Candida Dissertation2010 v12

- An investigation of the influence of adoption of ecommerce on economic development: the case of Angola -
By
Cndida Patrcia Verssimo e Costa
A DISSERTATION Submitted to
The University of Liverpool
In partial fulfillment of the requirements for the degree of
MASTER OF BUSINESS ADMINISTRATION
2010
A Dissertation Entitled
By Cndida Patrcia Verssimo e Costa
We hereby certify that this Dissertation submitted by Cndida Patrcia Verssimo e Costa conforms to acceptable standards, and as such is fully adequate in scope and quality. It is therefore approved as the fulfillment of the Dissertation requirements for the degree of Master of Business Administration.
Approved:
Shane McMordie - Dissertation Advisor
Date: Date: 28th Oct. 2009
The University of Liverpool 2010
CERTIFICATION STATEMENT
I hereby certify that this paper constitutes my own product, that where the language of others is set forth, quotation marks so indicate, and that appropriate credit is given where I have used the language, ideas, expressions or writings of another.
Signed Cndida Patrcia Verssimo e Costa
ABSTRACT
by Cndida Patrcia Verssimo e Costa
Electronic Commerce The electronic commerce is considered of great benefit for the development of many economies as it reduces the cost of products, provides transparency and promotes more agility. Although very few entities know about the evolution of ecommerce in Angola, many people and organizations do not believe in it and/or still to skeptical and resistant to use it, for many reasons. Therefore, the aim of this study is discuss the influence of the adoption of electronic commerce in Angola and how it affects its economic growth. Next to the theoretical discussion was carried out a field research where hypotheses about differences of opinion regarding the purchase on the Internet and buying in traditional stores were established. The sample was chosen randomly, mostly managers, employees and university students in Luanda, Angola. Results show that consumers generally prefer to shop in traditional stores and some items like books and electronic products are the most purchased when using electronic markets, and such behavior only obstruct the Angolan economy to grow as much as the developed countries.
Keywords: B2C, Internet, e-commerce, traditional commerce, developing countries, consumer behavior, economic growth.
ACKNOWLEDGEMENTS
First and foremost I would like to thank God because he always find a way to put me on track when Im lost and I got lost many times in this journey that was the dissertation. God sent many angels in this journey to support me and the first one and most important of all is my mother. I dedicate this work to her, she was caring and patient when I was temper, depressed and lost, and her smile, efforts and dedication to pull me up was incomparable. To the sister I chose for me Paula Costa for the sacrifices she made so that I could succeed in this work like when I had no power (electricity) at home and she let me stay at her place till late in the night waiting awake until I finished even though she had to wake up early the next day for work. To Jos Roque my dearest friend of all times for the support he gave me after we meet again after being 4 years apart, appeared at the right time and constantly pushed me forward, as always. To Lupi Monteiro for inspiring me in the last minute when I almost gave up everything, although for the wrong reasons, but with the exact degree of energy and strength which I used to concluded all my work. To special angels that without them important parts of this journey would not be possible, they are, Norberto Flix, Anuarite Kassongo, Sebastian Garnier, Iracema Verssimo, Carlos Miranda and Jean Colsoul. To the people I met while doing this work, the ones I got in touch after long time, the ones I do not see for ages but through Facebook or other networks did not hesitate to send me strength and support, to all the people that answer my questionnaire in a short period of time. And last but not least my Dissertation Advisor, Mr. Shane McMordie, always patient and caring, always willing to support and to see me succeed and to my SSM, Haidee Sprague, thank you so much for your patience with me, I know it is not easy, just ask my mum.
TABLE OF CONTENTS ABSTRACT.......................................................................................................... 4 ACKNOWLEDGEMENTS .................................................................................... 5 TABLE OF CONTENTS ....................................................................................... 6 LIST OF TABLES ................................................................................................ 8 LIST OF FIGURES ............................................................................................... 9 CHAPTER 1: ...................................................................................................... 11 INTRODUCTION ................................................................................................ 11 1.1 Contextual background, Angola................................................................ 11 1.2 Aims and Objectives................................................................................... 14 1.3 Method outline ............................................................................................ 15 1.4 Scope, limitations, & expected results ..................................................... 16 1.5 Structure of chapters ................................................................................. 18 CHAPTER 2 ....................................................................................................... 20 LITERATURE REVIEW...................................................................................... 20 2.1 Economic Perspective (Introduction) ....................................................... 20 2.2. Internet and Electronic Commerce .......................................................... 22 2.2.1. Definition and scope .............................................................................. 22 2.2.2. Main differences between ecommerce and Conventional Commerce28 2.2.3. Main types of Electronic Commerce ..................................................... 32 2.3. Macroeconomic influence (Main Indicators) ........................................... 33 2.3.1. Telecommunications .............................................................................. 33 2.3.2 Services Access ...................................................................................... 33 2.3.2.1 Fixed network........................................................................................ 33 2.3.2.2 Mobile network...................................................................................... 35 2.3.3. Introduction of Services......................................................................... 37 2.3.4. Infrastructures ........................................................................................ 39 2.3.5. Evaluation of prices................................................................................ 40 2.3.6. B2B Influence.......................................................................................... 42 2.3.7. B2C Influence.......................................................................................... 43 2.3.8. E-Government Influence ........................................................................ 44 2.3.9. Impact on competition of the market .................................................... 48 2.3.9.1. National ................................................................................................ 48 2.3.9.2. International ......................................................................................... 48 2.4. At Corporate Level..................................................................................... 49 2.4.1. Perspective of Product and Diversity ................................................... 50 2.4.2. Perspective of Interface, Performance e Functionalities .................... 55 2.4.3 Perspective of the Geographical Location ............................................ 57 2.4.4 Perspective of Logistics and Delivery capacity .................................... 59 2.4.5 Perspective of Promotion ....................................................................... 61 2.4.6 Perspective of the Brand and Loyalty.................................................... 62 2.4.7 Perspective of the service ...................................................................... 64 2.4.8 Perception of the Price............................................................................ 66 2.5. At Consumer level ..................................................................................... 68 CHAPTER 3 ....................................................................................................... 70 6
RESEARCH METHODOLOGY .......................................................................... 70 3.1 Profile of Users ........................................................................................... 70 3.2 Theoretical Orientation .............................................................................. 71 3.3 Survey Design............................................................................................. 72 CHAPTER 4 ....................................................................................................... 74 RESULTS OF RESEARCH FINDINGS.............................................................. 74 4.1 Summary of the Survey Results................................................................ 74 4.1.1. Background information ........................................................................ 74 4.1.2. Information and communication technology (ICT) .............................. 75 4.1.3. Summary of the Interviews .................................................................... 79 4.2. Discussion of Research Findings ............................................................ 81 4.3 Conclusion .................................................................................................. 83 CHAPTER 5: ...................................................................................................... 86 CONCLUSION AND RECOMMENDATIONS .................................................... 86 5.1. Limitations to the research....................................................................... 86 5.2. Area for further research .......................................................................... 87 5.3. Recommendations..................................................................................... 87 REFERENCES ................................................................................................... 89 APPENDICES .................................................................................................... 94
LIST OF TABLES
Table 1: The Internet Usage Statistics For Africa ........ ERRO! MARCADOR NO DEFINIDO. Table 2: Ecommerce Perspectives ........... ERRO! MARCADOR NO DEFINIDO. Table 3: Number Of Lines Growing Rate.. ERRO! MARCADOR NO DEFINIDO. Table 4: Geographical Distribution Of Users From The Fixed Network .......ERRO! MARCADOR NO DEFINIDO. Table 5: Mobile Phone Users Growing RateERRO! MARCADOR NO DEFINIDO. Table 6: Geographical Distribution Of Users From The Mobile Network .....ERRO! MARCADOR NO DEFINIDO. Table 7: Estimative Of Internet Users....... ERRO! MARCADOR NO DEFINIDO. Table 8: Angola Internet Usage And Population GrowthERRO! MARCADOR NO DEFINIDO. Table 9: Geographical Coverage.............. ERRO! MARCADOR NO DEFINIDO. Table 10: Geographical Coverage By Services NetworkERRO! MARCADOR NO DEFINIDO. Table 11: Estimated Market Penetration Rates In Angolas Telecoms Sector End 2010.................................... ERRO! MARCADOR NO DEFINIDO. Table 12: Voice Lines And Data From Fixed Netwok .. ERRO! MARCADOR NO DEFINIDO. Table 13: Backbone.................................. ERRO! MARCADOR NO DEFINIDO. Table 14: Current Rates Per Utt ............... ERRO! MARCADOR NO DEFINIDO. Table 15: Average Revenue Per User - Arpu - (Usd/Month) ERRO! MARCADOR NO DEFINIDO. Table 16: Table Summary Of "Gvu's User Surveys ..... ERRO! MARCADOR NO DEFINIDO.
LIST OF FIGURES Figure 1 : Angola Key Indicators............... ERRO! MARCADOR NO DEFINIDO. Figure 2: Gdp By Sector, 2002 ................. ERRO! MARCADOR NO DEFINIDO. Figure 3: Gdp By Sector, 2008 (Percentage)ERRO! MARCADOR NO DEFINIDO. Figure 4: Internet Users In Africa.............. ERRO! MARCADOR NO DEFINIDO. Figure 5: Internet Penetration In Africa..... ERRO! MARCADOR NO DEFINIDO. Figure 6: Africa Top 10 Internet Countries ERRO! MARCADOR NO DEFINIDO. Figure 7: Strategic Objectives Of The National Program For Electronic Public Purchases (Pncpe) ................................... ERRO! MARCADOR NO DEFINIDO. Figure 8: Sequence Of Tendency Of Consumer DecisionERRO! MARCADOR NO DEFINIDO. Figure 9: What Is Your Status?................. ERRO! MARCADOR NO DEFINIDO. Figure 10: Do You Think The Literacy Level In Angola Is Adequate To Allow Citizens To Easily Access Information And Communication Technologies? .......................................... ERRO! MARCADOR NO DEFINIDO. Figure 11: How Do You Normally Access The Internet?ERRO! MARCADOR NO DEFINIDO. Figure 12: What Is Your Opinion On The Cost Of Accessing Internet In Angola? ................................................................. ERRO! MARCADOR NO DEFINIDO. Figure 13: How Well Developed Are Information And Communication Technologies In Angola? .......................... ERRO! MARCADOR NO DEFINIDO. Figure 14: What Do You Think Are The Major Obstacles To Access Internet In Angola?....................... ERRO! MARCADOR NO DEFINIDO. Figure 15: How Many Times Per Week Do You Make Purchases In A Sales Store?......................................... ERRO! MARCADOR NO DEFINIDO. Figure 16: Have You Ever Made Online Purchases? .. ERRO! MARCADOR NO DEFINIDO. Figure 17: Do You Think Online Sales Could Substitute Your Traditional Purchases?............................................... ERRO! MARCADOR NO DEFINIDO. Figure 18: Which Online Market You Are More Inclined To Make Purchases From? ....................................................... ERRO! MARCADOR NO DEFINIDO. 9
KEY TERMS AEC African Economic Outlook B2B (Business-to-business) e-commerce model in which all of the participants are businesses or other organizations. B2C (Business-to-consumer) e-commerce model in which businesses sell to individual shoppers. CNTI - National Committee for Information Technology Corporate portal a major gateway through which employees, business partners, and the public can enter a corporate website. Domain name a name-based address that identifies an Internet-connected server. Usually it refers to the portion of the address to the left of .com or .org, etc. EC electronic commerce E-Government EC E-commerce model in which a government entity buys or provides goods, services, or information to businesses or individual citizens. Intranet a secure internal corporate or government network that uses Internet tools, such as web browsers, and Internet protocols. Intrabusiness EC e-commerce category that includes all internal organizational activities that involve the exchange of goods, services, or information among various units and individuals in an organization. ITU = International Telecommunications Union. IWS = Internet World Stats. E-procurement The use of web-based technology to support the key procurement processes, including requisitioning, sourcing, contracting, ordering, and payment. Eprocurement supports the purchase of both direct and indirect materials and employs several web-based functions such as online catalogues, contracts, purchase orders and shipping notices. Mobile Commerce (m-commerce, m-business) Any business activity conducted over a wireless telecommunications network, or from mobile devices. GDP Gross Domestic Product OECD = Organization for Economic Co-operation and Development. p.r. = penetration rate WWW- World Wide Web INACOM National Institute of Communications of Angola UTT - Units of Telecommunications Taxes
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CHAPTER 1: INTRODUCTION
1.1 Contextual background, Angola
After more than two decades of declining economic performance, Angola is currently staging a promising recovery. It is the second largest producer of oil in subSaharan Africa, and its economy depends and is supported mostly for the oil prices which when its high it led to continuous gross domestic product (GDP) growth, such as the latest increase of around 20% for the past three years (Internet World Stats, 2010). The GDP is represents the economic growth and it corresponds to the sum of goods, products and services produced within the country during a given period, usually one year. Over the past several years, average real economic growth in the region has increased vitally while, in a growing number of countries, real GDP per capita has been positive. Figure 1: Angola Key indicators
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Source: BIT 2010. (1) Gender Empowerment Measure; (2) Percentage of population living on less than $2 a day.
Angola lived in a long war that lasted for more than 30 years. Because of that, Angola wasted a precious time that would contribute to its development; during that time the sectors like technology, science, telecommunications and alike grew very fast in the developed countries and in some developing countries putting Angola very far behind when concerning the use of the new technologies. The war finished in 2002 with the killing of the leader of the rebels and after that started the reconstruction process that focused on the development of the key sectors such as civil construction, education, the health sector, agriculture, industry, new
