Exploring the Reality of E-Commerce Benefits among South African Businesses

Abstract

The use of e-commerce by businesses in developing countries is related to the potential benefits of improving linkage to international value chains, increasing market access and reach, enhancing internal and market efficiency and lowering transaction costs. The opportunity imperative has resulted in the adoption of e-commerce by some businesses in these countries. However, the questions of what and how much benefit businesses in developing countries are extracting from their e-commerce investments are not well covered. This paper attempts to explore the real benefits of e-commerce based on data from 92 businesses in South Africa. The findings indicate that e-commerce benefits are by and large limited to improving intra and inter-organizational communications. Strategic benefits such as improving relationships across the value chain, increasing market reach and reducing market, operation and supply chain management costs are not as widely dispersed as the standard model of e-commerce would have made us believe. These findings support the argument that cautions against an over-optimistic view of e-commerce for developing countries.

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