In the emerging planetary economic system, integrating of information and communicating engineering in concern is now going inevitable. E-commerce and e-business is going a necessary constituent of concern scheme. Use of IT in concern has enhanced productiveness, enable mass customization, contribute a batch in cost decrease and promote greater client engagement and encouragement concern. E-commerce poses an advantage of cut downing clip to seek for information and cut down dealing costs i.e. clip for payment is drastically reduced as one can make dealing across continent in a really short clip. Search of clients and markets is now can be easy facilitated by cyberspace. Internet allows automatic packaging and distributes information to stipulate mark group. Internet development and web-based engineerings bit by bit narrow down differentiations between traditional markets and planetary electronic market topographic point. The ability of companies to happen out the emerging concern chances and use or portion the resources available is possible through cyberspace. Companies can do most of chances through E-commerce scheme ; it is feasible, operable and simple within the context of planetary information. With its consequence of levelling the playing land, e-commerce is tied with the appropriate scheme and policy attack that enables Small and Medium graduated table Enterprises ( SMEs ) to vie with big and capital-rich concerns.

On another manus, developing states are given increased entree to the planetary market place, where they compete with and complement the more developed economic systems. Most, if non all, developing states are already take parting in e-commerce, either as Sellerss or purchasers. However, to ease e-commerce growing in these states, the comparatively developing information substructure must be improved.

In this essay we will see the impacts of ecommerce on touristry sectors analyzing the benefits of deploying ecommerce in little and average size Tourism enterprises measuring chances developing states might catch if manage to take part full in planetary market through the cyberspace such as increase merchandise public presentation and productiveness as consequence of decrease on operational costs.


What is e-commerce: significance and range of e-commerce

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It is of import to specify this term in first topographic point. Different writers have defined e-commerce in different ways doing it hard to hold the globally recognized definition.

Many writers defined e-commerce merely as purchasing and merchandising over the cyberspace which raised different statements. Kalakota and Whinston ( 1997 ) agued that e-commerce involves more than electronically mediated fiscal minutess between administrations and clients. They refer e-commerce to the undermentioned positions:

A communicating position

The bringing of information, products/services or payment by electronic agencies

A concern position

The application of engineering towards the mechanization of concern dealing and work flows

A service position

Enabling cost film editing at the same clip increasing spend and quality of service bringing.

An on-line position

Buying and merchandising of merchandises and information online.

A pan African E-commerce enterprise, sponsored by Economic Commission for Africa ( EAC ) and the International Development Research Centre ( IDCR ) , in 2001 adopted the European Commission definition ;

“ Electronic commercialism is about making concern electronically, it is based on the processing and transmittal of informations, including text, sound and picture. It encompasses many diverse activities including electronic trading of goods and service activities online bringing of digital content, electronic fund transportation, electronic portion trading, electronic measures of cargo, commercial auctions, online sourcing, public procurance, direct consumer selling and after-sales service ” . ( United Nations Economic Commission for Africa, 2006 )

this definition is wide and it covers the range of e-commerce to the state every bit good as industry. For the intent of this essay we will follow this definition.

It is seen that about each definition has similar constituents for illustration e-commerce is digitally enabled that means is taken through digital engineerings such as cyberspace. Besides it is a commercial dealing which means there is an exchange of value. Laudon and Traver, 2007 commented that “ without an exchange of value no commercialism occurs ”


E-commerce minutess can be categorized in different categories sing on the nature of the market relationship, that is who is selling to whom

2.1.1 Business-to Consumer ( B2C )

This sale takes topographic point when the business/organization sells its products/services straight to the consumer. Most consumers are likely to utilize this type of e-commerce. In 2005, “ consumers spent about $ 142- $ 172 billion ” . ( Laudon and Traver, 2007 pp50 )

2.1.2 Business-to- Business ( B2B )

This is an on-line dealing between concerns, which means concerns concentrate on selling to other concerns. This is the largest signifier of e-commerce in footings of turnover about 80 % of ecommerce is of this type. ( Roberto R. Romulo Shahid Akhtar, Barlett, 200 ; Laudon and Traver, 2002 ; UNCARD, 2002 )

2.1.3 Consumer-to-Consumer ( C2C )

This is happen when consumers transact straight with other consumers. This signifier has great possible but it is less widely used ( Chaffey, D. 2004 pp7 ) Hoffman and Novak suggested that is important for companies to take into consideration the C2C interactions.

