E-businesses are mushrooming in Lebanon. From
Elmazad to SoukLebanon, everything from
microwaves to CDs to medical chairs are being sold
over the Internet. But e-commerce is still in its embryonic stage.
Only 2% of the population is online. E-commerce sales are estimated
to be around $20 million, most of which is business to
business. But e-commerce is more than just buying goods at the
click of a mouse. It is changing the way we live, work and do
business. The sooner we unlock its power, the faster we can reap
the benefits.
E-commerce reduces the price of goods and service. In our
physical world, goods move from manufacturers to wholesalers
to distributors and finally to consumers. E-commerce gives consumers
the opportunity to buy goods straight from the manufacturer,
avoiding the markups charged by intermediaries.
Consumers are the winners. With the Internet, they are armed with more options
and information to find lower prices.
E-commerce provides consumers with
customized goods and services. In our physical
world, suppliers produce product lines
that they believe will appeal to buyers and
buyers make do with what they are offered.
Thanks to e-commerce, customers can
design their own products by selecting from
a menu of attributes, components, prices
and delivery options. With this power, companies can secure the loyalty of their customers like never
before. More importantly, with each transaction, a company
becomes more aware of the customer’s wants and needs.
Hence it is better able to anticipate and fulfill them.
E-commerce also gives people access to the global marketplace.
Businesses are no longer restricted to geographic locations.
In Sri Lanka, businesses have capitalized on this by creating
Cybertrader – an electronic e-mall for traditional and nontraditional
exports. This service groups the products of small
businesses together, increasing the chances that a buyer will find
what he needs.
But the government must foster an environment that
encourages the use of the Internet. It must ensure that the
telecommunications infrastructure is high quality, reasonably
priced and up-to-date. Since the end of the civil war, the government
has rehabilitated and expanded its telephone network.
Today there are more than 976,000 phone lines. The number
of Internet service providers (ISPs) has increased from two
in 1996 to 15 in 2000. Intense competition has brought monthly connection fees down from $250 in 1996 to $10 today.
But there are still only 84,000 Internet users in Lebanon.
Access must be increased and prices must decline further. In
order to maintain and improve technology, it may be best to privatize
telecommunications. A strategy for this has been prepared
but will not be addressed until a new government is
formed. Beyond privatization, the government must build
Internet access capabilities. The governments of Malaysia and
the UAE are financing business incubators and constructing
technology investment parks. South Korea’s Cyber Korea 21
Project will create a countrywide high-speed network by
2001 so that anyone, anywhere can receive multimedia services.
At the same time, the financial sector must be able to handle
online transactions, by providing easy-to-use payment tools that
permit the rapid transfer of electronic funds across borders. The security and authentication of those funds
must also be ensured. Lebanon’s dynamic
banking sector should have little trouble
meeting this challenge. But bottlenecks
remain. Although credit and debit cards
are spreading, people are reluctant to make
purchases over the net because they fear
fraud and abuse.
An efficient distribution and delivery system
must also be assured. Without this, all the benefits
of e-commerce will erode. These include transportation, customs and postal
infrastructure. Lebanon’s record has been dismal in this regard.
Transportation into Lebanon is relatively expensive. LibanPost,
which took charge of the postal services two years ago, is suffering
from a number of problems including excessive bureaucracy.
More recently, it was forced to re-negotiate its contract with the
government. Long delays and exorbitant costs plague the customs
authorities. Despite reforms, it still takes up to 17 days for an
importer to clear goods. It takes seven days to export goods. For
each container entering or leaving the country, bribes and baksheesh
represent between $350 and $450 in extra costs. There are
49 agencies that can effectively prohibit or restrict imports and
exports. Add to this the costs incurred from trade professionals,
customs brokers and shipping agents, all of whom have an
interest in keeping the current compl~xities in place.
E-commerce is here to stay. Its benefits are immense. We need
to get everyone connected to the Internet and use it to its full potential,
not simply for sending emails and browsing websites.
