We like to think we can foretell developments in the industries we study. I can recall meeting a Jio operative at Abu Saeed Khan’s home in Dhaka before they launched and chatting about what was to come. We all agreed that Reliance would disrupt the market. All I could come up with was that voice would most likely be free, or very cheap. That was nothing very insightful, because that was where the technology was at that time.
LIRNEasia has been studying food supply chains almost from inception. Our then Consultant Lead Economist Harsha de Silva had been trying to fix problems in the Dambulla DEC, the country’s largest agri wholesale market from even before that. So we were understandably unhappy when the government shut down the wholesale markets in the context of the COVID-19 response. First thoughts were in this op ed. Given the difficulties many potential users have had in understanding the difficulties of scaling up the customer facing side of e commerce it should come as no surprise that there is even greater ignorance about the far end of the supply chains.
Sri Lanka performs poorly on digital indicators, awareness of internet and related services does not translate to use, and the majority of social media users in Sri Lanka think that blocking social media during times of national unrest "is the right thing to do".
It is reported that momentum is building for rules for e commerce under the WTO. India is both a hotbed of e commerce developments (Walmart has just gained majority control of Flipkart) and a heavyweight in international trade negotiations. Its role in scuttling the Doha Round is still remembered. But India is said to lack adequate knowledge to formulate positions on e commerce, except for one blatantly protectionist issue and one that poses significant challenges to implement: Consider, for instance, one key demand by developed countries to make permanent the current ban on customs duties on ‘global electronic transactions’ that were suspended in 1998. On the face of it, this is a reasonable ask: if the ban is overturned, it would give countries the right to impose tariffs on downloads of mobile applications, streamed music from Spotify or videos from Netflix.
In the course of our policy work related to big data, we discussed first-degree price discrimination: At a more abstract level, the problem is one of first-degree price discrimination. First-degree price discrimination, or person-specific pricing, has not been practiced or observed because it was not possible to discern reservation values. This constraint may be in the process of being overcome now that capabilities exist to analyze individual behavior as recorded in multiple transaction-generated data sets (Shiller, 2014). Big data and electronic commerce have reduced the costs of targeting and first-degree price discrimination. It is argued that the increased availability of behavioral data may encourage a shift from third-degree price discrimination towards personalized pricing (Executive Office of the President of the United States, 2015).
UNCTAD (UN Commission on Trade and Development) is increasingly creating interesting spaces for discussing the digital economy. Their first meeting of the Intergovernmental Group of Experts was convened 4-6 October 2017 in Geneva. Our CEO Helani Galpaya was invited to speak on the specific challenges faced by developing countries in attempting to measure eCommerce activities. The meeting coincided with the 2017 Information Economy Report, the annual publication by UNCTAD, which this year had the theme of “Digitisation, Trade and Development”. Helani’s talk also mentioned the upcoming nationally representative surveys in 17 global south countries (including 6 in Asia) as being a good source of data on ICT use by households and individuals as well as (in Africa) informal enterprises.
The Canada-US Free Trade Agreement, the precursor to the NAFTA, was the first enforceable trade agreement to cover services. It’s always easier to negotiate with a few parties, than with many, especially when breaking new ground. But in this proposal to introduce new binding commitments in a tripartite agreement, they are proposing to take a chapter from a large plurilateral agreement and use it in a trilateral agreement. The NAFTA Parties could negotiate a new NAFTA Chapter on Digital Trade, using the Trans-Pacific Partnership e-commerce chapter as a starting point. Such provisions, which would be used in subsequent free trade agreements involving the NAFTA Parties, would provide an important counterweight to countries that are imposing unjustified restrictions on data flows; requiring that data storage be localized or that source code or other intellectual property be shared with local partners as a condition of doing business; restricting access to online content, which is creating a balkanized Internet; and undermining the private sector’s role in developing and maintaining a free and open Internet.
Our intention was to introduce the Digital Dividends report of the World Bank and disseminate related research conducted by LIRNEasia. We made the headlines in two newspapers but the focus was the controversy around excessive taxes more than on the research. But I was happy there was at least one quotation that referred to the Systematic Review research. “Airbnb has been in Sri Lanka and they have been in discussion with the Government about collecting taxes and giving it to the Government. Now that is a model that can work, but the centralised platform where everybody will have to go to some kind of .
According to the Daily Mirror, the Finance Minister has said ““They (e-commerce operators) are just operating here. Where is the regulation for that? We will make them bring money earned here back to the country.” He appears to be responding to non-e commerce businesses who are complaining as below. Meanwhile during the 9th Ease of Doing Business Forum the Rent-A-Car Association representative Milinda Mallawarachchi called for e-commerce regulations.
One of the most critical steps in an inquiry on anti-competitive practices or a merger/acquisition is the definition of the relevant market. For example, did the relevant market for a newspaper merger include radio and TV stations? In the 1950s, Dupont was ruled to be non-dominant in the relevant market which was defined as wrapping material, not clear, waterproof cellophane. Just based on that the government case collapsed. In the case below, the government lawyers wanted to define the relevant market narrowly to stop a merger.
So Amazon is bigger than Walmart. When will Alibaba overtake Walmart? That will be the day, since there’ll be no help from cloud services The surge added another $40 billion or so to Amazon’s market cap. That will almost assuredly propel it to be more valuable than Walmart for the first time when the stock market opens Friday, making this a deeply symbolic moment for e-commerce and the Internet. It is also a nice present for Amazon, which celebrated its 20th birthday last week.
When talking about the preconditions for the success of the Internet, I have talked about the need to develop an an ecosystem, with trust as one element. These issues were also explored in the work on e commerce. The Chinese solution to the problem of trust in virtual transactions is quite interesting. Almost makes one wish we had enough time to monitor Chinese developments in Chinese. The ubiquity of counterfeits points to a serious problem in China today: an absence of good faith.
In our work on mobile more than voice services in 2008-10, we pointed to the need for delivery services, if e commerce was to catch in emerging Asia. Google is offering to close the gap, for consumers and retailers in the US. Who will close the gap in Asia? In another foray into commerce, Google is working on a delivery service that would let people order items from local stores on the Web and receive them at their homes or offices within a day. The service is in an early testing phase, and it was described by three people briefed on the project who were not authorized to speak about it publicly before it was announced.
It’s not only in developing countries that getting organizations and people to change behaviors to accommodate e gov and e commerce is a problem. Consumers who still pay bills via snail mail. Hospitals leery of making treatment records available online to their patients. Some state motor vehicle registries that require car owners to appear in person — or to mail back license plates — in order to transfer vehicle ownership. But the White House is out to fight cyberphobia with an initiative intended to bolster confidence in e-commerce.
In the recent special issue of Information Technology and International Development, Ayesha Zainudeen et al. identified the non-ICT barriers to the spread of e commerce in developing countries, including payment mechanisms when credit cards did not exist and the bad state of the postal services. The NYT has a fascinating story about how Indian entrepreneurs are combining cheap and plentiful labor and ICTs, to develop workaround solutions. Several months ago, when Prabhu Kumar could not find a book he wanted in bookstores here, he found it online at Amazon.com for $10.
In the 13 years I lived in the US, I saw the postal service change. It was a horrible, rude bureaucracy when I moved there; and I saw the reengineering at work in the last few years. Counter staff were actually trained to smile and be nice to customers (and those who could not be converted, were sent to back offices where they could “go postal”). You stood in a line, staff would come up to the line with handheld devices to serve customers with minor needs such as a sheet of stamps, shortening the line for people with complex problems that had to be dealt with at the counter. They started selling wrapping paper and tape and creating spaces for people to wrap gifts according to USPS rules.