2.1.4 Consumer-to-Business ( C2B )

This is defined as the dealing appeared when consumers initiate trading with companies. ( Chaffey, D. 2004 pp7 )

2.1.5 Mobile Commerce ( M-Commerce )

This is defined as the usage of wireless digital devices to enable minutess on the web. These webs are used to link cell phones, handled devices such as Blackberries, and personal computing machines to the web. ( Laudon and Traver, 2007 pp18 )

2.2 Development COUNTRIES

Developing states differ widely among themselves these yearss, and no individual list of “ typical ” characteristics would accurately depict all developing countries.The following characteristics separate them from developed states ; factors of production in most of the development states are hapless since they lack plenty skilled labour, high rate of rising prices High rate of population, they lag behind modern engineering, no adequate capital due to poverty all this contribute to low productiveness and inefficient in footings of quality and measure as a consequence states can non bring forth in majority to bask economic systems of graduated table which developed counties are basking. ( Krugman and Obstfeld, 2006 pp 606 ) .


This analysis focuses on SMEs because of its function in economic development in most of developing states. It acts as the anchor of their economic system because most of its people are prosecuting in informal sector including touristry.

Harmonizing to Scarborough et all in their book effectual little concern direction there is no cosmopolitan definition of SMEs. Some analysts and states define it on their own.The normally base on figure of employees or on gross revenues volumes. They define a little concern is the one which employs fewer than 100 people ( Scarborough et all 2008 ; OECD 2004 ) While the South African Act gave their estimation to be between 100 and 200 individuals or a turnover rate of 5 million Rand, while micro endeavors have up to 5 employees ( Gorden, 2003 ) ; ( Fred Tetteh Alarti-Amoako, 25/09/2008 ) Tourism considers the same standards to be regarded as small/medium in different states.


SMEs play a cardinal function in the state ‘s economical growing in most of the developing states it is a beginning of:



Tax gross

Job creation-growth

-job creative activity

For case in Ghana the analyst says that SMEs histories for approximately 90 % in the economic system which contributes about 60 % to the state ‘s GDP. Harmonizing to Mr. Baffour Awuah the Regional Minister ( Ghana ) , the informal sector is the mechanism for the economic growing of the state because it is identified as a major beginning of income and employment. Fred Tetteh Alarti-Amoako, ( 2008 )

Harmonizing to NASSCOM ( National Association of Software and Services Companies ) study there are about 3.4 million SMEs which accounts for 42 % of fabrication sectors turnover and 35 % state ‘s exports. These SMEs employ over 17 million people.

The above analysis shows the ground why it is of import to concentrate on SMEs in DCs. Adaptation of ecommerce would assist the touristry sector to construct competitory advantage in the universe touristry market and undertake the globalization force per unit areas in DCs.


The followers are the major forces that drive the developing states to promote the development of ecommerce in its sectors.


States are now in the procedure of altering their policies such public authorization which reduces the power of the authorities to have and command the agencies of economic system in order to construct the good environment for foreign/local investings and new engineering version. Conducive environment includes things like wellness services, H2O supply, power supply and security systems need to be in good status. New engineerings change the usual manner of concern operations in which states and sectors need to follow in order to last because competition became more tense compared to traditional manner of concern operation.E-commerce make the universe to look like a small town giving equal opportunity to every one to sell and purchase from any portion of the universe giving chance for SMTES from DCs to beginning from planetary markets. The globalisation of production and trade in goods and services is

associated with increased usage of information engineerings and

transmutation of economic activities Notice that many of the developing states in this illustration have export sectors that are more demanding in their usage of ecommerce

as compared to some of the industrial states.