technologies, etc. With the war many industries were closed down and become obsolete leaving Angola for many years dependent of about 90% of imported products. Such scarcity of products meant that products become very expensive and still hard to find. Nevertheless, right after the war, also there was a considerable increase of foreign investment in all sectors but for Angola there was a large gap that hinders it to be weighed against other emerging economies or even developed economies in terms of Internet and electronic commerce. That is, while Angola was in war, slowly, developed countries worldwide were absorbing large amounts of information, from different origins and of the most diverse topics, but increasingly in a characteristic format, that is electronically. Since first time talked about the Internet, it has become a global network of thousands of networks interconnected, allowing connecting Occidental and Oriental countries in a few seconds. Within the network there are thousands of other networks, whether private, public, corporate, governmental and personal they all describe the concept of global network and global information.
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With the global network, came a new economic, digital concept and almost parallel. The author refers to the New Economy and Electronic Commerce, which invaded all homes and jobs in the developed countries in a compelling, fast, and so far, with no chances of premeditated complaints that can generate major impacts. However, since there was not possible to use such technologies, the commerce in Angola grew in the conventional way. The conventional way means the traditional way of using markets, sales stores and the street sellers. Right after the independence in 1975, the commerce was about the popular stores, the free markets with the so called Quitandeiras, and the street sellers. These vendors (quitandeiras) are considered a cultural symbol of traditional commerce in Angola. The kind of products commercialized where diversified depending on the context, that is, in stores people could find the groceries, the meat, and the so called basic basket containing rice, pasta, cooking oil, beans and this sort of food for a house holding, clothes, shoes, books, etc. In the free market, besides the usual products such as fish, fruits and vegetables, these markets always presented themselves with typical products such as cola, ginger, spices, ginguba, flour (corn and cassava), and palm oil. The vendors of such products usually have their stands near the ones that sells roots, mineral products like argil, a variety of leafs, shells, ribbons, beads, seeds and figurines that are usually used for traditional treatments. After the independence the markets gained new vitality linked to the disarticulation of the store networks and the consequent lack of sales stores. New markets arose out of nowhere, in places before marginal, always on unoccupied land without hygienic conditions, and they grow all of a sudden, to the measure as it was developing the parallel economy (of free market) which complemented the official (of tariff and fictitious prices and reduced products). 13
Gradually, was appearing all sorts of products in these markets, especially in the more marginal. Beside the usual products, began to emerge clothes, appliances, parts and accessories for vehicles, and all sort of industrial products such as medicines non-existing in pharmacies. Nevertheless, Angola main barriers to socio economic development have mainly a political root which is the basis of all problems, as happens with many developing African countries. The main commercial activities are in the sectors of oil, diamonds and construction, anything else is limited. There is a high degree of poverty and the country is under government total control. According to BIT (2010) the main socioeconomic barriers are poverty mainly resultant from the war, poor people is concentrated in rural areas and with the reconstruction process government is creating more poverty by evicting people from their houses so that they can reconstruct the neighborhoods for a higher class; high levels of unemployment, illiterate people or with low academic and technical skills; huge social inequality, appearance of a small elite of very rich people which results in a disparity of economic classes. According to BIT (2010) 1.2 Aims and Objectives The aim of this study is to discuss the changes in consumer behavior in the Angolan society by comparing the traditional ways of making purchases (in stores) and the adoption of electronic commerce practices, along with how it can influence the economic growth of Angola. The author sought to provide in this work a comprehensive response to the problem, presenting the various viewpoints in the scientific literature on the subject and testing for these views to the final consumer. The work is certainly not a final answer, but is expected to be an interesting assessment of what has been so far
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investigated in the area and a comparative test of the importance of each factor proposed by researchers. 1.3 Method outline The methodology that will be used will be the triangulation method that includes both qualitative research and quantitative research. The methods primarily will be based on the analysis of the existing literature review, especially case studies of Angola and developing countries such as African and Latin Americans, and OECD countries such as Portugal. The reason for choosing these countries is because they are particularly similar to Angola although they are geographically, demographically and economically different. It will be important because it will allow making a comparison and identification of factors that benefit or detract Angola from grow economically and culturally with the use of electronic commerce. The literature review and the interviews will focus on the areas of statistics of electronic commerce and Internet in Angola, socioeconomic views, users buying behavior, government and regulatory issues, corporate and international
perspectives. The approach taken in this study is, for the qualitative, conduct analysis of: CNTI (National Committee for Information Technology, author own
translation) reports and conference papers with the support of internal contacts Accessing TradeJangos final report, the first electronic marketplace of
Angola, as a project with the support of the CEO contacts Ministry of Finance database with the support of internal contacts 15 Internet adoption rates documents via Internet Ministry of Science and technology database with the support of internal
Accessing previously written dissertations on the subject of the
countries in cause via Internet Accessing Internet WTO database on the subject Articles in news media
Conduct research by: Indirect observation of the TradeJango company as the first
electronic marketplace Interviewing colleagues/internal contacts Interview former and actual clients of tradeJango being them
large buyers, the SMEs and individuals at the companies Interview the CEO of TradeJango, the first electronic
marketplace of Angola Interview the main consultants that are/were involved in the
implementation of electronic marketplaces and alike in Angola Interview key people of the Ministry of Finance, responsible for
the implementation of the government portal of Angola Interview Interested parties Searching specialized journals from the University of Liverpool
Online resource centre Case study in a sense of describing the context and the
background of the country situation, the Internet and EC, people and companies behavior towards technologies, via the Internet and via personal experiences. 1.4 Scope, limitations, & expected results
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The scope of this study mainly the introduction of electronic commerce in Angola, as a developing country, and the influence it can provide to the National economy. The author will attempt to answer the following questions: 1. What are the current Internet consumerism characteristics at
Ecommerce level? 2. ecommerce? 3. What types of characteristics socio-economic are necessary to The Internet adoption rates are adequate for the use of
help Angola with the development of Ecommerce compared with other developing countries and developed countries? 4. At a technological level, fundamentally the Ecommerce, is
Angola prepared to compete with other economies? The limitations of this study are mainly related with the literature review, the number of libraries is relatively short and the information is quite limited in terms of subjects. The Information technology subject is still growing in Angola therefore most of the information is much technical and regarding the physical side of the IT. The fusion of technology and economy is still a field to explore in Angola as a developing country. There are initiatives, inspired in the knowledge brought to the country by the foreigner investment and consultants but they are dispersed and the access to that information is not easy. Thus information on the subject is very limited. Also according to INACOM (2010), there are no exact statistics with the population which makes that the statistics on the use of telecommunications services to be merely estimative. However, the author worked in the first national electronic marketplace and also has the advantage of making part in the kick off of such project as well as in the 17
implementation towards the creation of the company. Such experience gained allowed the contact with many entities directly and indirectly involved in the technology sector in Angola. The disparate access to Internet by the different social groups situations, being it in different countries, different cultures and basically their different conditions influences the process of globalization worldwide (Kamssu, 2004). The Internet is a vital factor for the use of the Electronic Commerce and for Angola, thus Kamssus work entitled Shortcomings to Globalization: Using Internet Technology and Electronic Commerce in Developing Countries will be relevant as the author will be able to get acknowledge of the Internet barriers that affect also other countries given that this study is a comparative study and to analyze the statistical analysis that revels the empirical relationships between these communication factors and the Internet adoption of different countries. Therefore, the results expected are the best possible with a compilation on background information on Internet and electronic commerce, the level of acceptance of existing users, the market behavior and the influences to the economy so far, compared to other economies. 1.5 Structure of chapters Considering the objectives mentioned previously, the work began by highlighting the reality of commerce in Angola, following looking for the most suitable definitions for e-commerce as a way of knowing what it is going to be investigated. In this sense, the author also attempted to uncover what are the main differences with traditional commerce and what are the benefits and barriers, and the advantages and disadvantages presented relatively to eCommerce. Furthermore, the author made an attempt to characterize the Electronic Commerce, by presenting the main types and business models defined by
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researchers in the field, as well as products that are more common in this type of commerce and forms most commonly used to typify them. Afterward the author set the various articles of the subject and organized them in terms ecommerce users behaviors and the economy. Thus, it was possible to present an overview of the topic; using the views of individual investigators and showing the diversity of information that exist, even for specific topics. In the second chapter, there was a description of the macroeconomic influence of eCommerce in Angola and a statistical characterization of the development of electronic commerce, both in Angola and OECD countries and in individual cases in African countries, the United States and European Union. The third and fourth chapters are devoted to the presentation of the methodology and main findings of the study in this work. Finally, the fifth chapter presents the main conclusions and contributions of the dissertation, the main limitations of the survey and suggestions for researchers wishing to do work in this area.
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CHAPTER 2 LITERATURE REVIEW 2.1 Economic Perspective (Introduction) Angola is a very rich country located in south-central Africa that suffered a war that lasted almost thirty years and which left it very ruined. Most of the negative effects of the war occurred since late 1992. Conflicts occurred since then have affected many cities and most of the basic infrastructure of country has been destroyed or deteriorated due to the cumulative effects of inadequate maintenance and lack of investment. The agriculture economy has suffered greatly in the removal of peasants from areas of conflict, the indiscriminate slaughter of cattle, the plundering of the assets of the peasants, inaccessibility of rural areas and cities due to the landmines and the stoppage of all the commercial activities, harmed both the supply of inputs to farmers as well as the flow of goods to the markets. Nevertheless, the oil sector is by far the one that always kept a pace of growing. Its performance had greatly diverged from other sectors of the economy.
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According to United Nations (2002 cited in Anon, n.d) there was low productivity in agriculture together with a very inefficient public sector. The mining sector, dominated by oil and diamonds was accounting for 3% of GDP in 1960, 6% in 1971, 25% in 1981, 50% in 1995, 58% in 1996, 47% in 1997, 38% in 1998, 59% in 1999 and 60% by 2000 and 54% by 2001 (Figure 1). While agriculture was affected by war and a political environment that does not fostered its growth, onshore oil exploration, mainly dominated by foreign multinationals had greatly increased their production. As result, Angola has become heavily dependent on oil, with it constituting at the least 40% of GDP, 90% of exports and 75% of government revenue. Figure 2: GDP by sector, 2002
Other Transformation Diamonds
Oil Commerce
Agriculture
Source: Minader (2002)
With such concentrated economic structure into two sub-sectors it would naturally arise some large distortions in the development of the country. However, by 2008, 6 years after reaching the peace and during the hard process of reconstruction of the country, the figures did not change much, as per the figure below. 21
Figure 3: GDP by sector, 2008 (percentage)
Source: African Economic Outlook (AEC), 2008
In the peace era, the dependency of the oil sector grew by 3.9%, the construction sector took its place and grew at an incredible scale during the reconstruction of the infrastructures but the majority of the projects were of very low quality, with very high prices that came through corruption and inefficient procurement. The commerce sector fitting the sector of services, only grew by 1.9% in almost 10 years. According to the AEC (2010) the low transparency and weak institutions in the economic sector of Angola happens because Angolas economy remains highly concentrated in the hands of a small, extremely well connected political elite, and to transform this situation it will require huge efforts. 2.2. Internet and Electronic Commerce 2.2.1. Definition and scope The definition of Electronic Commerce (EC), like many other evolved over the years, most notably the evolution that has suffered over the past fifteen years due
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to the explosion of the Internet. Initially, the definition of Electronic Commerce was intimately connected to computer to computer connections in the form of EDI (Electronic Data Interchange). The ITU (n.d, cited in Internet World Stats, 2009) defines the Internet user as someone aged 2 years old and above, who went online in the past 30 days. A distinguished definition is from the US Department of Commerce (n.d, cited in Internet World Stats, 2009), which states that the Internet users are those 3 years or older who 'currently use' the Internet and to conclude the CNNIC (n.d, cited in Internet World Stats, 2009) defines the Internet user as a Chinese citizen, aged 6 or above, who uses the Internet at least one hour per week. However, the Internet World Stats (2009) resumes the definition of Internet user as anyone currently in capacity to use the Internet. Though, the number of users cannot be calculated by the existing number of Internet access because, especially in the developing countries many individuals share the same Internet connection. For that reason Internet users generally outnumber the amount of Internet access subscribers (IWS, 2009). Table 1: The Internet Usage Statistics for Africa
Source: Internet World Stats (2009)
According to Internet World Stats, Internet use grew in Africa 1,809.8% between 2000 and 2009, surpassed only by the Middle East, which registered a rate 23
of 1,675.1% over the same period. Over the same nine years, Latin America grew 934.5% in relation to access to the Web. For comparison, in the same period the United States showed a rate of 76.2% growth of its population cybernetics, against 54.2% in Germany, 46.7% in England and 43.1 in France and 96% in Japan. These figures show that the advancement of digitalization is faster than the predictions made by experts and indicate that the impact of new technologies on the values inherited from the industrial age will be more traumatic than previously thought, because the transition will be shorter. From the point of view of Africa, as it is impossible to curb the growth of the Web, the solution seems to be to increase the pace in the awareness of the need to adapt to the changing times, especially in the area of communication, which had its routine and its values more affected by the new technologies. Figure 4: Internet users in Africa
The indicators of Internet Users in Africa for 2009, shows that in contrast with the rest of the world, Africa altogether has only 3.9% of Users.
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Figure 5: Internet Penetration in Africa
While the world average of Internet penetration of the world is of 24.7%, Africa still very behind with a penetration of 6.7%. Figure 6: Africa Top 10 Internet countries
