A Cloud Computing-Based Model of E-Commerce Adoption for Developing Countries

A Cloud Computing-Based Model of E-Commerce Adoption for Developing Countries

Ghada Refaat El Said (Management Information Systems Department, Future University in Egypt (FUE), New Cairo, Egypt)
Copyright: © 2017 |Pages: 19
DOI: 10.4018/JECO.2017070104
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Abstract

While e-commerce can contribute significantly to the economies of developing countries, challenges may include a lack of telecommunications infrastructure, low Internet and credit card penetration, lack of skilled professionals and insufficient delivery systems. Cloud computing offers a solution to most of these challenges, providing access to a low-cost, reliable and flexible internet-based infrastructure. However, there is little empirical validation of the adoption of cloud computing in e-commerce; to bridge that gap, the present study proposes a cloud-based model of e-commerce adoption. Based on a survey of leaders of 175 small, medium, and large ICT firms in Egypt, a developing country where e-commerce is expected to boom in the coming years, the proposed model empirically validates organizational, technical and contextual factors that would make e-commerce adoption more effective for business, governments and service providers.
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Literature Review And Research Motivation

E-Commerce Adoption in Developing Countries

Several studies of e-commerce adoption in developing countries have emphasized the effect of contextual factors such as technological, economical, legal and financial infrastructures (Travica et al., 2002; Jennex et al., 2002) while others have looked at managerial and organizational factors affecting the adoption decision (Daniel et al., 2002). Molla and Licker (2005a, 2005b) developed the Perceived E-Readiness Model (PERM) for e-commerce in developing countries, integrating contextual and organizational factors. That model considers a number of internal organizational factors (e.g. organization’s perception of e-commerce and its potential benefits and risks, managers’ commitment, resources), as well as contextual factors (e.g. government support, market forces, support industries’ e-readiness) as important elements in e-commerce adoption. PERM has been validated as an effective e-commerce adoption model in a number of countries, including China (Tan et al., 2007), Bahrain (Ali et al., 2014) and Iran (Fathian et al., 2008). These studies highlighted critical issues for e-commerce e-readiness, including organizational features, technology infrastructures, IT availability and security environment.

However, all of the above studies are limited by their failure to address important organizational factors, such as Internet-based technology innovations currently adopted in these countries that can significantly impact e-commerce. In Egypt, e-commerce remains underdeveloped; according to the Egypt Business Directory (El-Behary, 2015), despite a 400% increase in Internet penetration between 2004 and 2015 to 31 million Internet users, only 2% of those users shopped online in 2015, and 80% paid on delivery. One key challenge for e-commerce in Egypt is low credit card penetration. In 2015, only 7% of Egyptians had a bank account, and only 7.6 million had a credit or debit card (El-Behary, 2015). This is expected to change during the next decade, with a massive increase in pre-paid and credit card penetration accompanying an e-commerce boom (El-Behary, 2015). The Internet contribution to GDP is projected to rise significantly to 1.6% of GDP in 2017 (Boston Consulting Group, 2012).

Other challenges obstructing e-commerce development in Egypt include a lack of technological infrastructure and the weak readiness of support industries like banking and tax and customs administrations (El-Behary, 2015). In similar countries, such as the Kingdom of Saudi Arabia, the lack of clear regulations and government support are thought to be key influences on e-commerce adoption (Al-Ghamdi et al., 2011). However, explanations of low e-commerce penetration within this fast-growing Internet population have not been empirically tested, and nothing is known about organizational, individual, contextual and technological factors affecting e-commerce adoption in Egypt.

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