Globalisation had increased the mutuality and relationships among different parts of the universe.This gives a room for all states to be planetary regardless their degree of economical development.Countries from any portion in the word have got an equal opportunity to take part to the full in International Business in which all commercial minutess including gross revenues, investings, and transit takes topographic point between two or more states ( Daniels et all, 2009, pg 49 ) Globalization put more emphasis to Countries opens the door for concern in free market economic system with an equal opportunity. Ecommerce facilitates concern between states in the lower costs, hence SMTES need to follow e-commerce in production procedure and to transact through the cyberspace in order to take down the operational costs which is so important for endurance in the cyberspace epoch, Eva M. Rathgeber et Al ( 2000 ) reported that an advantage of holding inexpensive labor is non plenty with outgrowth of new ICTs competency in new ICTs is required.

Price sensitiveness ( snap )

Customers are going monetary value sensitive where by they are affected by monetary value alterations in which a little alterations in monetary value causes a large alteration in demand. There for endeavors from DCs need to utilize ICTs to bring forth and sell inexpensive merchandises to win the market because merchandises from Developed states are cheaper as they are utilizing advanced engineerings which enabled them to bring forth and sell in cheap.


Tourism is among the major sectors which are merchandising through the cyberspace and the most wedged sector with the exigency of e-commerce. Here will discourse the extent of its impacts in the sector and its positive effects in touristry and states as a whole.

4.1 Tourism

The World Tourism Organization ( UNWTO ) defines tourers as ”people who travel to and remain in topographic points outside their usual environment for more than 24 ( 24 ) hours and non more than one back-to-back twelvemonth for leisure, concern and other intents non related to the exercising of an activity remunerated from within the topographic point visited. ” ( UNWTO, 2009 )

Tourism is a important sector for small- and medium-scale endeavors ( SMEs ) in the universe and DCs in peculiar, is turning quickly and it contributes much on economic development globally and developing states.

UNWTO prognosiss that ‘there will be over a billion international tourer reachings worldwide in 2010 and 1.6 billion in 2020 ‘ . Application of cyberspace in the sector would assure more benefits since online concern is increasing all over the universe.

Tourism is a cardinal export for DCs and is one of the universe ‘s largest industries bring forthing an estimated 11 % of planetary GDP and bring forthing about 250 million occupations worldwide ( Roe and Urquhart, 2001 ; WTO, 1996 ; Mill & A ; Morrison, 1999 ; Edgell, 1999 ; Lundberg et Al, 1995 ) . ) . DCs are having an increasing figure of tourers, and this represent a important portion of their GDP. The tendency of touristry demand is increasing quickly and is a important beginning of foreign exchange ( WTO, 2002 ) “ touristry has assisted many developing states to travel off from a dependence on agribusiness and fabrication ” ( Tooman, 1997 ) . DCs are range on natural gifts they can profit from great wealth in wildlife and alone resorts, forward case Tanzania has a batch of attractive forces such as Mount Kilimanjaro, the highest mountain in Africa, Serengeti National Park one of the most beautiful Parkss in the universe, and Ngorongoro Crater which is among the 8th admiration of the universe. SMTEs have important consequence on economic development it contributes on the income distribution, revenue enhancement gross, and employment because most people are prosecuting in tourer concern as conveyance agents, auto leases, air hoses, hotels therefore it creates employment. SMTEs contribute much on the attempts of DCs to eliminate poorness and increasing the public assistance of the society as it can be seen in the tabular array below.

