Wednesday, 19 March 2014

e-commerce usage as a metric of internet penetration

I have just tweeted a link to piece in the Santiago Times, an English language newspaper in Chile to the effect that internet sales have jumped massively in the last twelve months in Chile.

At first sight this might seem odd, but internet sales are a valuable metric for internet adoption in a country - if people start using the internet for their daily business, it means that home internet connections are widespread and of reasonable quality.

In the case of Chile that’s hardly surprising - good banks, reasonable infrastructure and the rest.
Sri Lanka, is another example - last year when I visited, the internet was available more or less everywhere, with public subscriber wifi services in the major centres, but while there were ATMs everywhere it was still very much a cash based society - large wads of scruffy, worn, banknotes being required for most transactions. This wasn’t because there were no credit or debit cards, it’s just that the society had not yet made the transition from cash to plastic.

In the case of Sri Lanka where small change is always a problem with not enough coins or low value notes to go around, debit cards would certainly help solve the problem of small change at the supermarket checkout, and to be fair the banks were all enthusiastically promoting the use of plastic in place of cash.

When looking at internet use in areas where development has lagged there tends to be an assumption that countries will repeat the west’s path. I rapidly became disabused of this both in Turkey and Morocco at the end of the 1990’s when it was clear that mobile phones had replaced rather than supplemented the traditional inadequate phone network - who needs wires when you have a mobile.

Just as with 3G data in Sri Lanka - rather than build fixed infrastructure everywhere go for a lower cost option and add fixed infrastructure as required.

In other words if you don’t have a significant legacy infrastructure you can skip forward.

I don’t doubt that in remoter areas of Chile internet access was poor - the fact that the government invested in broadband links for schools shows a deliberate intention to counteract digital disenfranchisement in rural areas. An increase in ecommerce means that the internet is spreadng out of schools and businesses and into the home and that infrastructure is improving and access is more affordable.

It would be interesting to see comparable figures from Peru, which has also experienced a period of recent economic growth but has large remote areas on the altiplano ...

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