1 INTRODUCTION
Information and communication technologies (ICTs) have the potential to make vast amounts of
information available to users located in various parts of the world and to facilitate rapid communication
between them. One application of these technologies is in the development of ‘e-commerce’ to support
electronic trading. E-commerce can be defined as any form of economic activity conducted over
computer-mediated networks. The potential of e-commerce caught public’s attention as a result of
ventures such as the electronic bookshop, Amazon.com, and the growing number of other Internet-based
retailers in the business-to-consumer (B2C) e-commerce area. However, business-to-business (B2B) ecommerce is growing much more quickly than B2C forms of electronic trading.
This study is part of a larger project that is investigating the impact of B2B e-commerce on access to
global markets for developing country producers in South Africa, Bangladesh and Kenya.1 The main aim
of project is to build up an empirical basis for examining whether B2B e-commerce enables firms in
developing countries to overcome the problems they face in trading on the international market. There
have been many claims that B2B e-commerce offers a radically new means of enabling producers and
buyers to trade with each other regardless of where they are located geographically (Panagariya 2000;
United Nations 2000; Xie 2000). B2B e-commerce is being promoted as a means of enabling producers
in developing countries to become more integrated within the global economy on economic terms that are
favourable for them. Reductions in transaction costs accompanying B2B e-commerce implementations
often using the public Internet are expected to facilitate more efficient international trade. The new
Internet-based trading platforms are expected to make it easier for producer firms to find buyers for their
products and to complete their sales (Benjamin and Wigand 1995; Leebaert 1998; Malone and Laubacher
1998; Malone et al. 1987). There is also an expectation that producer firms based in developing countries
will develop direct one-to-one trading relationships with their upstream and downstream trading partners,
bypassing traditional intermediaries and potentially enabling them to relocate within traditional sector
value chains. The principal barrier to achieving the potential benefits of B2B e-commerce is often
regarded as insufficient investment in the telecommunication infrastructure and the high costs of
connectivity when a network is available.
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The larger study, E-Commerce for Developing Countries: Building an Evidence Base for Impact Assessment’ is funded by the
Department for International Development in the UK as part of the Globalisation and Poverty Programme and is led by the
London School of Economics and Political Science (Media@lse) and the Institute of Development Studies, at the University of
Sussex. The homepage of the E-commerce project is http://www.gapresearch.org/production/ecommercemore.html .
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