Table 1: Economic Importance of Tourism in the three states


Friendly islands


Tourism GDP %

12.80 %

5.00 %

9.50 %

Tourism % Employment

9.50 %

3.20 %

10.00 %

Pacific Visitor Arrivals: 1999-2003





















( South Pacific Tourism Organisation [ SPTO ] , 2003


Most directors would hold that we have late entered a new epoch “ The information Age ; which differs markedly from the industrial age ” ( Hollensen, 2001, pp21, Wyckoff, 1997:5 ) . Industries and sectors are runing in unstable environment conditions. The growing and subsister of modern administrations and touristry sector in peculiar depends on its ability to get by and accommodate to alterations ( creativeness and invention ) .ICT is altering really quickly, increasing the importance of this sector to redesign in order to get by because touristry is the most sector which is largely affected with engineering alterations. The tourer sector which includes travel, conveyance and hotel reserve plays a critical function in increasing the demand for ICT service.This is an ICT-intensive industry in footings of online trade means that it relies on information to stand for and depict merchandises, in world about all information systems in industry are meeting to the Internet ( Buhalis & A ; Diemezi, 2003 ) , harmonizing to UNCTAD it constitutes 38 per cent of all on-line trade ( UNCTAD, 2002a ) .

The coming of the Internet in the late 1990s has had a strong impact on the touristry and cordial reception industry ( Buhalis, 2003 ) . It changed the relationships in supply concatenation. This is clearly seen on the manner concern is now conducted on the net where by companies can now hold a direct contact with the consumer ( B2C ) . Travel agents are replaced by E-tourism. The interaction of touristry and ICTs in a procedure of digitalisation of touristry concern processes has created electronic touristry ( etourism ) as a new field of cognition ( Gratzer, Winiwarter, and Werthner, 2003 )

E-Tourism is a aggregation of tourer services that combine with E-Commerce via Internet sing that E-Tourism constitutes the large part of E-Commerce because it has included all common elements of tourer activities such as hotels, air hoses, travel agents, auto leases, tourer sites, bazars, and tourer ushers. This includes authoritiess which starts using E-Tourism as an effectual agencies to advance the touristry merchandise through the Internet. Recently, Bankss have besides taken their functions as service suppliers of E-Payment, which is an of import component for E-Tourism. A Already, travel is the Internet ‘s largest beginning of business-to-consumer ( B2C ) revenues – it generated $ 52.4 billion in 2004 and is predicted to bring forth some $ 119 billion by 2010, harmonizing to Forrester Research.

The tabular array below shows the impact of ICT on industry ‘s supply concatenation demoing the relationship between stakeholders.

Table 2

Beginning E-commerce and E-Business/E-Commerce in Developing States

From Wiki books.

It is evidently that e-commerce as manner of selling goods online has impacted on the manner organisations do concern by changing basic concern kineticss of industrial economic system to be replaced by digital economic system ( E-tourism ) . It has significantly effects on industry value concatenation it changes the touristry industry construction ( e.g. traditional distribution theoretical account to e-distribution ) . Firms require new organisational designs and direction procedures. Tourism houses were redesigned to follow new engineering. Ecommerce offers an chance to cut down distribution cost through disintermediation for illustration in touristry company use the cyberspace to short-circuit traditional touristry distributers. Ecommerce requires different schemes for telling, advertisement and client support than traditional one ( Chaudhury, Mallick and Rao, 2001 ) . The tabular array below shows how new engineering has changed the concern environment different from the old.

Industry economic system

( Marketplace=physical merchandises )

Manufacturing dominates

Barrier: physical distribution

Barrier: deficiency of capital

First-mover advantage was old ages

Advanced thoughts contained internally

Relationships constrained by homo


Digital economic system

( Market space=e-commerce )

Knowledge and relationships dominate

E-distribution is the new barrier

Capital is a trade good

First-mover advantage is months

Invention is in the populace sphere

Relationships can be established electronically.

( Hollensen, 2001, pp335

Effective usage of ICT, to do minutess through the Internet can increase the degree of economic activity in the touristry sector in DCs. E-tourist markets offer chances for poorness decrease in this states since it would heighten concern public presentation Catherine Collins, Dimitrios Buhalis and Mike Peters.


It is better to understand the tendencies of touristry universe broad so that to understand that the demand of on-line touristry tendencies provide more chances for SMTEs from DCs to glow globally.

