The emerging environment for e-commerce in PNG

By Emmanuel Narokobi

It’s been a couple of months now since Data Nets’ www.esishop.com.pg was launched and so it would be interesting to see how it has been going. Data Nets and Westpac PNG have also setup e-commerce for Air Nuigini so I’ve asked Glynn Low at Data Nets to do an interview with us about it and I’ll advise when that interview happens.

 

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The major issue I raised in my last post, was that the majority of PNG’eans do not have credit cards to use on the net. There is also the issue of people getting into un-manageable debt by using credit cards.

In regards to the first issue, we suggested in another post of ours that pre-paid e-commerce could be a an avenue to look at and we illustrated this with the i-Tunes pre-paid card system which would be much like the current service for buying pre-paid credits for your mobile phone.

Besides a possible pre-paid purchasing, online vendors would also have to be credible and so it will be good for bigger well known PNG companies to take the lead in this to build market confidence. I believe that is the approach being taken by Data Nets. Imagine for example a future where a farmer in Wewak could buy a part for his tractor from Bishop Brothers in Port Moresby and do this over the internet because he wasn’t able to find what he was looking for in Wewak town and also because Bishop Bros. does not have a branch there.

Secondly and partly related to the first point is the good news however that Westpac already provides the Visa Debit Card product. So you can enjoy the ability of accessing your own funds in PNG from anywhere in the world. For online shopping this will be a great boost as you can use money that you have and not be tempted into getting into debt. I have also heard from BSP that their Visa Debit cards will be coming out closer to July this year.

So going back to my example of the Wewak farmer, a succesful transaction would probabaly look like this. The farmer pops into Post PNG and buys some e-commerce credits (because he does not yet have his Visa debit card), he then goes across to the internet cafe at More Stationary and then uses his credits to buy his tractor part. Bishop Brothers recieves the order and payment then they send up the part by DHL. Bishop Brothers could then notify the farmer by email, SMS and a phone call that the part is on it’s way and thanking him for doing business with them.

The banking environment is now enabled to run e-commerce in PNG, all we need now is for the big retailers to start looking in that direction in terms of developing their websites and internal manpower and systems to enable online sales. So entreprenuers and business managers out there…yupela yet nau?!

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16 thoughts on “The emerging environment for e-commerce in PNG

  1. It’s interesting to note that the easishop website that was launch practically is not selling anything. How are we going to use it?? Why launch the site when it won’t be used?? Sometimes, I feel that it’s another way to make an impression about something…..yet that website is practically empty…then again, it is sayn something about the people who are involved in launching it.

    @Emmanuel…..maybe they shud ask you to help out there…..you’d done a marvelous work with NFA and NMSA…..oh…just to let you know, I sent them to you……they asked for my advised on which people to use and I pointed them your way..

    Cheers!!

  2. Hi Rex,

    Apparently they have been making some decent money at esishop.com.pg that’s why I have asked Data Nets to tell us abit about it so that they can better explain what they are trying to do and how their efforts are going.

    But in regards to our work, thank you so much for the referrals, I don’t think anyone ever told me that. Shit I think I owe you a carton or two!!!

    Let us know where you work and I’ll send you a thank you present!

  3. Well thats really impressive work for them but i just went to the site and realised they dont sell anything but pre-paid card… but when i went in, they are out of stock!!

    Will be waiting for the interview and know about it more..

  4. @Roby

    Yes…I am anticipating the interview…..wonder how much they made from selling pre-paid cards??

    @Emmanuel
    Remember where Proff: Fukuyama spoke about ‘Nationalism and Identity’ one night…and the next nite was followed by Dame Meg Taylor? Dats the same place I am in. Will send more referrals your way.

  5. Manu, we all have these dreams of being answered on the first ring of a phone call we make to any sales deparments of shops, businesses etc.. in PNG, one has to wait for more than three rings before he/she finally gets answered. And when that happens, after your first question, you get switched to another extension and you wait like for another 30 mintues before you actually place your orders. After placing your order, you wait another week for the delivery or you yourself ring to find TNT consignment numbers and so on..

    Now you are getting the picture! How can you expect these sales people to do well selling on the internet?? Unless of course, their employees agree to pay them more than the managers… such a hard deal.

    Wabigep.

    PS.. Thanks heaps for your response. Lotsa reading..

  6. Daisy, a very good point you mentioned there and that is why I mentioned in my post that’…all we need now is for the big retailers to start looking in that direction in terms of developing their websites and internal manpower and systems to enable online sales….’

    A website is not a magical solution to increased sales it is yet another tool which is succesful in the hands of someone who is prepared to understand the tool to maximise it’s use.

    I guess in short what I’m saying is that the tools are there. It’s just up to how businesses can capitalise on it.

    “If you pay peanuts, you’ll get monkeys”

  7. Manu, I would like to hear your views about the current situation of E-commerce in PNG, considering the benefits from the internet and digital technologies,what are the local obstacles that need to be overcome to take advantage of the opportunities provided by the E-commerce, and E-economy

  8. Thanks Thomas for the link

    Some of my thoughts about e-commerce in PNG and the current http://www.kowrie.com/.

    The issue is the jurisdiction that governments have for transactions that happen over the internet. The PNG approach is to say that there are certain nexus points or connections that are sufficient to permit jurisdiction. That’s the approach of a number of nation states. Lots of countries say that they will impose jurisdiction based on a number of criteria, such as whether the person making the transaction in that country or whether the country is connected to the transaction. The debate is particularly fierce concerning taxation of e-commerce, since many countries would love to tax transactions passing through their borders even though the parties to the transaction may not be based in that country. So PNG’s position is not consistent with that of other nation or states.

    A lot of problematic questions do arise, though. Should any bit of information that passes through a country be subject to its laws? Can countries tax information and transactions passing through a country’s networks – even though they may be mere stopping points in the global network? How should governments regulate companies that are incorporated offshore?

    One of the concerns that may arise is that these jurisdiction problems will force investment off-shore. If companies think there are jurisdictional problems in one country’s internet space, it is easy enough to set up companies off-shore wherever there is a better regulatory policy. It is unclear how this all may play out.

  9. Some interesting and very important issues raised there Wantok.

    My general feeling is that like any (relatively new) industry that wants to be developed by the Govt., perhaps tax issues should be delayed until the number of e-commerce operations gains momentum to warrant its introduction.

    Mining companies are given various forms of tax breaks, so perhaps something as imporatant as e-commerce should be the same. Although everyone involved in e-commerce leading up to that critical mass should be studied to see how the industry develops in PNG so that should taxing become necessary, then it can be done to promote business and not tie it back.

    Studies on how it develops here in conjunction with expriences in other similar economies around the world would be the steps to take for some given ‘grace period’.

    In regards to Kowrie, I’d be interested to see how cash can be redeemed from their service. Would it be from their cards or from a bank account in PNG? Currentlly, (as far as I know) with e-commerce in PNG it is impossible to have cash deposited into PNG bank accounts from e-commerce merchants. The only operation able to do that at peresent is esishop.com.pg

    I’ll also be contacting Kowrie soon to find out more.

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