Development & Aid, Economy & Trade, Headlines, Latin America & the Caribbean

ECUADOR: Micro-Entrepreneurs Set Sights on E-Commerce

Cristina Hernández* - Tierramérica

QUITO, Dec 22 2003 (IPS) - A community project in Ecuador is making the most of the Internet economy, which is otherwise considered out of reach for most countries of the developing South, according to the United Nations E-Commerce and Development Report 2003.

Mythological figures adorn indigenous ceramic pieces, delicate borders bring out the colours of soft weavings and aromatic delights surround organic coffee.

These products can be purchased through the Internet as part of the Camari e-commerce project, which began operations in 2000 and involves 6,500 families from several different ethnic and cultural groups of Ecuador’s Andean, coastal and Amazon regions.

The participants adhere to practices of fair and equitable trade, with the aim of fomenting sustainable development based on social equality, environmental protection and economic security.

At a cost of just over a half million dollars, the project is financed by the Multilateral Investment Fund (MIF), a mechanism of the Inter-American Development Bank for promoting participatory economic growth in Latin America and the Caribbean.

The local affiliate, which contributes 30 percent of the costs, is the Camari enterprise, part of the non-governmental foundation FEPP, created in 1981.

"Thirteen rural community organizations have benefited from information technology tools for electronically marketing their products," Edgar Carvajal, MIF specialist in Ecuador, told Tierramérica.

"The main achievement has been the consolidation of an electronic catalogue (of products) when the initial reality was one of complete lack of awareness about the possibilities," he said.

More than 500 families, 73 percent from the Achuar indigenous community, participate through the non-governmental Chankuap Foundation, based in the Ecuadorian southeast.

"The products are 100 percent organic. In the Achuar region, which can only be reached by air, there is organic certification for peanuts, cacao, and hot peppers," says Francisca Bonito, who is in charge of the Chankuap on-line catalogue.

Some of the obstacles for the take-off of e-commerce in the region are low income, scant investment incentives, insufficient education and the absence of payment systems, according to a report by the United Nations Conference on Trade and Development (UNCTAD).

"The project has increased knowledge about the high demands of Internet marketing and has improved business management and built alliances amongst productive groups," Camari director Homero Viteri told Tierramérica.

Carlos Calderón is a member of the Calderón Union of Masapán Artists, 15 km north of Quito.

Alongside 20 others, mostly women, he works making the traditional masapan (bread dough) crafts, an art form that dates back to the colonial era.

"Each member of the union has his or her own sales site," Calderón told Tierramérica. "Requests arrive by Internet and are distributed equally among the partners."

This artisan, who can produce around 200 masapan accessories a day, says the e-commerce project allows him to increase the number of contacts and customers, but "the process can be a slow one."

Revenues are subject to seasonal fluctuations in sales. On average, Internet sales can generate 150 to 200 dollars per artisan each month, says Viteri.

For comparison, the basic monthly wage in Ecuador’s farm sector is 140 dollars.

One of the factors standing in the way of new contacts is the lack of services to facilitate the completion of Internet-based transactions, such as the verification costs for credit card purchases, which must then occur via telephone or fax.

There are two modalities in e-commerce: business-to-business (B2B) and business-to-consumer (B2C). Experts say that in developing countries the experiences in e-commerce have helped strengthen existing ties with clients, which are usually other companies.

According to U.N. figures, B2C e-commerce in Latin America was worth 2.3 million dollars in 2002 and is expected to reach 4.5 million dollars this year. The region’s leaders in this sense are Brazil, Argentina and Mexico.

B2B figures for Latin America are more difficult to pin down, says the report.

The United States, Canada and half a dozen European countries are the destination for most of the Camari products. Viteri notes that the focus has been on B2B.

The project’s overall impact will be evaluated at the end of 2004, when the pilot phase concludes.

(* Cristina Hernández is a Tierramérica contributor. Originally published Dec. 13 by Latin American newspapers that are part of the Tierramérica network. Tierramérica is a specialised news service produced by IPS with the backing of the United Nations Development Programme and the United Nations Environment Programme.)