The UNCTAD 2001 study indicates that the demand for touristry merchandises and services on the cyberspace is turning. It revels that UK, German and France the Europe ‘s largest economic systems are anticipating to see farther growing in on-line engagements in 2007.Advancement in information engineering assures the addition of touristry market because it reduces barriers such as transit and communicating costs which provide chance of people to go cheaply and comfy. The World Tourism Organization reports the top 10 touristry earners for the twelvemonth 2009. ( See appendix 1 )

Damian Cook, the main executive officer of E-Tourism Frontiers said: “ Online gross revenues have experienced major growing in the past twelvemonth. Travel is now the figure one merchandising trade good online and is bring forthing over US $ 110 billion yearly in gross revenues. We must acquire more African touristry merchandises available to the online travel shopper, particularly following the monolithic involvement in Africa after the World Cup. “ ( by Paz Casal. 2010 )

Beginning: Euromonitor International.

The sector was severely affected by the late-2000s recession ; international travel demand suffered a strong lag beginning in June 2008 with growing in international touristry reachings worldwide falling to 2 % during the boreal summer months.


Companies of all sizes are busy set uping a presence on the web, why this happen because that ‘s where their clients are ( Scarborough, 2008 ) . Besides ecommerce offers different chances and benefits. There is a clear grounds that E-Commerce have positive impact economically ( UNDP, ( 2003 ) , Pohjola ( 2000 ) , Kraemer and Dedrick ( 2000 ) Dewan and Kramer ( 2000 ) , } . E-commerce can do a large part to better the public presentation of SMTEs.

SMTEs can profit from ecommerce if they efficaciously implement and use it in their organizational activities, and the state as a whole. Harmonizing to the undermentioned analysts ( Scarborough et wholly, 2008 pp313-315 ; Chan, 2001: Schneider 2002, UNCTAD, 2001 ) E-commerce can supply the undermentioned chances to the providers of touristry services and the tourers so that to better their services every bit good as their public presentation.

Beginning of information

The biggest influences ecommerce for touristry sector have been the ability of consumers to acquire dependable information at the right clip, the right topographic point, to the right people and at an low-cost monetary value. Ecommerce aid to associate the key stakeholders which includes ; providers, authorities, clients and rivals, it enables them to research, comparison and book online anytime without trusting on a travel agent.

Opportunity to increase grosss

since the clients are on the web, by establishing a web site a SMTE are enabled to increasing its market every bit good as gross revenues. A company is non merely runing locally but globally this is chance for SMTEs to convey foreign currency in their states. This has positive effects on the state ‘s BOP.

Bettering Customer Services

E-commerce is a utile tool for information between stakeholders. In touristry administration can have feedback from tourers and do alterations to follow with the client needs sing services Interactions with clients help to make good relationship and retain the niche clients. Therefore ecommerce offers chances for touristry administration to increase their client base

The opportunity to pull new clients.

The INCARD study 2001 identifies that demand is meaning to increase from $ 5575 for 1999 to $ 1325 as entire international touristry grosss and a planetary touristry demand of $ 8,972 billion as a anticipation for 2010. ( UNCTAD, 2001 ) ecommerce provides a opportunity of touristry houses from DCs to come in into B2C and other ecommerce supply ironss and travel from bricks- and- howitzer to bricks- and -clicks which increases the chance of acquiring new users of the touristry merchandises and services.

Global range

The ability of local touristry companies in DCs to spread out their range into the planetary markets. Internet addition handiness and convenience it removes state boundaries. This paves the manner for SMTEs from states including those from Developing states to transact with 1000000s of possible clients in different parts of the universe. Different research workers approved this “ There are chances for concerns in DCs to derive entree to lager external markets from linkages with concerns runing in these markets ” ( Singh, 1999 ; Wood, 2003 ) . Therefore ecommerce facilitates marketing activities it promotes touristry in a planetary graduated table.


A company with a web site has an ability to stay unfastened 24 hours a twenty-four hours, seven yearss a hebdomad because the Internet is non bound to clip compared to brick -and- motor companies, this addition convenience to clients as they can shop online anyplace at anytime without a demand to go. Unlike traditional touristry E-tourism addition convenience and handiness to clients as they can merely snap and acquire information about touristic attractive forces all over the universe and book for hotel while remaining at place at any clip He/She wishes to.

