In 2020 as shops and markets all over the world were forced to close due to the coronavirus, people shopped from home, with e-commerce seeing exponential growth in many markets. And the trend will continue. Online platform Shopify predicts the global e-commerce market will be worth US$4.89 trillion this year, or 21.8% of total retail sales.
“We have to ask ourselves the question, how much did the Pacific really benefit from this? You know, how much did MSMEs (Micro, Small and Medium-sized enterprises) benefit? And more often than not, unfortunately, the answer is nil… MSMEs weren’t really in that space,” the Pacific Islands Forum Secretariat’s Director Programmes and Initiatives, Zarak Khan says.
“E-commerce is an area that we have been lagging behind quite poorly,” says Khan. It’s also an area the PIF is prioritising, with the commissioning of national e-Commerce assessments designed to better understand the digital trade readiness of various Pacific countries. The information will inform a regional e-commerce strategy and roadmap, which finance ministers will be asked to endorse in principle next month, so regional action can be taken to address some of the constraints and barriers.
A regional summary of the national assessments identifies some of those barriers as access to affordable payment platforms, high freight costs, connectivity problems (especially for rural vendors), duties and charges, the cost of telecommunications and a lack of e-commerce legislation and frameworks.
“The roadmap is not meant to be a panacea to address all these issues,” says Khan. “What is meant to do is send a strong message to our development partners that, you know, ministers have looked at this. These are our priorities. This is where the region is coming together; please, can you come in and support us and work with us, primarily, because there’s a lot of different international agencies and actors in this space. But we haven’t really seen that level of coordination and complementarity that we hope to see. And we’re hoping that the strategy and roadmap can try and address that.”
The real beneficiaries of this work are likely to be MSMEs. Many of them have shown incredible innovation and resilience through COVID, using social media and messaging apps to sell everything from cakes to clothes to virtual dance classes. But their ability to scale up and sell regionally, let alone in bigger markets, is limited.
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