These arguments have been met with skepticism in some quarters. Paré (2001), for example, argues that
the application of, and access to, technologies such as the public Internet and the World Wide Web are
unlikely to reduce transaction costs sufficiently to reduce the barriers to the entry into global markets by
firms in developing countries. Humphrey (2002) underscores the complexity of the transaction cost
issues by showing how different value chains have different transactional patterns and that firms face a
variety of challenges within these chains.
These contrasting positions are difficult to reconcile because there has been very little empirical
investigation into the operation of e-commerce in developing country settings. In an important study,
Moodley (2002) found that in South Africa, B2B e-commerce has yet to come into its own. Rather
businesses see it as an extra investment cost with very uncertain returns. Firms mainly to supplement
other information and communication systems and trading procedures were using Internet platforms.
More generally, the public Internet and e-mail were regarded as a means of supporting existing trade
relationships, rather than as an entirely new way of doing business.
This study contributes to the debate about the impact of B2B e-commerce on firms in developing
countries by examining its use in the garment industry in Kenya. The study provides a basis for assessing
the extent of adoption and the perceptions of the impact of B2B e-commerce in Kenya on firms that are
trading in global markets. In this exploratory empirical study, we particularly examined the firms’ and
key informants’ views with respect to the following questions:
1. To what extent do Kenya’s garment producers need additional information about existing or
potential customers and or suppliers?
2.
To what extent do garment producers already use data communication networks?
3. To what extent is the poor ICT infrastructure a barrier to effective use of data communication
in accessing supply or product markets?
4. To what extent do weaknesses in the institutional infrastructure (laws, policies, financial
system) constitute barriers to effective access to supply or product markets?
5. To what extent do Kenyan garment producers deal with distant customers and suppliers?
6. Does the present use of any form of Internet enabled B2B e-commerce reduces firms’
transaction costs?
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