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Angola does not reach the top 10 Internet African countries. Although considered a very rich country, it is in a reconstruction process after a long war that led it behind in terms of science and technology, among others. E-Commerce According to Panagariya (2000), there are six mediums of electronic commerce, namely the fax, telephone, television, electronic payment and money transfers systems, Electronic Data Interchange (EDI) and Internet. Its not much to say that in Angola the most used and considered quite developed are the fax, telephone and television which are the ones also widely used for promotion and to perform commerce. However, the today growing buzz word for promotion and to perform commerce is definitely inclined to the Internet. The Internet constitutes a powerful tool to facilitate and multiply the global communication between people and institutions. From an economic point of view, its potential is reflected fundamentally through electronic commerce, an application from the information technology directed at provide support to the productive processes and the transaction of goods and services which the author will discuss in detail later on. Commerce in the broadest sense is a social and economic activity that is associated with mankind almost since its existence. However, over time that same man, under the circumstances deriving from the relationship with other men and the natural evolution of the species, was stimulated to adopt new and different ways to trade being the Electronic Commerce the latest form adopted (Batista: 2004:18). Many expressions are found around this topic, or rather, this topic centers around itself a determined number of other essential and decisive expressions to understand the language of Electronic Commerce. Many are also the concepts, yet
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it is necessary to isolate them and understand them, otherwise there is a risk to misunderstand all the dynamics involved around the e-commerce. By electronic commerce the author referred to Turban et al (2008: 4) definition, which states that Electronic Commerce (EC) is the process of buying, selling, transferring, or exchanging products, and/or information via computer networks, including the Internet. Turban et al (2008: 4) completed that definition through several perspectives where the most appropriate for the author are the Business, the Service, and the Collaborative perspective. Table 2: Ecommerce perspectives
E-commerce Perspectives
Business perspective
Definition
is doing business electronically by completing business processes over electronic networks, thereby substituting information for physical business processes (Weill and Vitale, 2001, cited in Turban et al, 2008).
Service perspective
is a tool that addresses the desire of governments, firms, consumers, and management to cut service costs while improving the quality of customer service and increasing the speed of service delivery (Turban et al, 2008: 4) that is it entails the B2B (Business-to-business) and the B2C (business-toConsumer) interactions.
Collaborative perspective
is the framework for inter- and intraorganizational collaboration
Source: Adapted from Turban et al (2008:4)
In a very simple way EC can be defined as doing business electronically being it with or without the Internet. However, E-commerce is more than just buying and selling products online. Instead, it encompasses the whole process online development, marketing, sale, delivery, customer service and payment for goods and services purchased by global communities of (Diniz et al, n.d:3) virtual clients, with the support of a worldwide network of trading partners. From a less academic point of view, electronic commerce is a new way to drive, implement and develop business.
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In Angola it still at very early age, however it presents itself with an enormous potential capable to radically alter all economic activities and various social environments. Electronic commerce can also be approached in terms of the elements of its infrastructure, its impact on the traditional marketplace, and the continuum of ways in which electronic commerce is manifested (Mann, 2000:3). In the developing countries, the infrastructures are one of the majors concerns that detract them of socioeconomic development. According to Mann (2000), to evolve, EC requires at least three types of infrastructure: Technological infrastructure to create an Internet marketplace. Process infrastructure to connect the Internet marketplace to the traditional marketplace. Infrastructure of protocols, laws, and regulations. Additionally Mann (2000) states that simultaneously, such infrastructures allow EC to innovate the traditional marketplace in three ways: Process innovations: Product innovations: Market innovations: The effects of this revolution are not, in many cases, associated with large, visible and prominent impacts, such as new product type or the elimination of intermediaries. Rather, effects less visible but perhaps more prominent focus on the daily routines of business activities such as ordering office supply, payment of bills, among others. 2.2.2. Commerce 28 Main differences between ecommerce and Conventional
Traditionally, the main difference between electronic commerce and conventional commerce would be that the first one opposite the second one utilizes an electronic platform as interface to interact with its clients. However, with the development of technology this explanation no longer makes sense, being that nowadays even the conventional commerce in some situations utilizes electronic platforms to interact with the consumer, at the same physical location in which the vendor performs its sales. In terms of electronic commerce between companies and individuals, the so called B2C, it is significant to note that in recent years have appeared mixed models, derived from the entry of traditional commerce companies in B2C business involving the use of Electronic Commerce as a second channel of contact with customers. Palmer (1997) divides commerce in the Retail Industry in 4 formats: Physical Stores, that is the commerce that uses physical stores to sell their products to the consumer; Catalogues, which are sales that are made by consulting a catalogue and subsequent order, which is usually done via telephone or mail; Cable television, where viewers select the products by viewing programs where they are presented and making the product order via the telephone; WWW, the last format to emerge and which uses the Internet as a preferred form of contact with the customer.
All these formats can suffer the "interference" of Electronic Commerce, so the format itself can not be considered a factor one hundred percent differentiator: The physical stores are subject to the use of technologies such as EDI and a more direct relationship with the user through contact via kiosks and other
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equipment installed at customer premises to provide some of the convenience that electronic commerce can give; Catalogues, that already migrated to the WWW long ago, mainly use telephone systems based on computer systems to accept orders or offer their books on media like CD-ROM, allowing a more interactive presentation of products; Sales through Cable TV also use sophisticated technology, such as catalogues, and with the combination of computer and television it will increasingly make intensive use of interactivity;
The commerce via WWW is the format that the laypersons often describe as the Electronic Commerce B2C and the formats which makes greater use of the potential that new technologies offer. However this format in recent years has also used some "traditional technologies", there are examples (Amazon) that chooses to go over to storage or by opening stores. Despite this entry of Electronic Commerce in formats that traditionally its influence would not be imagined, it is clear that it is not because a physical store utilizes information technologies, that it will be known as e-commerce, this store simply utilizes in some of its processes forms of E-commerce (such as EDI). Additionally, according to Palmer (1997), there are characteristics that are unique to each format and which constitute its competitive advantage (eg. direct contact, product testing, no need to use a computer system). When it comes to physical goods, the sites WWW can not yet offer to the consumer an experience of touching and seeing the good they want to buy. in addition, while in a store the consumer usually has direct access to the goods, with the Internet on the other hand, in the case of physical products, the consumer will 30
always have to wait for product delivery. There are also differences not negligible, as the number of available products, the potential of describing the goods and to provide information and the time spent to buy the product (which curiously, according to a study by Palmer (1997), is inferior in physical purchases and catalogue purchases). Nevertheless, Han & Han (2003) present the problem in a different light, saying that the major differences between electronic channels like the Internet and physical channels are related to the creation of customer value. In fact, the characteristic of the Internet is sure to affect the ability of the user experience with the product, but on the other hand, it offers the possibility of the customer to access to the shop from almost anywhere at a reduced cost and at any time. Through the Internet (and other digital channels), it is also possible to transmit digital information, which means that products that are based on information have a potential advantage in being acquired in this way, because the physical support or the hardware can be eliminated, thus reducing costs to the consumer. The ability to create value through Information is therefore, according to Han & Han (2003), the main differentiating factor and one that has the capacity to generate competitive advantage for Electronic Commerce. Besides selling the product itself, you can electronically provide the customer added value, based on information at very low costs for the store. It is, for example, possible to fully inform consumers about the characteristics of the wine they are buying, or contact a customer of e-cards whenever is his friends birthday. Finally, a not insignificant issue relates to the means of payment. Indeed, as Ward (2000) cited in Duarte (2004) claims, electronically its only possible to use intangible methods of payment, which reduces the choices of the customer (if it wishes to opt for a one hundred percent electronic transaction). This is a real handicap for the Angola consumer, especially because the infrastructures for 31
electronic payment are not much developed. Additionally, the issue of payment in Angola depends of several factors, as a developing country, and in the process of recovering from a long war, the system of electronic payments is in the growing phase. Although, there is a growing number of people already using the electronic means of payment such as the ATM, still there is a need to mass consumption across the country. According to ANGOP (2010) the payment by debit card ATM was introduced in Angola in 2001. Today, the objective of the Interbank Services Company (EMIS) is to achieve this year, 75 % of the population for banking. With such a obstacle to overcome the operate of electronic payments through the Internet is very low in Angola. 2.2.3. Main types of Electronic Commerce According to Turban et al (2008:35) the major types of electronic commerce transactions are: B2B, B2C, C2C, m-commerce, intrabusiness commerce, B2E, c-commerce, e-government, and e-learning. In Angola the ones operating are B2B, B2C, m-commerce and egovernment. However, all of them operate with many limitations as the telecommunication infrastructures do not allow for major online operations. For instance the case of m-commerce, newer services allow to use SMS, MMS, phone banking, 3G technologies, and video conference but only to receive daily bank statements. Although, it is possible to surf on the Internet, it still not possible to make online purchases or major operations like bank transfers, also the mobile GPS services not work yet in Angola. However countries like South Africa , the pionner, it is possible to make purchases and perform online payments. Other African countries with such technologies are Ghana, Zambia, Uganda, DRC, Cote dIvoire, Nigeria, Tanzania, and Kenya (Twinomugisha, 2009). 32
2.3. Macroeconomic influence (Main Indicators) In Angola, there is the National Institute for Communications (INACOM) who is the body responsible to ensure regulatory and monitoring the businesses of providing telecommunications services, and to manage, plan and monitor the use of radio range all over the country (INACOM, 2010). 2.3.1. Telecommunications One of the primary objectives in the sector of telecommunications in Angola is the creation of a network structuring support for the development of the national telecommunications. For this effect, the Government has been supporting the creation of such infra-structure through the Basic Network Development Program (PDRB) (INACOM, 2010). Hence, with the commercial maturation of most of the primary commercial projects of the PDRB, it has been registered that year-by-year high growth rates related to the number of users of the telecommunication services (voice, data and multimedia), are booming in all the capital provinces, counties and communes of the country. 2.3.2 Services Access 2.3.2.1 Fixed network
According to INACOM (2010) in 2009, the provision of services (number of lines sold to the public in this segment and running for the clients), registered an increase of 28,65% over the previous year, resulting in an increase in teledensity to 0,77%. That represented a variation of 30,51% in relation with the previous year. That increment was also a result of the contribution done by the wire line telecommunication operators of the private sector. However, the achieved teledensity, was below the predicted (1,4). The reasons were as follows:
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There was registered a delay for the completion of the projects, which led to only 41% of accomplishment of the capacity of installation by Angola Telecom.
Merely 48% of the total existing lines installed in 2009 were put to service by the company that is, sold to the public (See table below). The causes were identified and will, probably, be exceeded with the start of the Angola telecom Restructuration process, which the preparation is actually in course.
Table 3: Number of lines growing rate
Number of inhabitants: 17.551.000 (1st semester of 2009) Source: Ministry of Telecommunications and Information technology in INACOM (2010)
Table 4: Geographical distribution of Users from the Fixed Network
Source: Ministry of Telecommunications and Information technology in INACOM (2010)
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In 2009 the fixed network was composed of users of Angola Telecom and from MSTelcom services providers. From the analysis of the table above, it can be verified that the utilization expansion of the fixed network in all provinces lacks a major growth, making the access throughout the geographic area of the country more equitable. This also means that, the growth tendency in Luanda in the range of 73% must be inverted through the adoption of appropriate political measures. 2.3.2.2 Mobile network In 2009, the number of mobile phone user grew by 19,72%. Consequently, the mobile teledensity reached 50,68%, which means a variation of 37% in relation to the last year (INACOM, 2010). Table 5: Mobile Phone Users growing rate
According to statistics from the (Inacom), cited in ANGOP (2010), at least fifty per 100 inhabitants in Angola uses a mobile phone. Of the 18 Angolan provinces, Luanda is having the biggest number of mobile phone users, with a percentage of 67, 23 (Table 5).
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Table 6: Geographical distribution of Users from the Mobile Network
2.3.2.3 Internet Although there is a growth of Internet service providers, it is a fact that the Internet penetration in the Angolan market is very slow. This phenomenon has a deepest connection to the also slow growth of the number of access of the fixed network available. Nevertheless, some improvements are slowly taking place such as the implementation of a national fibre optic backbone network, the privatisation of Angola Telecom and the possibility of licensing a third mobile operator in the near future (Internet World Stats, 2009). Table 7: Estimative of Internet users
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Table 8: Angola Internet Usage and Population Growth
On the other hand, according to the International Telecommunication Union (ITU) (2009) the number of Internet users by June 2009 was around 550,000, which represented 4.3% of the population. And although there is no exact statistics on the number of the populations (Domingos Pedro, General Manager of INACOM, 2010) the Census Bureau (2009) used for this study a number of 12,799,293 populations on 2009. 2.3.3. Introduction of Services According to the Mr. Domingos Pedro, General Manager of INACOM (2010), with the launching of the service Liga-Liga through the Infrasat, resulting of the implementation of the Telecommunications via VSAT, the Angola Telecom Business Unit managed to achieve the strategic goal of bringing basic services (at least four phone lines and one Internet access) to 455 locations by installing 626 VSAT stations. Therefore, it was possible to take telecommunications to a total of 155 counties that are integrated in the country (100% coverage) and to 300 communes (82% of coverage). The counties and communes from the province of Luanda were not counted. On the other hand, either the fixed network or the mobile network are installed providing services to all the provincial capitals, having already begun the process of extension of networks to the counties and important locations. The mobile 37
