Reasons for E-Commerce Slow Growth in Saudi Arabia - Coursework Example

PhD Proposal Proposed Thesis Topic Reasons of e-commerce slow growth in Saudi Arabia. Introduction The goals of 8th Saudi National Plan (SNP 8th) included implementation and support of e-transactions at various government and commercial sectors. It aimed at achieving productivity, efficiency and quality goals through knowledge management and different technological platform, enabling easy e services, improving ICT activities and various others. The need of enabling and promoting eTransactions among various sectors and government sectors to enhance performance and efficiency has been recognized in MOFA goals (UNDP and Ministry of External Affairs, Kingdome of Saudi Arabia, 2009). However the reasons of low level of acceptability of electronic commerce among various group ranged from availability of appropriate and secured transaction medium to the cultural and individual barriers. Problem Statement Despite of having good rate of penetration of internet and communication technology, there is lack of substantial growth of e-commerce activities in Saudi Arabia. The internet user penetration with twenty two percent and E-commerce users less than fifteen percent signifies the gap among the internet users and customers involve in e-commerce activities. There is a need to identify the reasons of slow growth of e-commerce activities in different sectors and for different consumer activities. Literature Review The growth in information technology and the penetration of internet has revolutionized the world of communication. This also has provided an effective medium of internet and in some countries it has been used as a successful and effective platform for e-commerce activities. Ecommerce activities range from paying utility bills through the internet to buying high value products and services. The e-commerce activities have allowed customers to use the banking services at their doorsteps and pay their utility bills without much of hassle. However the acceptance of the internet communication technology for the e-commerce activities have been subject to many issues like technical knowledge and skills, level of acceptance of the platform as a commercial activity tool and many others. The internet services in Saudi Arabia became available to the common man in late 1990s. The Saudi Arabia Government and various public interest groups feared that the internet services will unblock the access of the inappropriate contents to the general public which is against social values and Islamic beliefs in the Saudi Arab society. There have been long debates and discussions over the benefits and potential harms of the services if that would be available to general public. The benefits outreached the potential harms and the proactive actions to controls the inappropriate contents were taken. During 1999, the internet services became available to the general public. “Up until February 1999, the Internet was not available to the general population of Saudi Arabia; it was confined to universities and hospitals only. The reason for this was that the government was fearful of the ‘harmful’ material such as pornography that was widely available on the Internet. (Khangura 1997, pp 44)” Late 1990s was characterized by various studies and research in order to understand various drawbacks and benefits of e-commerce activities for different business purposes. Saudi Arabia one of the largest producers and suppliers of crude oil has very impressive rate of growth when it comes to internet users. Nevertheless, the uses of internet for commercial activities are very limited particularly when it comes to economic transactions. There are various reasons to it. “Regardless, a significant proportion of the population is online. Accurate numbers for e-commerce are difficult to find, but officials cited $10 million (USD) after one year of legalized Internet access in February 2000. Businesses have been slow to catch on to the Internet yet, as 67% of firms did not have access to the Internet at the end of 1999, according to a KACST survey (Khangura 1997, pp 44)” In the year 2001 a plan of action was developed in order to facilitate the e-commerce activities in the country by the Committee formed by the Government. This Plan of Action covered various aspects of e-commerce activities. The first among these was establishing the necessary Public Key Infrastructure. This included establishment of mechanism to issue digital certificates, securing the certification, safety and technical specification of the electronic signatures and others. This was followed by the most crucial payment system in order to facilitate the banking transactions in safe and smooth transactions, developing supportive e-commerce technologies, establishing appropriate legal and legislative framework. The most important aspect of this action plan was identification of data safety requirements and privacy of personal data and enabling e-Government services. Government took initiative to facilitate e-procurements in Government activities. The promotion for developing websites for Saudi Arabian companies in order to reach to their overseas clients with their products and offerings has opened the globe for marketing. Awareness, training and development, studies and research and various other activities were included in this plan of action. There are various steps taken by the Communications and Information Technology Commission during early 2000s. It established Saudi Project for Electronic Data Interchange (SaudiEDI) along with Ministry of Finance in order to facilitate secured, speedy and transparent transfer of funds in business. The project was developed with the concerns of domestic and international