chance to become a taxi driver and give rides to customers through an easy payment system. The website has revolutionized the taxi business in many parts of the world where people have found the system to be part car-share part money saver.

It has no doubt served as a controversial company which has seen large scale protests from traditional taxi companies and businesses in places such as London, Paris and even San Francisco. When a union of taxi drivers in London tried to ban the website/application, the government refused lest it makes the city look unfriendly towards international businesses. A smart move from a smart city.

Despite all the controversy the company still grew strong with reportedly strong backing from Google and Fidelity ventures. It entered the growing Indian Market soon and grew throughout the urban areas of the huge country. However, like everywhere else, the Taxi drivers were not too happy. In a country with the largest number of poor people on earth and with a high birth rate/low skilled labour class, driving cars, buses, vans and rickshaws is seen as a lifeline by millions of the uneducated. After expanding to over 10 highly populated cities of India and cutting prices by 25% even large and established cab companies and car rentals started to take notice of Uber.

These companies have now taken extreme measures of blocking Uber from operating in India. Complaints were made to the Reserve Bank of India accusing Uber of violating the country’s strict foreign exchange laws due to their payment system.

In a classic move reminiscent of India’s socialist past, the bank has now given Uber till October to shut down! This would prove to be a disastrous move from the central bank at a time when India requires as much investment as possible. A similar case earlier this year made many global retailers rethink about their strategy in India when they understood that the government is following populist/socialist policies in order to gain rural voters.

Time is still with India and the government should rethink its strategy on international companies. International companies only bring in technology, money and new business methods into a country and forces local companies to play catch up and improve their game. Uber would not have ‘destroyed’ India’s taxi drivers but would have forced them to reduce prices and introduce more services which all add up to customer advantages and economic growth.

It would be interesting to see how the Modi government deals with such issues in the next 5 years.

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