network penetration reached about 68% compared with the fixed network, slower by nature and several other constraints, that covers less than 43% of the municipal divisions. . Although the network is booming around these regions, still both networks serve less than 5% to the counties. Furthermore, Mr. Domingos Pedro (2010), affirms that with the introduction of the 3rd generation technology by the mobile operators, the Internet services penetration will grow exponentially allowing, technically speaking, to be accessed in any region served by this network. Table 9: Geographical Coverage
*Strategic goals was achieved ** Predominant coverage through the Liga-Liga (INFRASAT) *** coverage almost exclusively through the Liga-Liga (INFRASAT) Source: Ministry of Telecommunications and Information technology in INACOM (2010)
Table 10: Geographical Coverage by Services Network
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However, by 2010 there is an estimative of growth of the mobile network of 57%, indicating that the mobile network is a sector that is growing very fast in Africa while for the fixed network there will be only a growth of 2%, even lower than the Internet penetration rates. Table 11: Estimated market penetration rates in Angolas telecoms sector end 2010 Market Mobile Fixed Internet
Source: BuddeComm, (2010)
Penetration rate 57% 2% 4%
Back in a couple of years, the ITU (2004) cited in cellular.co.za (2004) already predicted that the mobile market was the fastest growing market in Africa and that represented a sign of sustainable economic growth. Nevertheless, it is important that there is transparency and open and clean competition but Angola is recognized by being a country with high indicators of corruption which delays the economic growth of the country. 2.3.4. Infrastructures Telecommunications constitute the critical infrastructure to the spread of electronic commerce. The access to quality digital and optical cables for high speed, linking urban access points with the rest of the world, makes the potential expansion of the Internet, along with new forms of access through cable TV networks and private networks alternatives to the public telephone network. INACOM takes in this area a major role, having been designated as the central supervisory authority, with responsibilities in all areas regulated therein, which accumulates with the function of the national regulatory authority for electronic 39
communications and postal services. However INACOM only have figures for the voice lines and data from fixed network and that represents a great barrier for electronic commerce or even the Internet to develop.
Table 12: Voice lines and data from fixed Netwok
Table 13: Backbone
*Data from the PRIT project Source: Ministry of Telecommunications and Information technology in INACOM (2010)
2.3.5. Evaluation of prices
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To gauge the accessibility degree of prices in the period 2007-2009, the mobile network was taken as the base, both for its number of subscribers as well as the penetration achieved. In general prices remained stable in the last three years. This contributed also to the fact that the price of the Units of Telecommunications Taxes (UTT) set by the regulatory body, through the committee of prices, has remained steady, earning during the period in reference AKZ7.20(USD 0.075). UNITEL, the major private mobile service provider, revealed itself as the operator that practices lower prices for the connections inside its own network (INACOM, 2010). In the fixed mobile connections and the connections between themselves the operators practice the same prices inside their own network. Considering that the UTTs price remained steady, the author can conclude that the operators are not using the UTT/minute as a competition tool. Table 14: Current rates per UTT
UTT Units of Telecommunications Taxes at AKZ7.20 Source: Ministry of Telecommunications and Information technology in INACOM (2010)
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INACOM (2010) found that the Average Revenue per User (ARPU-) of the operators had a decreasing tendency. Considering that the Unit of
Telecommunications Taxes (UTT) remained steady and that the variation number of clients was more than 107%, there was a gain for consumers of telecommunications services in respect to ARPU. Table 15: Average Revenue per User - ARPU - (USD/month)
2.3.6. B2B Influence According to Turban et al (2008) in B2B ecommerce all the participants are either businesses or other organizations. The more prominent Business to business (B2B) initiative of electronic commerce in Angola is the marketplace TradeJango, founded by the Angola National Oil Company, Sonangol E.P and it was created as an opportunity to optimize cost identified by the upstream sector (TradeJango Final report, 2003). With the evolution of the upstream business and the arrival of foreigner investments to Angola in the oil sector, it was considered opportune that is such context of growing expenses, the optimization of procurement process to result in the reduction of costs. The marketplace tradeJango defines itself as a digital forum that unites buyers and suppliers so that they can perform business transaction efficiently (TradeJango.com, 2005).
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The advantages for users are: Optimization of the internal purchase process of the buyer entities; More control over the purchases processes of the concessionary party; Fast information sharing between all the participants; Development of the Angolan economy through the promotion of the local content; TradeJango was possible because Sonangol is the National oil Concessionary and it has power to support such initiatives, however, although the oil operators who operate in Angola already use an international marketplace, Sonangol encourages them to use the local marketplace, as they already have much experience in that. TradeJango is a pioneer in the Angolan market and it expects to go further by expanding its geographical spectrum and with the implementation of services that could serve not just the local suppliers and buyers but also the local public institutions, government institutions and foreigners buyers and suppliers, always keeping with the B2B business model. 2.3.7. B2C Influence According to Turban et al (2008), the B2B includes retail transactions of products or services from businesses to individual shoppers. In Angola, at the Business to Consumer level (B2C), the experience comes from private initiatives and it resumes itself more for advertising of services because unless it is a public company initiative such as from TAAG, Angola airlines, the private initiatives do not have the support of online payments or even delivery of products. The consumers limit themselves to search for the website, choose the product, get the phone number and, depending of the product, make a call to perform the order. However, the consumer has to travel to the shop to get the product. 43
There are no records of B2C experiences in Angola, however the author experienced the new website form TAAG to make a flight reservation and buy a ticket and it works very well. It was a rare experience in Angola, because there was the use of the credit card and rarely Angola EC initiatives have such payment means. It turns out that TAAG marketplace is supported by A South African server. 2.3.8. E-Government Influence Angola has implemented a set of reform initiatives, particularly at the government level, in order to transform the high pace of the developing sustainable and integrated economic growth of the country. According to Leadership (2009), one of the pillars regarding this view of reform is the Public Procurement, reflecting the concern of the Government in the effective management of public resources and the increase of the transparency with its use. When integrated with other reform initiatives currently being carried out, it will result in a significant volume of annual savings and better allocation of resources on more initiatives to modernize and improve the functioning of the framework of Public Administration or in economic and social initiatives. In this sense, the Government of Angola has started a project of modernization of public procurement through the design and implementation of a National Program for Electronic Public Purchases [PNCPE]. This program has 2 major practical points of reference for ultimate goals to be achieved: Administrative modernization of Public Procurement, based on the establishment of sourcing strategies and negotiations centered on redefining the organizational structure and functions allocated to the Public Procurement, in modernizing its legal framework and the training of human resources allocated to this area;
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Technological change for Public Procurement, through the definition of an integrated technological model, opposite to the state equipment, and through the embracing of electronic tools by the national businesses to support the procurement process.
The National Program for Electronic Public Purchases (2009) created the following formula: Modernization of public procurement = Administrative Modernization + Technological Modernization According to Leadership Business Consulting (2009), the development of the National Electronic Public Procurement is a unique opportunity for achieving a set of high-level goals that will put Angola in a level of internal innovation and modernity, as well as it will contribute greatly to promote the image and dynamism of the country internationally. The work of designing the PNCPE which had the support of Leadership Business Consulting company included an analysis of international reference cases, including working visits of the Ministry of Finance team to some entities in Europe and South America. The knowledge obtained from this set of international realities related to similar initiatives, together with data on the Angolan government spending in recent years plus the expected challenges for the future, helped establish the following set of strategic objectives: (see figure below) Figure 7: Strategic Objectives of the National Program for Electronic Public Purchases (PNCPE)
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Generate significant gains in terms of savings and efficiency in procurement
Increase the quality of goods and services purchased
Increase the transparency of the government purchases
Promote the economy and the entrepreneurship
Promote the image of Angola at a Internationally Contribute to the modernization of the administration Promote the electronic commerce, the competitiveness and productivity of the economy
Source: Leadership Business Consulting (2009)
Aware of the importance of the adhesion of the economic agents to this initiative, the PNCPE has incorporated a set of measures to promote info-inclusion of business, with particular focus on small and medium Angolan companies, aiming to promote electronic commerce, its competitiveness and productivity of the economy in general. One example is the adhesion of the Ministry of Finance to the TradeJango portal, the first electronic marketplace in Angola, that is, TradeJango is an electronic marketplace aimed at bringing together buyers and suppliers in a digital forum so they can perform business transactions (Tradejango.com). Due to the innovation introduced by PNCPE and expected impacts, the ministry of Finance held in 2008 a pilot phase of a set of 10 ministries with the support of TradeJango where projects were implemented with the selection of a limited number of categories of goods and services. The event was a reverse auction which proved to be a huge success making the government reaches savings of thousands of dollars (Authors observation).
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As a result, the PNCPE initiative with expected impacts, decided to run until 2010 the pilot phase. During this implementation the impacts will be analyzed and the opportunities for improvement to be made to strategic review of the operation will be identified, to represent success during 2010. According to Leadership Business Consulting (2009) among the initiatives already undertaken to implement the test, they highlight the achievement of a set of procedures that will reach savings of around 7.86 million USD. These potential benefits are due primarily to a combination of two effects: The aggregation of needs and comparison of potential suppliers with a tendering process and a more open, more transparent and simplified, which together have reversed a considerable improvement in the bargaining power of the state. As mentioned above, these procedures have been performed by the Angolan e-marketplace "TradeJango", a platform that supports the acquisition procedures electronically. Beyond these quantitative benefits, there has been the continuing involvement of the Ministries comprised in this process in order to train them on new concepts and procedures for procurement. For Leadership BC, there are quite a few barriers that must be overtaken. Critical Success Factors Getting strong and continuous political patronage to the implementation of PNCPE; Timely implementation of initiatives, according to the defined calendar; Promoting inter and intra-organizational cooperation, in particularly with the custody of Ministry of Commerce, Employment and Information Technology;
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Program Management of the planned projects in PNCPE, as well as the monitoring of achieved results;
Ensure that the benefits are measured accurately in order to diagnose the success of the initiative;
And effective communication PNCPE.
2.3.9. Impact on competition of the market 2.3.9.1. National At a national level, the more prominent initiative of electronic commerce is the TradeJango. According to its final report (2003), TradeJango is an eMarketplace, created with the purpose to facilitate the business of upstream companies with the local content or suppliers. It is the first initiative of the kind and its sponsored by the National oil company (Sonangol). Its mission is to be the Angolan eMarketplace that promotes and supports commercial relations between companies operating in Angola, always contributing to the sustained development of the marketplace. (TradeJango.com, 2009). Although TradeJango is in the market for 3 years, it still did not reach the level of recognition it deserved. For such a new business the author believes marketing and dissemination of information is crucial to get everybody involved. 2.3.9.2. International While in the developed countries e-commerce has slowed down, in the countries with a weaker economy the virtual economy only starts to develop. When facing the comparisons of electronic commerce in other developing countries, the challenges are very similar. According to Hawk (2004:182), such challenges are mainly the lack of telecommunications infrastructures, lack of qualified staff to work with such technologies, lack of timely and reliable systems for the delivery of goods, low bank 48
account and credit card penetration, low income, and low computer and Internet penetration. Hawk (2004: 182) goes further referring to the challenges saying another other issue is concerned to the cultural barriers, some countries still do not accept well the ecommerce as a way of doing business. Some cultures like India view the face-to-face sell as a very important part of the selling experience, the same happens in Angola with the majority of the population. Although in Angola a small elite is prepared to buy and sell online, they seem to forget that their possible consumers are mostly illiterate. Therefore it will be a long journey to change such behaviour. Another challenge referred by Hawk (2004;182) is the lack of legal and regulatory systems to provide security while doing business online. 2.4. At Corporate Level A successful organization must have consumer-oriented action (Shankar, 2002), which have a positive attitude towards the company and are willing to buy their products and remain loyal for a long time. Also the overall performance is important, and a joint assessment of key factors such as site traffic and pricing, the revenues, profitability of the company and the shareholder value created. However, at a corporate level, some companies have the possibility to think of its internal public also, that is, with the intranet. This is a way for the company to manage the individual information resources (Turban et al, 2008:30) For instance, Sonangol, the National oil company of Angola, has a corporate portal which is a gateway for customers, employees and partners to reach corporate information and to communicate with the company (Turban et al, 2008:30). There employees have the opportunity to access company internal news, training sessions available, the history of the company, all the affiliates, the Data package available for block concessions, public bids, etc.
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However for a company that performs sales online it must work according to several perspectives for it to be successful. 2.4.1. Perspective of Product and Diversity The success of electronic commerce is undoubtedly generated by sales. Dube (2002) found a study conducted among students of its University that its best selling products were, in descending order, music, books, travel, software and clothing. Also Lim (2000) states that the best selling products on the Internet in various countries, in the end of the nineties, were computer hardware, software, books, music and travel. Ward (2000) cited in Duarte (2004), using the "GVU's User Surveys (Table 16), concluded that at the end of 1998 (the date of the latest survey from GVU), products / services consumed were computer equipment (hardware / software) investments, music, books, magazines and tourism. An analysis of its data also shows that there has been significant progress during the second half of the 90s in the number of people with experience of online shopping; being that with products like the music there was a growth of almost 400% in three years only.
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Table 16: Table summary of "GVU's User Surveys