Decrease of costs

Surveies indicate that e-commerce can assist to cut down hunt cost, disposal cost, distribution cost and labour costs.

Laudon provinces that companies can utilize the cyberspace engineering to radically cut down their dealing costs ( Laudon, 2002 ) Coase and Williamson identified that utilizing markets is expensive ( Coase, 1937 ; Williamson,1985 ) The cost of making concern in the web is low compared to other traditional agencies such as advertisement on the intelligence documents, TVs, postings and Bill boards. An Internet can make many users at one time, more expeditiously and efficaciously. In add-on it reduces the pull offing cost by holding less figure of employees because a tourer can reach straight via electronic mail for engagement and have the E-ticket in a comparatively low cost. Besides the touristry administration can reach the client straight without utilizing the agents this reduces distribution costs.

Capability to better efficiency of buying and stock list control

SMTEs can easy command its stock list degrees because the cyberspace make it easier to track these degrees electronically so that to shorten the gross revenues rhythm. This is advantageous in touristry because demand in this industry fluctuates ecommerce facilitate communicating between stakeholders to keep their degrees.

Create new markets

As discussed earlier that the demand for on-line minutess in touristry is increasing, this addition the chance of growing.

E touristry increases the ability to feature new concern chances and to capitalize on them. Ecommerce enable touristry administrations to custom-make their merchandises and services by bring forthing what precisely the client wants at the right clip.

Ability to vie in planetary markets

Ecommerce has reshaped the touristry industry in such a manner that companies are non viing merely with local rivals but international since the touristry market is planetary. There for companies from DCs demand to better their merchandises and services to run into the international criterions. Ecommerce enables companies to roll up rival ‘s information ; this was hard in bricks- and- howitzer companies.

Increase the tourer bargaining power.

Electronic touristry helps the clients to entree information on their tourer finishs. This helps them acquire information on monetary values and do engagement basing at a cheapest cost supplier. This increases their barging power against the providers unlike the traditional commercialism where it is hard to roll up information signifier assortment sauces and comparison monetary values before doing determination.

The importance of the ecommerce, hence, can non be underestimated and developing states need to do enterprises to harvest those benefit in its sectors and touristry in peculiar so that to increase efficiency and productiveness in its attempts to better economic system and eradicate poorness which is the major obstruction in Developing States.

6.0 Barriers ON THE Use OF ICT

Harmonizing to UNCTAD Barriers on the usage of ICT in general are as follows:

ICT outgo excessively high

New versions of bing package introduced excessively frequently

Supply of ICT-technology non fiting the ICT demands of the endeavor

The degree of ICT accomplishments is excessively low among the employed forces

Difficult to enroll qualified ICT forces

Existing forces reluctant to utilize ICT

Lack of an updated ICT scheme

Lack of sensed benefits

UNCTAD ( 2001 )


E-commerce have changed the ways companies does their concern. It has greater impact on the industry ‘s value concatenation touristry being the most affected sector. E-commerce unfastened up a batch of chances for SMEs runing in DCs and touristry in peculiar, if good implemented it offers an chance to increase efficiency and effectivity. Tourism companies can efficaciously cut down its costs while aid to make planetary markets. the secondary research done comply with UNCTAD ( ibid ) suggestions that touristry is the industry “ perfect tantrum for e-commerce ” in hapless states, both because it is “ really information intensive ” and “ consumers come from largely developed states with modern ICTs and fiscal substructures ” . Developing states need to use ecommerce in the touristry industry in order to remain competitory in this epoch of engineering where globalization forces companies to seek markets all over the universe. Therefore we can reason that Tourism companies from developing states can take part successfully in the planetary ecommerce but with more challenges because the land drama is free for anyone irrespective the differences in weight. It will take clip off class for developing states to construct its ain competitory advantages since DCs are weak economically compared to developed states.


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