E-Commerce Benefits Require Access, Digital Connectivity At Right Cost in Laos

Barriers such as costs and strength of connectivity, infrastructure, facilitation must be overcome so ongoing development of e-Commerce in Laos can assist more women, small firms, people with physical disabilities, and those in isolated communities to benefit from trade, according to research from World Bank.

Technology, e-Commerce, and connectivity mean the potential for exporting goods and services from Laos has never been greater, yet obstacles remain to fully comprehend and grab some of the many opportunities on offer, according to research released by the multilateral financier, the World Bank.

The rapid growth of e-commerce globally, including in the Association of Southeast Asian Nations (ASEAN), helps lower the costs of trade for exporters from Laos and reduces prices for consumers, the research paper entitled Taking Advantage of E-Commerce: Legal, Regulatory and Trade Facilitation Priorities for Lao PDR (English) has found.

It comes hot on the heels of the critical assessment on offer in the report Digital Connectivity in Lao PDR: Lagging Behind Peers featured by the Laotian Times: “Laos’ Online Connectivity Lagging Behind Peers As World Bank Research Reveals Extent, also in February 2019.

What is e-Commerce?

“E-commerce refers to the buying and selling of goods and services digitally”, according to the definition used in the research,

“Although limited available information suggests that Lao PDR has a minimal presence of e-commerce, it has the potential to present many opportunities:”

• E-commerce can help lower the costs of trade for Lao PDR exporters and lower prices for consumers.
• It can also reduce barriers to people who face disadvantages participating in traditional trade (ie. women, people with disabilities, and isolated communities).

  

Constraints to the e-commerce environment currently hold Lao PDR back from greater participation.

• Limited internet connectivity, high costs of payments, incomplete regulatory infrastructure, and high trade facilitation and logistics costs are limiting factors.

The legal and regulatory framework needs strengthening in some areas to support greater participation in e-commerce.

• Strengthening the protection of consumers participating in e-commerce and developing/implementing legislation for the protection of personal data will be key.
• Taxation of e-commerce is also a priority policy area.  Any reform should be informed by a careful assessment of costs and benefits to avoid restricting the early growth of e-commerce.

Trade facilitation also needs further reform to avoid posing undue costs on small firms or entrepreneurs trying to enter into e-commerce.

• The earliest area of growth in international e-commerce would likely be cross-border trade.
• Small firms and entrepreneurs are least equipped to manage costs related to shipment delays, lack of transparency, and unpredictable regulations.
• Clarification on regulations for low-value goods imports and a formal framework to streamline the process are necessary.

The reports key recommendations:

1. Implement relevant ASEAN approaches to regulatory issues related to e-commerce, with a special focus on consumer protection, privacy, and electronic signatures.
2. Take a cautious approach to imposing new taxes on e-commerce.
3. Establish a transparent and consistently applied procedure for handling low-value cross-border trade.
4. Move away from submission or paper documents for trade clearance and toward electronic submission of documents.
5. Increase effort to apply risk management principles in processing cross-border shipments.
6. Confirm the leadership role of the Ministry of Industry and Commerce in the coordination of the e-commerce agenda.