Categories GVU3 Apr 95 GVU4 Oct. 95 GVU5 Apr. 96 GVU6 Oct. 96 GVU7 Apr. 97 GVU8 Oct. 97 GVU9 Apr. 98 GVU10 Oct. 98 37,40% 44,50% 54,50% 42,30% 20,50% 43,40% 55,30% 43,70% -
Computer Hardware (<$ 14,90% 11,50% 11,80% 16,10% 23,10% 18,50% 30,40% 50) Computer Hardware (> $ 14,40% 12,20% 13,70% 19,40% 26,50% 21,80% 33,30% 50) Computer Software (<$ 50) 28,40% 24,20% 28,60% 31,10% 37,40% 29,00% 42,00% Computer Software (> $ 18,10% 16,20% 19,20% 21,70% 28,50% 22,50% 36,20% 50) Appliances (<$ 50) 4,50% 3,80% 3,00% 3,80% 6,90% 7,40% Appliances (> $ 50) 4,30% 4,30% 3,60% 5,30% 7,10% 7,70% Legal Services 1,50% 0,90% 0,70% 1,40% 1,80% 1,70% Food 2,40% 2,10% 2,70% 2,80% 3,60% 4,30% Investment 8,90% 7,30% 6,60% 9,60% 11,40% 11,10% 13,00% Videos 4,80% 4,90% 4,80% 5,80% 8,40% 10,00% Music 11,20% 10,10% 10,30% 14,40% 20,00% 20,40% 42,00% Books / Magazines 13,70% 11,80% 15,80% 19,10% 28,60% 30,40% 53,60% Concerts 3,10% 4,10% 3,60% 5,40% 7,90% 9,70% Tourism 14,80% 23,00% 26,80% 28,50% 35,90% Apparel and Footwear 4,50% 5,00% 7,60% 10,90% Internet Services 35,50% 40,60% 39,60% 33,60% Sunglasses / Jewelry 2,60% 2,40% 3,70% 3,30% Percentage of respondents has purchased online in each of the categories of products in each of the GVU surveys. The monetary values are expressed in U.S. Dollars. Source: Duarte, 2004
According to Ward, products that will benefit from greater online success, tend to be those that minimize the transaction cost and these costs are either the price of the product itself or other non-monetary costs (e.g. time needed to purchase the product, search time of the product, assumed risk, pleasure at time of purchase). This fact suggests that certain characteristics will influence the sale or not of a product online. Besides the product itself, also the variety of choice was reported in some studies as an important factor in the decision making process of consumers to purchase online (Girard et al., 2002). In Angola the spectrum of the Internet is quite low yet, however there are emerging small businesses focused on fast food delivery such as sandwiches, 51
pizzas, soups, salads, etc. But, the margins associated with these products is generally low, if not negative and the frequency of buying these products online is not very high therefore the seller just utilize such means to reach a broad range of consumers. The author believes that in a near future that may happen because of the high prices that local entrepreneurs have to face to rent or buy a physical store; they may turn to the new technologies as soon as they discover the benefits of the electronic commerce. Furthermore, consumers tend to purchase "simple" goods online with low value per transaction, such as books, music, toys, computer software, videos, travel and Internet services (Ward, 2000 & Bughin, 2001), and there are products much more important in Angola to be bought than just that type of products. Thus, the margins associated with these products is generally low, if not negative and the frequency of buying these products online is not very high (Bughin, 2001). Still, concerning the products, several authors have studied the question of what types of products that would be more valuable in terms of Electronic Commerce. Girard et al. (2002) for example, noted that products such as "Research" are easier to sell online because it is possible without direct contact with the product to determine exactly what are the characteristics and suitability to consumer needs. Associated directly with this issue is the tangibility of the products, since these products, are generally capable of remote evaluation, they also have the advantage of being available without physical contact, or to "materialize" themselves in the form of services or by constitute information (Kiang et al, 2000), thus avoiding the delicate logistical problems that arise with the Electronic Commerce of physical goods. Peterson (1997) thoroughly studied the issue and proposed for each of its product categories, the decision more likely than consumers in terms of acquisition or 52
not a product in a store of electronic commerce Internet. Low cost products and frequent purchased, give advantage to traditional retailers because unless the customer makes purchases in mass, there are economies of scale in traditional retailing that are not applicable to the Internet retailer. However, if the value proposition is intangible or is based on information, the advantage is the Internet retailer, as it benefits from large economies of scale due to the digitalization of content. Expensive products and of occasional purchase in theory have a good chance to be marketed via electronic commerce, taking into account that the cost of delivery will represent a smaller proportion of the final price. Leaving the decision weighting on other aspects such as the fact that the product lacks a preview examination, a situation in which traditional retailers can take advantage (Figure 8).
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Figure 8: Sequence of tendency of consumer decision