trade including exports and imports services and trade in and with Saudi Arabia. According to Communication and information Technology Commissions (2003)“ It would include the electronic interchange of the consignment manifest information, delivery papers, and the various items of import-export information among the different concerned agencies, i.e. the Customs Department, the General Ports Department, shipping agents, clearing agents, etc. The commission established a system for speedy money transfer known as “SARIE”. This integrated system allowed immediate settlement of transfers among Saudi banks and through their accounts with the Saudi Monetary Authority.” There was other project “The Omrah project” that aimed at issuing entry visas for those wishing to do the holy places in Saudi Arabia Commission also started the use of Smart Cards that uses latest technology for various multifaceted applications to testify new technology. This was a high storage, microprocessor capable Smart card capable of carrying out complex processes. “Survey of Internet users in Saudi Arabia reveals substantial adoption of ecommerce in the affluent and booming economy. 48.36% of Internet users in Saudi Arabia reported purchasing products and services online and through their mobile handsets over the past 12 months. Based on the survey findings, the Arab Advisors Group estimates ecommerce users in Saudi Arabia to exceed 3.5 million consumers representing 14.26% of the population. (Arab Advisors Group, 2009)” The rate of internet penetration in the Saudi Arabia has been very attractive in the Middle East. According to Internet World Stats (2009) there are 6,200,000 internet users as of March 2008. This represents twenty two percent penetration of internet in Saudi Arab. UAE and Qatar in the Middle East region are leading with approximately 49% and 43% percent penetration respectively. The internet usage is predominately in the area of sending emails or communications. The e-commerce activities are limited in this region. Proposed Methodology The research methodology will be based on mixed method approach wherein qualitative and quantitative both types of sources will be used for the data collection process. The primary data will be collected from the users or consumers directly regarding their behaviour, attitude and perception regarding various e-commerce activities and internet services (Creswell, 1994, 2003). This will be based on the structured questionnaires. Qualitative research will be based on case study methods (Creswell, 1994, 2003). Different information regarding the history of e-commerce activities in Saudi Arabia and different other aspects of e-commerce activities will be studied and analysed systematically. Research Activities and Schedule S.N. Activity Lead Time 1 Problem Identification, selection of research and sampling methods 2 Weeks 2 Questionnaire Preparation and Preparing pilot study 1 Week 3 Pilot study 1 Week 4 Telephonic survey 2 Weeks 5 E-mail survey 9 Weeks 6 Users Survey 9 Weeks 7 Secondary Research 7 Weeks 8 Preparation of Tables and Charts 2 Weeks 9 Analysis 2 Weeks 10 Preparing research report 2 Weeks Gantt chart Task/weeks 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Problem Identification, identification of research methods and sampling                                   Questionnaire Preparation and Preparing pilot study                                   Pilot study with friends                                   Telephonic survey                                   E-mail survey                                   Users Survey                                   Secondary Research                                   Preparation of Tables and Charts                                   Analysis                                   Preparing research report                                   Activities and resource Requirements Activities* Duration Start Date End Date Human Resource Place Equipment Cost / Euro 1 2 weeks 7-August 14-August Myself Home Stationary   2 1 week 15-August 21/08 Myself Home Stationary   3 1 week 22/08 29/08 Myself, friends Home     4 2 weeks 30/08 15/09 Myself contacted respondents Home Telephone/ Computer/Internet 200 5 4 weeks 16/09 15/10 Myself Home Computer/Internet 50 6 4 weeks 16/10 16/11 Myself Home Stationary 200 7 2 weeks 16/11 30/11 Myself Home Computer/Internet/Libraries 200 8 2 weeks 1/12 15/12 Myself Home Computer   9 2 weeks 16/12 30/12 Myself Home Computer   10 2 weeks 1/1/2010 15/01/2010 Myself Home Computer   Total   18 weeks       650 Bibliography Arab Advisors Group (2009) available at http://alhaqqsociety.wordpress.com/2009/06/30/saudi-arabia’s-internet-users-spent-over-usd-3-28-billion-in-b2c-ecommerce-during-2007/ [22 July 2009] Communications & Information Technology Commission (2003) Document WSIS/PC-3/CONTR/25-E [Doc] available at http://www.itu.int/dms_pub/itu-s/md/03/wsispc3/c/S03-WSISPC3-C-0025!!MSW-E.doc [22 July 2009] Creswell, J.W. 1994 “Research design: Qualitative and quantitative approaches” Thousand Oaks, CA, Sage. Creswell, J.W. (2003). Research design. Qualitative, quantitative and mixed methods approaches. Thousand Oaks, CA: Sage. Khangura, H.S., 1997, Free Speech on the Global Internet: The Role of E-Commerce, [Pdf] available at http://www.cs.ubc.ca/grads/resources/thesis/Nov01/Harinder_Khangura.pdf [22 July 2009] Internet World Stats (2009) Data available at http://www.internetworldstats.com/stats5.htm#me [22 July 2009] United Nations Development Programme and Ministry of the External Affairs Kingdome of Saudi Arabia, Project Title: “e-Services and e-Transactions Development & Knowledge Society at MoFA: Phase#1”, 2009 available (Pdf) at http://www.undp.org.sa/sa/documents/ourwork/dg/pd_54687.pdf [22 July 2009] Read More