Dimension 1 2 High differentiation potential Dimension Dimension 3 Sequence of tendencies of consumer decision (Eg wine, soft drinks, cigarettes) decision taken by a trademark search after a shop. Not likely to research online. The purchase will probably be in a store. (Ex: milk, eggs) decision taken by a trademark search after a shop. Not likely to research online. The purchase will probably be in a store. (Ex: Newspapers and magazines online) the brand choice is made after research on the Internet. Later research in retail is unlikely. Acquisition is likely to be online. (Ex: Quotes of grant) the brand choice is made after research on the Internet. Later research in retail is unlikely. Acquisition is likely to be online. (Ex: Sound Systems, automobiles) the brand choice is made after research in both channels. Price comparison on both channels. The acquisition will be conducted in either of the channels. Take into account the need to inspect the products may influence the decision in this case. (Ex: Precious metals known weight and purity) the brand choice is made after research in both channels. Price comparison on both channels. The acquisition will be conducted in either of the channels. (Eg software packages) the brand choice is made after research in both channels. Price comparison on both channels. The acquisition will be conducted in either of the channels. In the future the Internet could become more convenient to make the delivery of these products. (Ex: Car Financing, insurance) the brand choice is made after research in both channels. Price comparison on both channels. The acquisition will be conducted in either of the channels.
Value proposition tangible or physical
Low cost, high frequency of purchase
Differentiation potential of low
High differentiation potential Intangible value proposition or information Differentiation potential of low
High differentiation potential
Intangible value proposition or information
igh cost, low frequency of purchase
High differentiation potential
Intangible value proposition or information
Adapted from Peterson et al. (1997)
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Chi & Kiang (2001) analyzed the proposal of Peterson and rated the products of a sample of insolvent companies after the Internet bubble period. From this sort of fact they could conclude that there were categories that were clearly more affected by the economic failure period that followed the bubble. The categories of Peterson with more bankruptcies were: Tangible products with low degree of differentiation and infrequent purchases (e.g., gold bars); Tangible products with low degree of differentiation and shopping frequency (e.g., milk, eggs); Products not tangible, low degree of differentiation and infrequent purchases (e.g., insurance and finance). In terms of product variety, consumers seem to prefer shops with a great choice, since studies suggest that stores with greater variety of products have more visitors (Lhose & Spiller, 1999). An example happen with the opening of the first and actual only shopping center of Angola, Belas Shopping, located in Luanda. The affluence of people revealed larger after years of buying in free markets as the biggest markets with a wide variety of products for consumers. Apparently, consumers have an idea of products that can find in every store and when they are looking for something, they head to the stores with large catalogues. Moreover, in other studies (Lhose & Spiller, 1999), a third of retailers have expressed disappointment at the limited supply of existing catalogues. It is also noteworthy that although the size of the store does not affect the volume of sales. More products attract more consumers, but not a higher sales volume per customer. 2.4.2. Perspective of Interface, Performance e Functionalities The user interface of an E-commerce shop is a fundamental key to its success, according to the users themselves (Dube, 2002). The author agrees with 55
that particularly because in Angola the Internet velocity is quite low and sometimes even intermittent which makes the lighter interfaces a more comfortable and fast way of using the Internet. In fact, the simplicity and convenience of using a CE shop is the most important factors to induce customer satisfaction (Shim et al., 2002). A well designed site, according to these authors, should take into account the following factors: High speed navigation, taking into account either the time each
page takes to be seen whether the number of clicks needed to reach the information - simplicity above all, was the idea conveyed by the users of the study; Placing in an accessible location the return policy, company
contacts and service level. Failure to do so users quickly leave the store without making purchases; Represent in a pleasant and informative way the company
products, including using technology with moving images and sound for demonstrations. There are studies that go further, leading researchers to conclude that the interface, especially the listing of products is the main factor affecting the increase/decrease in monthly sales of a store of Electronic Commerce, contributing 61% of its variation (Lohse & Spiller, 1999). For instance, the author worked in the first electronic market in Angola, TradeJango, and it was noticed that one of the services that were very welcomed was the electronic catalogues. A list of all the products of the seller in a unique repository, complemented with prices and product specifications, an innovation not so common locally which made the buyers very interested. The introduction of additional product information such as price, image and more descriptive information, were the aspects that had the greatest impact on 56
sales. One reason for this is indicated by Gefen (2002), observing that consumers tend to trust the sites where the navigation is simpler and cleaner interface. This study was not the only one to find this relationship, referring also to other studies such as Nielsen, which found that only 42% of cases consumers were to find the information they wanted and that 62% of users gave up searching for the wanted items to purchase online. Faced with these overwhelming data, it is surprising that 95% of the stores in 1998 had no links between related products (Lohse & Spiller, 1999), since the existence of links to help find relevant information about the product and helps to make cross-selling between products. However, today things are different, for example, the sale of a camera always have a link to purchase accessories such as batteries and a variety of lenses. This study refers that the number of links in a store is responsible for 10% of the variance in monthly sales. As such, it is recognized that an essential feature for the success of any computer application is the quality of the system (Molla & Licker, 2001). Meaning, by analogy, that an online store (which at the end is nothing more than an application) should satisfy the following characteristics: Stable performance; Good speed access and use; Friendly user interface and simple to use; Fast to use; Flexible; Reliable; Visually pleasing; Accessible 24 hours a day. 2.4.3 Perspective of the Geographical Location Much has been advocated in recent years that the location would no longer be relevant, given the fact that the Internet had a global reach. However, studies indicate otherwise. The geographical location remains essential at various levels. The first aspect that the geographic location is important relates to cultural issues. A company must know the characteristics of markets where it operates and adapt to it which at the outset in this respect the local companies have an advantage (Chau et al., 2002). 57
Consequently, a company that wants to be successful in both markets must adopt different strategies for each. Steinfield & Whitten (1999) have an uncertain view on the subject of the importance of geographical location on a strategy level of Electronic Commerce. These authors analyzed the local companies with a presence at the Electronic Commerce on the Internet and tried to distinguish the problems and consequences of that presence. According to these authors, companies typically go online in order to gain access to distant markets, but many are poorly prepared to deal with these customers and therefore fail. The geographical location it is important at this level because it is both a limitation for those who want to enter more distant markets and an advantage for those who have presence in a market. It is possible for local companies to adopt strategies that give them competitive advantages over its competitors, namely using local contact networks and the trust that local customers put on them. According to Steinfield & Whitten (1999) possible strategies for a local company are: Trust - The lack of consumer confidence is often one of the reasons for failure of electronic commerce. And in Angola, the existence of a shop in the town where the potential customer lives is one factor that inspires confidence especially because culturally the consumer is used to purchase in the stores and is the means more accessible to make purchases. Further, because the retailer may belong to local groups such as church, volunteer organizations, etc..; Consumer Needs and Behaviour - The existence of a local store is an advantage at different levels in terms of satisfying consumer needs. The store is a point for receiving of returns, something that stores like Amazon can not have. 58
Through the local store is also possible for the consumer to experiment or test a product, or even go get the product he/she saw in the online catalogue, thus closing the lack of confidence or satisfying the need to have the product immediately; Complementarities - the local shop can create additional promotional activities, offering coupons to encourage customers to visit the local store. It is also possible for the seller to use the web channel to sell products that he does not want to put at reduced prices in the shop. The Internet can also be used to advertise online events taking place in the store (e.g., literary events at bookstores) or special promotions. Other examples of complementarities is the provision of technical assistance to customers who made purchases online, at the local store or even the availability of online information, supplementing the product purchased; Local Knowledge - Given their local knowledge, it is possible to sellers in a given region to use this knowledge to give themselves an advantage compared to sellers nationwide and internationally. For example, they can adapt their sites to custom local language, they can deliver products of regional interest that can not be found in other shops, they can use well-known figures from the local level, among other strategies that make the store be more appealing to potential customers region. 2.4.4 Perspective of Logistics and Delivery capacity One of the keys to the success of a business area of Electronic Commerce is a good logistics (Krovi, 2001). The logistics of a B2C E-Commerce site is very different from what companies are used because it is completely different the satisfaction of millions of small packets, destined for the final consumer and the implementation of a "reduced" number of large orders, designed to the distribution centres and retailers (Krovi, 2001). 59
Lee and Whang (2001), proposed the following strategies to not to miss what they call "The Last Mile" of Electronic Commerce: Direct Transmission - One of the problems of logistics, currently, is that due to supplier networks are often committed to genuine irrationalities in transportation and logistics, making a product goes from Angola to Portugal and back again to the country. To fill this gap, there are already techniques of "logistical delays" that allow the products to be shipped directly to the warehouse closest to the customer, and only this warehouse aggregates an unique order only; Transit Warehouse - Another interesting technique is when you work with deliveries to companies, who order regularly, but who only know what they really need when the order is already on the road. The solution adopted by some logistics operators are shipping the best possible forecast of customer needs in a given region and assign the products to customers only when it is reaching the destination; Dematerialization - There is often movement of physical products that can be replaced by sending the information directly via the Internet. Examples of the adoption of such strategy is the replacement for physical catalogues online catalogues or transmission of software via the Internet, replacing the previously used physical supports; Resource exchange - At industrial level, it is possible to attend to the geographic location of a competitor to make an exchange of resources. For example, it is possible for the producer of cement A to ask to the competitor producer of cement B who is closer to a client of the producer of cement A to make the delivery on behalf of the other producer of cement A in exchange for the execution of a delivery to a customer of competition in the vicinity of the factory of the producer of cement A. Other examples of resource exchange are the use of independent logistics operators that make the aggregate needs of various retailers; 60
Aggregate Delivery - Another technique that reduces cost is the aggregation of supplies, to reduce the cost of individual deliveries, which often is too high due to lack of sufficient supplies to be held in the area concerned. The strategies to be adopted, can pass through the aggregation of supplies only one day of the week or by granting to others the task of delivery at local level; Use of brick-and-mortar models - often the cost of delivery to the customer's home is just too high. However, the company has physical stores nearby, or is able to partner with companies that have them. The company may then choose to proceed with the delivery of products in local shops, asking the client to do the same collection. These same stores can also be used to receive refunds, which also allows the reduction of transport costs and improve customer service, also it allows the correct packaging of devolutions and often the immediate replacement of defective products. 2.4.5 Perspective of Promotion The promotion of a good or service is a factor contributing to the success of an operation of Electronic Commerce, as unaware of the store, the customer will hardly go there. However, the sin of businesses is often just bet too much on promoting, ignoring the other factors needed for successful operation. According to Bughin (2001), there is a difference between firms that have adopted a strategy of mass to be successful, and that was in fact, and those that are not profitable. Looking at their accounts, the author comes to the conclusion that the non-labour costs, on unprofitable companies were on average seven times higher than those of successful companies. Since a good part of this were costs of communication. Also according to Bughin (2001), the spending on communication in relation to the total revenue, were 181% for non-profitable companies and 10% for profitable 61
businesses. These higher expenses led to 13% more visitors, but on the other hand, meant a higher average expenditure per visitor by 52%. That is, profitable companies are those that convert its visitors into buyers and simultaneously manage to attract more visitors with a reduced communication cost. It should be noted however, that largely profitable companies require less promotion, because they have behind "brick-and mortar" companies that help spread their brand to attract customers (75%) and retain customers (although they have fewer visitors, their customer base is, according to Bughin four times higher on average). The issue of promotion is as apparently fundamental to the success of an Electronic Commerce company, at least in terms of the B2C market. However, more important than doing the promotion is to have no communication costs in excess, because if you do, the company is likely to be incurring costs that will not recover. Ideally, companies should make alliances with successful companies that already exist (or be "branches" of these) in order to reduce marketing costs, either through savings on brand awareness, or through promotion in 'real' institutions thus reducing costs of space rental for promotion. 2.4.6 Perspective of the Brand and Loyalty Numerous studies refer to the necessity of having a good brand and other mechanisms that generate confidence, as crucial to the success of an operation of Electronic Commerce, due to the fact that the established relationship is a relationship at a distance. In the long term, to succeed, every online business will have to instil confidence in their consumers (Urban et al., 2000). Trust affects not only the B2C commerce, but also B2B, given that 51% of companies, according to a survey conducted in 2000, would not do business with 62
potential partners who did not trust. Even confidence is important because it helps predict satisfaction, reduces uncertainty, it is a control over the organization and a mechanism for reducing transaction costs (Shankar et al., 2002). Trust is also an element that helps in customer loyalty, primarily because it creates a psychological barrier to change, since the costs of switching to another supplier involve having to leave a relationship in which they have confidence and move to another in this not yet (Gefen, 2002). There is, however, to expect miracles. Confidence is a factor which may help raise and keep customers, thus increasing the number of sales. The trust has not yet capable of increasing the average volume of individual sales (Swaminathan et al., 1999). Even as consumers gain experience in the purchase via electronic commerce, they realize that the issue of security is not as important as thought, but are beginning to attach greater importance to the protection of their privacy (Swaminathan et al., 1999). According to Shankar et al. (2002), trust was initially seen as a mere security issue, especially with the exchange with the seller, of data such as credit card information. These questions could "easily" be solved by implementing encryption system. By easily the author mean only for the developed countries because for the developing countries such as Angola, the issue of encryption is still a means to be implemented and developed. By the time the portal TradeJango.com was implemented, this issue was raised and considered to be implemented in the legislation and to be protected by law but the process still running and even for the telecommunications this subject revels not completely covered but the government is optimist and according to Mr. Domingos Pedro, General Director of INACOM (National Institute of Communication). Subsequently, trust was seen as related to privacy issues and pertaining to the respect that the companies had with the data the 63
customers delivered to them. Finally, nowadays, the trust covers both aspects, but much more because the client must have confidence in the supplier, not only in the initial phase of the buying process, but also that the product will be delivered with the agreed price on the terms agreed upon and that any problems will be promptly resolved later. This is another point that is not necessarily applied by all the companies in Angola. Many times the Angolan news exposed situations of big companies that sold expired products or imported them from doubtful sources. However, the confidence in this light can be divided into trust off-line, i.e. all that that involves all the offline activities of the company with its customers and stakeholders and confidence online, which is all that which is, related to its online activities, including the operation of the store. 2.4.7 Perspective of the service Excellence in service is a factor often cited as being fundamental to the success of a company. However, according to the existing literature, the crucial factor it to offer the right amount of service and avoiding incurring to costs that do not bring added value to the customer. The Angolan market is growing faster in the last couple of years, after the end of the war. This situation brings issues such as the creation of new business ventures, the innovation of others and also the fast decline of some others. The common factor of between them stills the low or non-existing competition. The low or lack of competition promotes the creation of monopolies and lack of options for consumers as such this companies may provide their services as they want and consumers will always buy it. The existence of competing avoids the arbitrary fixing of prices. In a situation of perfect competition, price is established according to market conditions and tends to remain at levels close to the cost of producing the goods. But, a monopolistic business, in contrast, can increase its
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overall profit by simply raising the price because it dominates the offer and it is not threatened by competition. A service that is typically provided by the electronic commerce is the accessibility of content. The contents can be divided into two major groups, the contents that are designed to inform customers about the features of products and services rendered, and the content that serve to entertain or provide additional information to the client. The latter have no necessarily a direct relationship with the products that the customer will purchase (e.g. in a mountaineering shop provide online travel guides). For contents directly linked to products and services offered by the company, Molla & Licker (2001) are clear, this is an essential characteristic and valued by customers, contributing critically for its satisfaction. The user of an electronic commerce shop expects to find in it detailed information on products and services needed as well as information on the procedures of the company. When the customer does not find this information, usually leaves the store and passes to the competition. Have content that is created with the aim of being an "appetizer," despite being very common and present in most stores, has no significant effect on sales and number of visits (ly & Spiller, 1999). There are cases where customers do not even seek such information and when to seek this has no impact on the probability of making purchases. Also the customer support is an important factor in meeting this and creating loyalty, Molla & Licker (2001). The client expects to be satisfied throughout the life cycle of the transaction (before, during and after the sale). Can be considered examples of support services: artificial intelligence (the system remember the client, adapting to their characteristics and help you in your navigation), search capabilities relevant to answer customer questions, calculators, converters of hard 65
currency, state control of the order, maintenance of account, alternative payment, cancellation and refund orders and lists of frequently asked questions (Molla & Licker, 2001 and Swaminathan et al., 1999). 2.4.8 Perception of the Price The price is one of the variables of marketing mix and a variable that consumers consider to be lower when purchasing on the Internet. In fact, nowadays, what consumers wait for the services on the Internet is for it to be free and the products they buy to be cheaper than in ordinary shops. In fact, according to Dube (2002) most consumers regard price as their reason for buying products over the Internet, ahead of variables such as quality and service. Such conclusion is shared by Swaminathan et al (1999), which consider being the price competitiveness, the ability to cancel orders, the access to information and reliability, important variables that determine the frequency of purchase over the Internet. But apparently, one thing is what consumers say and other thing is what they practice. In practice, the frequent or occasional EC Internet consumers are no longer as much as sensitive to the price that not-Internet consumers are (Li et al, 1999). Consequently there will be a tendency for consumers to prefer the Internet whenever it has lower prices but not in a much different way than choosing to shop in a cheaper traditional store over another more expensive. The price sensitivity between channels will therefore be determined by the costs that customers find in each channel (not necessarily monetary costs), especially if consumers have a broader optional choices. As referred previously there are most suitable products to the Internet than others, that is, there are products in which the Internet can be more competitive than the traditional stores and others where the reverse is true. It will be the clients mind 66
to do the math, adding the costs of the product, being it both non-monetary and monetary costs. For example, transport costs and travel have to be accounted for. Also, It will be recorded that when purchases are made online the customer have to wait several days to receive the product or the need for physical inspection of the product and consumer familiarity with the product (Janse & Noll, 2002 ). A client can only make a purchase online if the theoretical price that makes the product, adding the actual cost, with the non-monetary costs is lower than the theoretical price of purchasing goods in a physical store. The competition however is also a factor to take into account because, even though electronic consumers are not such price-sensitive as the consumers in-store sales, the reality is that they are price sensitive and the Internet is now a place where the war price is almost permanent. But it must be kept in mind about the monopolies in Angola. The monopoly thanks to its market power harms consumers by restricting the production and variety, and forces to pay prices arbitrarily fixed by the monopolist. Its important to note that the lack of competition could be detrimental on the reduction of costs and lead to underutilization of productive resources. A comparative study between the various forms of business placed the purchase on the Internet behind the purchase in the physical store and catalogues shopping, in terms of time spent to buy a given product. That is, this is another cost burden to the purchase of products via electronic commerce on the Internet. The perception that e-commerce stores should be priced significantly cheaper than traditional trade stores is closely linked to the Theory of Value Chain, as initially it was assumed that electronic commerce would eliminate intermediaries (Palmer, 1997), however, not necessarily in all situations. For example, in the world of electronic commerce, delivery costs are a factor to take into account almost always 67
for physical products. Products whose transport is complicated by always end up seeing your transaction cost increase (Ward, 2000 cited in Duarte, 2004) and this is a situation that holds back the developing countries. 2.5. At Consumer level One factor that will never be overlooked in the implementation of an electronic commerce operation is the user/consumer. The user satisfaction is always the ultimate goal, as it will eventually define the success or failure of the operation. As already mentioned, one element that must be considered is the interface of the system, as this is, in the absence of human contact, the main link between the potential customer and the company, and it is vital for the satisfaction of the first and the success of the second (Molla & Licker, 2001). This is why its important to pay special attention to the use that users give the system, because like other information systems, this is one of the most relevant indicators for success that the system may have in the future. But not only is the system that has to be adapted to the user, is also the user has to feel comfortable with the system. Using the Internet (or other electronic channel) to carry out procurement of goods and services requires not only resources but also requires knowledge about the functioning of the channel, that is "Internet literacy" (in case of Internet stores.) Consumers first have to go through a learning curve before adopting a new channel and the shape of this curve is even different, according to the consumer (for example, one must take into consideration the age of the potential consumer). Consumers with greater knowledge of the Internet feel more comfortable making purchases in a shop online than newcomers to the Internet world (Li et al., 1999 and Kwak et al., 2002).
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Also factors intrinsic to the consumer such as the need for experimentation, education, gender, need for social interaction and income, affect the likelihood of a consumer buying online (Li et al., 1999 and Swaminathan et al., 1999) Because of this, a successful e-commerce store must always take into account the characteristics of its consumers, verifying that they are "compatible" with the purchase via the Internet (or via the system in question). Even the purchases made in the stores are a great risk for consumers because although there is an entity called INADEC (National Institute of Defense of Consumers) it does not goes totally into defense of the consumers mainly because of poor infrastructures and conditions to do it.
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CHAPTER 3 RESEARCH METHODOLOGY 3.1 Profile of Users This research used a sample of 200 respondents, being the research instrument, a questionnaire consisting of 19 direct questions and 2 open questions. Unfortunately some of the questions of the questionnaire were quite subjective and could not provide an obvious result to the research and also important questions like sex and age were left out by mistake. However, the research comprised both adult men and women. The sample selected by the author derived from the database of contacts, clients and interested parties who were contacted via e-mail inviting each and every user to answer a questionnaire. Participants were advised that the aim of this survey was to collect data on Internet usage and electronic commerce usage in Angola. Plus that these data were necessary to analyze the growth of Internet and the adoption of electronic commerce in Angola in contrast with making purchases in the conventional or traditional way, to evaluate how their behavior could influence the economy of the country. The results of such answers can be used to estimate how the profile of Internet and electronic commerce users can influence the Angolan economy, that is, if the developed countries have strong economies which are growing each day with the use of the electronic commerce, with such experience the developing countries could design strategies to follow the steps of the developed countries, not deviating from their countries realities. The author chose randomly individuals who are professionals in the Angolan market as well as university students. The students where chosen as most of the employed individuals are also students and as such it was important to consider that 70
some could just be students. Following the chosen participants are from middle class thus it is probable that they have favorable conditions such as bank account, credit cards, personal computers and speak more than one language. The participants were located all over Angola and some where abroad temporarily. However, it was imperative that the participants had a wide knowledge of the Angolan reality; therefore it was not accepted Angolan individuals living abroad for more than 5 years. Some of the participants are interested parties since they work or worked with electronic marketplaces in Angola. As the method was a questionnaire sent via email, the author also performed interviews; the interviews were more for the most important and busy people that would leave the questionnaire behind for later and would forget ir. Such type of participants also could provide more reliable information and because of their management positions. The type of questions was focused on the questionnaire but as the interview got along the information became diversified and quite satisfactory also. 3.2 Theoretical Orientation The theoretical orientation is the triangulation method which is a combination of methods, qualitative and quantitative. With the quantitative approach the author attempted to calculate the percentage of users of Internet, their qualifications, the accessibility levels in Angola to determine how it could affect the performance of the economy. The quantitative information was based on the interviews and served to compare with the qualitative results. The author of the dissertation was a collaborator of TradeJango, the first electronic market in Angola since it was a project till its implementation and full 71
operation therefore the knowledge about the subject is one of the best in the market. All the contacts made through this past 5 years of experience served to be able to provide valid background information and support on future predictions. The personal interviews were in a structured manner created by the author so that the interviewers could be able to give the information instantly, openly and with more confidence. The fact that the author was a collaborator of TradeJango did not implied for the main focus to be the TradeJango but the experiences acquired in such technological environment developed in a developing country provided the author with a more significant point view that can provide the research a high degree of validity and reliability. 3.3 Survey Design Time factor is a major constraint, when it comes to the process of data collection. In fact, it is required that the data should be collected over a relatively short period, so as not to jeopardize the completion of a dissertation within the deadline. Therefore, the use of a timely and effective tool is required. The use of email is the chosen method because it presents a very high response speed and is superior, when compared to other methods of data collection (Kiesler and Sproull, 1986 cited in Fortes & Rita, n.d)). The next decision that was taken has to do with the type of e-mail to be sent: simple email with a questionnaire inserted in the message as an attachment (word processor or another specific program) or a link redirected to a website with the questionnaire attached. Weighing up the pros and cons of each method and given the lengthy questionnaire which, makes it difficult to both cut and paste it to a mail message or attach it to a file, the author therefore opted for the use of an e-mail that contained a link to a website built specifically for that purpose. 72
In that sense, an e-mail was sent to respondents with a link redirecting them to the following website where they could find the questionnaire:
https://www.surveymonkey.com/s/candidadissertation2010. To find the questionnaire the user simply needed to click on the activated URL in the e-mail message. The site contained a form for answers to the questionnaire. In addition to that, the e-mail had a presentation and description of the objectives of the study and the respectful thankfulness. However, it would be possible to quit or abandon the questionnaire at any time. Yet, it would only be possible to proceed to following questions if all previous ones were completed in full. In the process of filling the form users had the opportunity to check and rectify any of the answers and to move back and forth in the available pages. The site was linked to a database SQL (Structured Query Language) that stored all the answers and ensured total confidentiality of users, as they do not contain any mechanisms of association with them. In formatting the website, guidelines were set based on simplicity, clarity, pleasantness, functionality and ease of response. Once the questionnaire was completed, a thank you message appeared for users as a sign of appreciation for the time dispensed in the questionnaire. When the deadline proposed by the author was reached, the author gathered the information from the server and chose the best presentation of results as proposed by the site. Unfortunately the questionnaire allowed participants to skip answers and that biased the results.
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CHAPTER 4 RESULTS OF RESEARCH FINDINGS

4.1 Summary of the Survey Results 4.1.1. Background information By inquiring the participants about their background information, the author expected to know what were their employee status and the consequent use of Internet. Figure 9: What is your status?
S E CT ION A : B A CKGR OU N D IN FOR MA T ION 1. W ha t is y o ur s ta tus ?
21% Employee (middle level) Employee (department head or higher) Student Both student and employee 24%
7%
48%
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In addition, the author expected to obtain results on the literacy level that were most adequate to make use of the Internet and other technologies in Angola. Figure 10: Do you think the literacy level in Angola is adequate to allow citizens to easily access Information and communication Technologies?
D o y o u think the lite ra c y le v e l in A ng o la is a d e q ua te to a llo w c itize ns to e a s ily a c c e s s Info rma tio n a nd Co mmunic a tio n T e c hno lo g ie s ?
21%
Yes No
79%
4.1.2. Information and communication technology (ICT) By inquiring about the Internet means of access the author expected to analyze the existing connectivity in Angola. Figure 11: How do you normally access the Internet?
S E CT ION B : IN FOR MA T ION A N D COMMU N ICA T ION T E CH N OLOGY (ICT ) 3. H o w d o y o u no rma lly a c c e s s the inte rne t?
10% 29% LAN Cellular phone ADSL Broad band (cable, etc) 3% 48% 10% 3G card
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By inquiring about the Internet costs the author expected to analyze the factors that may influence or detract the consumers of using the Internet in Angola. Figure 12: What is your opinion on the cost of accessing Internet in Angola?
W ha t is y o ur o p inio n o n the c o s t o f a c c e s s ing inte rne t in A ng o la ?
2% 18% 39%
Too costly Costly Moderate Low
41%
By inquiring about the development of Information and Communication the author expected to analyze one of the influencing factors that detract consumers to access the Internet and also the influence of such factor on the development of the economy. Figure 13: How well developed are information and communication technologies in Angola?
H o w we ll d e v e lo p e d a re Info rma tio n a nd Co mmunic a tio n T e c hno lo g ie s in A ng o la ?
5%
0%
12%
Very well developed Well developed Poor Very poor
83%
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One of the most important issues for the author was to analyze the major obstacles to Internet access since these factors represented a high percentage of the problems that influence the development of the Angolan economy. Figure 14: what do you think are the major obstacles to access Internet in Angola?
MAJOR OBSTACLES TO INTERNET ACCESS 70 60 50 40 30 20 10 0 Poor infrastructure High cost Education Energy Other 36 27 10 12 % 62
It sounds essential to evaluate how frequently the consumers use Internet to make purchase, since it will be the one of the main parameter allowing the author to analyze the penetration of Internet on consumers habits and behaviors. Figure 15: How many times per week do you make purchases in a sales store?
S E CT ION C: P U R CH A S E S - CON S U ME R LE V E L 7. H o w ma ny time s p e r we e k d o y o u ma k e p urc ha s e s in a s a le s s to re ?
7%
11%
Always 34% Sometimes Rarely Never 48%
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The author addressed the question on online purchases to attempt to analyze the degree of level access to marketplaces and to support other questions such as regarding the barriers. Figure 16: Have you ever made online purchases?
H a v e y o u e v e r ma d e o nline p urc ha s e s ?
36% No Yes 64%
By analyzing the EC tendencies of consumers the author attempt to estimate future trends. Figure 17: Do you think online sales could substitute your traditional purchases?
D o y o u think o nline s a le s c o uld s ub s titute y o ur tra d itio na l p urc ha s e s ?
38% Yes No 62%
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Bu identifying the market preference the author attempts to identify the tendencies of the majority of the choices of the consumers. Figure 18: Which online market you are more inclined to make purchases from?
W hic h o nline ma rk e t y o u a re mo re inc line d to ma k e p urc ha s e s fro m?
11%
7%
National/ Local International N/A
82%
4.1.3. Summary of the Interviews A couple of interviews were made to some managers in the technology industry, such as the General Director of INACOM, Mr. Domingos Pedro. Mr. Pedro clarified that INACOM is doing its home work and waits for the parliament to do theirs so that major advancement can be made. According to Mr. Pedro (2010) the actual Internet statistics in Angola are purely estimative. INACOM do not understands about the electronic commerce however it says that is at the beginning and it is under the tutelage of the ministry of science and technology, under the Vice minister of telecommunications. All the politics of development of the telecommunications sector were always at the margin of the telecommunications sector. Government created a project of
telecommunications under tutelage of the 79
Purchases in the Internet are complicated because of there is credit card inaccessibility and there are no sites to buy from. Electronic payments are difficult especially in cases like in the gas station where they do not accept cards simply because with the use of money is easier for them to keep the change. Culturally people are used to get something out always and the use of cards and technologies alike impede the handling of money and people always ask for a tip, therefore sometimes they affirm that the card machine is not working properly. The domain .ao is not in Angola. There are very few electronic marketplaces in Angola, example of a new one is from TAAG which is one of the fewest that allows electronic payments. The author came into knowledge that this website is generated and managed from South Africa. South Africa is the fourth country in the top 10 of Internet countries of Africa. According to INACOM (2010) there is low public security, where big companies like Unitel and Movicel do not have the right conditions to secure their physical locations, for instance the anthem stays close of the generator, next to the gasoline container. INACOM believe that in 4 years time the development of technology will be much better than today. Today it is no possible to produce but in a 4 years time it will be possible to produce the equipment necessary to support Angolan infrastructures. The census project is approved and after that it will be possible to make statistics of the population, since the variables that are used today are purely estimative. The information provided from the Director is way different from the one obtained in the BuddeComm (2010) site, in fact even the Director told the author that they were not the best entity to provide accurate information and demonstrated that 80
they actually do not have accurate information and that the information provided by the INACOM right now are just estimative since there are no census and it is not possible to know the exact population size. However, once again, the author could get hold of the population size number from sources like the Internet World Stats which diverge from the information provided by the Director of INACOM in terms that if there is no Census of the size population where does the site obtained such information? There was also an interview with the consultants of Leadership Business consulting which provided information on the government projects (see egovernment). 4.2. Discussion of Research Findings As mentioned before, the research used a sample of 200 respondents, being the research instrument, a questionnaire consisting of 18 direct questions and 3 open questions. The first section (Figures 9 and 10) is comprised of two questions on the background information and relates to the delimitation of the sample, such as literacy level and employment status. The survey was conducted with men and women in a universe of 60 participants. As to education, all of them had as minimum the 12 grade. 48% of respondents were middle employees, 24% were head of department of higher, 21% were both employee and university students, and 7% were just university students. The second section relates to the Communication and Information Technology in Angola, specifically the Internet and electronic commerce and for comparison purposes the traditional purchasing. With the third question (Figure 11) participants should respond the accessibility to use the Internet. And 40% of the respondents use broadband, 81
followed by 29% that use LAN and 10% still uses ADSL, the same percentage as the ones who use the cellular phone. And in the fifth (Figure 13) respondents need to respond on the reasons about the level of development of the communication and Information technologies in Angola. When asked their opinion on the cost of Internet respondents responded from the too costly to the low cost. When asked about what are the major barriers to access the Internet than respondents enumerated with open responses, as the top 4 as follows: Poor infrastructure, High cost, Education, and electrical power. Then in the thirteenth question (Figure 18) the respondents need to report their preference of marketplaces, either national or international. The reasons that led the respondents to buy in the international marketplaces in which they are related as the first: credibility, knowledge of Web site service, diversity, promotion and safety in delivery, reliability, price, variety, convenience, prompt delivery, ease, and previous experience recommendation, stock immediately, good visual format, payment options, promotions, interesting, easy access and convenience. Respondents were asked whether they ever bought on the Internet, and 36% answered yes and 64% answered no. Of respondents who bought on the Internet, were asked how often do they find the products they want to purchase when buying on the Internet and 55% finds the products online frequently compared to 49% of frequency when shopping in a store. Of the respondents who buy on the Internet, 62% prefer to shop at physical stores and 38% answered that they prefer to buy direct online. The items preferred by the respondents are electronics, books, DVD's and CD's, and booking flights and hotels. 82
When asked about what the major obstacles for the evolution of electronic commerce in Angola respondents enumerated the most pertinent (1) to the least pertinent (10), and thus related: Logistic issues (net deliveries, lack of PO Box, etc) 1, 2 payment options, Internet cost 3, 4 poor electricity supply, low academic level 5, 6 Transparency issues; 7 language. It is valid to denote that such responses were created by the author so it could be presented as a closed question. However, there was an open box for extra responses and respondents add that other barriers are: poor quality of service or not knowing the service, lack of trust, lack of site, poor Marketing and customer services, lack of delivery. Actually, another very important barrier to indicate are the Lack of legal and regulatory policies makes it difficult or impossible to actually transact business electronically with safety. According to Payne (2003) a survey done by OECD found that one of the major obstacles to using electronic commerce was lack of understanding of electronic commerce techniques and the technology needed to use it. 4.3 Conclusion The choice of method was not the best one as the author, in terms of demographic sample, failed to gather the number of men and women, their age range and at least their monthly income. Consequently, it was complicated to clarify differences such as who buy more online, if men or women, if younger or older or even if executives or students. However, it was possible to identify the barriers of using the Internet and the ones that detract electronic commerce to develop. The poor infrastructures are the major problem, followed buy poor connection, payment issues usually connected to lack of credit cards, bank accounts and many times the websites do not even have the name of Angola in their list of billing address or do not accept the credit card. 83
Finally, with such results Angola is not yet prepared to compete with other economies, the developing countries are not an example to follow yet but can be seen as competition to growth and regarding the developed countries, Angola has a lot to learn but first there is a need to reconstruct the country, to create and approve rules and regulations on communication and information technologies, to develop the information technology systems, to be prepared to have electric power 24/7, to provide an obligatory minimum level of education to all so that the children of today can really become the future of tomorrow, and tomorrow such technologies could be seen as part of Angolan life. Angola is entering the sector of electronic commerce with quite some difficulties but that can be overcome with strength and good will of the private investment, the difficulties are: Most of the population rarely sees a computer, or if seen, never operate. So first problem, lack of equipment.
Low wages: Despite of computer products are already available in the local market, specific stores such as NCR, the price for expatriates may seem cheaper if bought at the price of a developed country but for Angolans it is expensive. Wages are low in Angola and to spend $1,700 on a notebook when the salary is $1,200, of a lawyer for example, really is not feasible.
Internet Access - it is too expensive to have Internet at home. Furthermore the connection is bad, it falls constantly, it is very slowly and resuming its very bad.
Post office or mailing service: This is another difficulty; the post office does not go to every city. Yet there is no guarantee of delivery in the
84
places where it reaches. Companies or individuals that need to receive mail need to rent a mailbox post on the local psot office. Therefore they have to go periodically check for new mail.
Payment - in Angola, although there are credit card services at the banks, it is not a common card to use locally, thus it can be said that such card is not used, checkbooks either. Everything is paid in money and fewer people use banks. The money circulates best in the hands of people and in their pockets.
Imports of products, distribution and logistics: imports are still a serious problem. In addition to the normal difficulties, there are problems with the clearance of goods and the like. Logistics in the capital may work, people just hire a truck to make deliveries, but in the provinces is very difficult to move goods and papers.
Despite these problems, it is possible to develop electronic commerce in
Angola, starting from Luanda, at least. TradeJango is an example that companies can generate profits for local companies and expose them at international level.
85
CHAPTER 5: CONCLUSION AND RECOMMENDATIONS 5.1. Limitations to the research One of the limitations of the research results from the fact that the author has narrowed the universe of analysis only to a data base of important contacts mostly medium high class people, which prevents generalization of findings to the whole of the Angolan population. For the author some limitations were: Time constraint, for such a complex subject in Angola the author would need more time to identify the exact sources of information on technology issues; Lack of information, people does not discuss about electronic commerce, and it is considered a secondary matter, there are other priorities such as the country reconstruction, the development of basic sanitary sector, developing the educational and health sector. Important websites do not work, for instance the official site from INADEC (National Institute of Defense of Consumers) or such sites are very poor in information. Information is totally outdated like 7 years back. With the lower education there are no skills to get involved in the development of more and more Angolan websites , full of updated local information in all sectors; Although the author had an interview with the General director of INACOM, the information available in journals and websites is not coordinated leading to biased research results; Many times the lack of Internet connectivity affects the whole country because there is only one satellite working for the Angola Telecom and also providing its services to the private services providers;
86
Although the author obtained reliable information directly from the National Director of INACOM, more recent information can only be found at BuddeCom website at the expense of US$245.00 for a single user, US$490.00 for 10 users, US$735.00 for 20 users. For companies who are interested to enter in the market of telecommunications in Angola it may be cheap but for a dissertation researcher it is quite expensive. 5.2. Area for further research The areas for further research are the education sector and the cultural
behavior, so that it can be analyzed together with the development of telecommunications and its use. There are practically no information available on electronic commerce in Angola, or there is not a profound reachable study that entails the economic advantages the use of electronic commerce could bring to the country. 5.3. Recommendations For certain types of industries the impact of the Internet as a channel for sales and purchases may be the greatest. For example, those products or services that may be converted into a digital format the Internet take the role not only of a sales channel, but also of a distribution channel; since in digital format, the product or service can not only be sold, but also be effectively marketed via the Internet. Although it is promising, the Internet in Angola has increased restrictions such as the laws and regulations that are not defined till today and the ingrained culture of buying and selling in the streets or personally and even the high resistance to change to new technologies either because its hard to change or because its expensive. Much remains to be developed in ecommerce in Angola to the most effective use of the network as a channel for buying and selling and the unique characteristics of this new medium - interactivity, overall connectivity, personalization, segmentation 87
and one-to-one time real communication and at any time - open a large window of opportunity that transform the Internet into something more than a new channel, that is, a rich environment, conducive to the development of new business models to be explored. It is recommended that today Angola view E-commerce rather than just a distinct form of business, it can serve as a complement, aligned and integrated with traditional operations, leveraging organization's results. There should be more examples of the TradeJango initiative and not just as a B2B eMarketplace but also as B2C. The Internet and conventional retail channels are both complementary and competing. Each system offers opportunities for communication, transaction and distribution. A consumer can use a traditional channel to try or to inspect the product and then buy it via Internet or vice versa. That would help the country especially in a sense of better time management, as such consumers would not need to go to the stores, and reduction of traffic on the streets, people would have more time to apply to other activities, more money for the companies, better organization for organizations and employees. To start the availability of the information on such business should be available on the Internet so that locals and international people may have a start on getting to know about the subject. There still many gaps about electronic commerce in Angola, to be covered.
88
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Molla, A. & Licker, P. (2001) E-commerce Systems Success: An Attempt to Extend and Respecify the Deleno and Maclean Model of IS Success, Journal of Electronic Commerce Research, Volume 2, N 4 Steinfield, C. & Whitten, P. (1999) Community Level Socio-Economic Impacts of Electronic Commerce, Journal of Computer Mediated Communications, Volume 5, N2. Krovi, Ravindra (2001) Surveying the e-landscape: New rules of survival, Information Systems Management, Autumn 2001, pp 22 30. Lee, H. & Whang, S. (2001) Winning the Last Mile of E-Commerce, MIT Sloan Management Review, Summer 2001, pp 54 - 62. Urban, G., Sultan, F., Qualls, W. (2000) Placing Trust at the Center of Your Internet Strategy; Sloan Management Review, Autumn 2000, pp 39 48. Swaminathan, V., Lepkowska-White, E. & Rao, B. (1999) Browsers or Buyers in Cyberspace? An Investigation of Factor Influencing Electronic Exchange, Journal of Computer Mediated Communication; Volume 5, N2 Tradejango (2009) Mission & Objectives [Online] Available from: https://portal.tradejango.com/web/guest/mission (Accessed 24 July 2010) BTI 2010 (2010) Angola Country Report [Online]. Available from: http://www.bertelsmann-transformation-index.de/index.php?id=70 (Accessed 26 July 2010) BuddeComm (2010) Angola - Telecoms, Mobile, Broadband and Forecasts [Online]. Available from: http://www.budde.com.au/Research/Angola-Telecoms-MobileBroadband-and-Forecasts.html (Accessed 23 April 2010) Internet World Stats (2010) Internet Usage Statistics for Africa [Online]. Available from: http://www.Internetworldstats.com/stats1.htm (Accessed 23 April 2010) African Economic Outlook (AEC) (2010) Angola Overview [Online]. Available from: http://www.africaneconomicoutlook.org/en/countries/southernafrica/angola/ (Accessed 23 April 2010) Payne, J. (2003) E-Commerce Readiness for SMEs in Developing Countries: A Guide for Development Professionals [Online] Available from: http://learnlink.aed.org/Publications/Concept_Papers/ecommerce_readiness.pdf (Accessed 25 April 2010) ANGOP Agencia Angola Press (2010) Cinquenta em cada 100 angolanos tm telemvel (translation: Fifty in every 100 Angolans have cellphone) [Online]. 92
Available from: http://www.portalangop.co.ao/motix/pt_pt/noticias/economia/2010/1/6/Cinquentacada-100-angolanos-tem-telemovel,7638ed37-cfc4-4182-a98d-68ce69b02f79.html (Accessed 18 March 2010) ANGOP Agencia Angola Press (2010) Meios de pagamentos electrnicos devem ser massificados (Translation: Means of electronic payments shall be massified) [Online]. Available from: http://www.portalangop.co.ao/motix/pt_pt/noticias/economia/2010/6/26/Meiospagamentos-electronicos-devem-ser-massificados,fefb948b-da81-4865-84b7e34006d21395.html (Accessed 10 July 2010) Minader (2002) A Economia Angolana (Translation: the Angolan Economy) [Online] Available from: www.minader.org/pdfs/fomento/volume_i/economia_angolana.pdf) (Accessed 01 July 2010) www.itu.int Duarte, M (2004) Sucesso e insucesso em comrcio electrnico B2C [Online] Available from: www.miguelduarte.net/ficheiros/tese-miguel-duarte.pdf (Accessed 24 July 2010) Fortes & Rita ( n.d) A privacidade e a utilizao do comercio electrnico: modelo e metodologia de investigao [Online] Available from: dialnet.unirioja.es/servlet/articulo?codigo=2233176 (Accessed 10 january 2010) Further reading: Michael R. Ward and Yu-Ching Chen (n.d) price increases from online privacy [Online] Available from: http://arxiv.org/ftp/cs/papers/0109/0109053.pdf (Accessed 23 April 2010) Diniz, S., Rosadas, L., Macedo, M. (n.d) Impacto da Qualidade em Servios no Sucesso de Sites de Comrcio Eletrnico [Online]. Available from: www.aedb.br/seget/artigos06/753_Artigo%20Seget%20TI.pdf (Accessed 10 July 2010) TradeJango.com http://www.inadec.gv.ao/
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APPENDICES Appendix I: Survey Questionnaire
An investigation of the influence of adoption of ecommerce on economic development of Angola The aim of this survey is to collect data on Internet usage and electronic commerce usage in Angola. These data are necessary to analyze the growth of Internet and the adoption of electronic commerce in Angola in contrast with making purchases in the conventional or traditional way to influence the economic growth of Angola. SECTION A: BACKGROUND INFORMATION 1. What is your status? o Employee (middle level) o Employee (department head or higher) o Student o Both student and employee 2. Do you think the literacy level in Angola is adequate to allow citizens to easily access Information and communication Technologies? o Yes o No SECTION B: INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) 3. How do you normally access the Internet? o LAN o Cellular phone o ADSL o Broad band (cable, etc) o 3G card o Other____________ 4. What is your opinion on the cost of accessing Internet in Angola? o Too costly o Costly o Moderate o Low 5. How well developed are information and communication technologies in Angola? o Very well developed o Well developed o Poor o Very poor 6. If poor, what do you think are the major obstacles to access Internet in Angola? (Please give at least 4) i. ____________________________________________________ ii. ____________________________________________________ 94
iii. iv.
____________________________________________________ ____________________________________________________
SECTION C: PURCHASES - CONSUMER LEVEL 7. How many times per week do you make purchases in a sales store? o always o sometimes o rarely o never 8. Which products do you buy more frequently? i. __________________________________________________ ii. __________________________________________________ iii. __________________________________________________ iv. __________________________________________________ 9. Do you always find the products you're looking for? o Frequently o Sometimes o Rarely 10. Have you ever made online purchases? o Yes o No 11. Which products do you buy more frequently, on the Internet? i. ___________________________________________________ ii. ___________________________________________________ iii. ___________________________________________________ iv. ___________________________________________________ 12. Do you always find the product you're looking for, on Internet? o Frequently o Sometimes o Rarely 13. Which online market you are more inclined to make purchases from? o National/ Local o International o N/A 14. Do you think online sales could substitute your traditional purchases? o Yes o No 15. If yes, with which products? i. _____________________________________________________ ii. _____________________________________________________ iii. _____________________________________________________ iv. _____________________________________________________ 95
o N/A 16. In a scale of 1 to 10, what do you think are the major obstacles for the evolution of electronic commerce in Angola? (Please list as many as may apply by importance) o Language_____ o Academic level_____ o Electricity_____ o Internet cost____ o Payment issues_____ o Transparency issues_____ o Logistic issues (net deliveries, postal box, etc)_____ o Other________________________ 17. In your opinion, in 3 years time, the electronic commerce in Angola will: o o o o Grow significantly Grow decrease decrease significantly
SECTION D: CORPORATE LEVEL 18. Do you use the Internet to promote your company? Sale? And provide after sales service? (Please choose as many as may apply) o o o o Company_____ Sales______ After Sales_____ N/A
19. Does you company has a website? o Yes o No o N/A 20. Do you have your own webmaster for your website or do you subcontract a company? o Webmaster o Subcontract another company o N/A 21. If you already use Internet for sales, what is the % of web sales comparing your store sales? o %: _____ o N/A Thank you very much for you patience. Candida Costa
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- An investigation of the influence of adoption of ecommerce on economic development: the case of Angola -

Cndida Patrcia Verssimo e Costa

The University of Liverpool

In partial fulfillment of the requirements for the degree of

MASTER OF BUSINESS ADMINISTRATION

By Cndida Patrcia Verssimo e Costa

Shane McMordie - Dissertation Advisor

Date: Date: 28th Oct. 2009

The University of Liverpool 2010

Signed Cndida Patrcia Verssimo e Costa

by Cndida Patrcia Verssimo e Costa

Accessing previously written dissertations on the subject of the

Other Transformation Diamonds

Source: Minader (2002)

Figure 3: GDP by sector, 2008 (percentage)

Source: African Economic Outlook (AEC), 2008

Source: Internet World Stats (2009)

Source: Internet World Stats (2009)

Figure 5: Internet Penetration in Africa

Source: Internet World Stats (2009)

Source: Internet World Stats (2009)

is the framework for inter- and intraorganizational collaboration

Source: Adapted from Turban et al (2008:4)

Table 3: Number of lines growing rate

Table 4: Geographical distribution of Users from the Fixed Network

Source: Ministry of Telecommunications and Information technology in INACOM (2010)

Source: Ministry of Telecommunications and Information technology in INACOM (2010)

Table 6: Geographical distribution of Users from the Mobile Network

Source: Ministry of Telecommunications and Information technology in INACOM (2010)

Source: Ministry of Telecommunications and Information technology in INACOM (2010)

Table 8: Angola Internet Usage and Population Growth

Source: Internet World Stats (2009)

Table 10: Geographical Coverage by Services Network

Source: Ministry of Telecommunications and Information technology in INACOM (2010)

Penetration rate 57% 2% 4%

Table 12: Voice lines and data from fixed Netwok

Source: Ministry of Telecommunications and Information technology in INACOM (2010)

Table 13: Backbone

2.3.5. Evaluation of prices

Source: Ministry of Telecommunications and Information technology in INACOM (2010)

Generate significant gains in terms of savings and efficiency in procurement

Increase the quality of goods and services purchased

Increase the transparency of the government purchases

Promote the economy and the entrepreneurship

Source: Leadership Business Consulting (2009)

And effective communication PNCPE.

Table 16: Table summary of "GVU's User Surveys

Figure 8: Sequence of tendency of consumer decision

Value proposition tangible or physical

Low cost, high frequency of purchase

Differentiation potential of low

High differentiation potential

Intangible value proposition or information

igh cost, low frequency of purchase

Differentiation potential of low

High differentiation potential

Intangible value proposition or information

Differentiation potential of low

Adapted from Peterson et al. (1997)

CHAPTER 4 RESULTS OF RESEARCH FINDINGS

Too costly Costly Moderate Low

Very well developed Well developed Poor Very poor