Enhancing the transition from offline to online for small businesses in the Pacific (PIFS)
6 Dec 2023 15:00h - 16:30h UTC
Knowledge Graph of Debate
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Tomaz Gorisek
The European Union (EU) and Pacific states are natural allies when it comes to digital transformation and green transition. They both aim for ambitious results at international conferences, such as the Conference of Parties (COPs), and through their domestic policies. The digital transition can be of great help to Pacific islands in overcoming challenges like transaction costs, accessing large economic zones, and mitigating the impacts of climate change.
Achieving successful digital transition requires a comprehensive approach that considers various elements, including government policies, infrastructure, skills, and businesses. A single-pillar approach is not enough to address the complexities of digital transformation. By taking a holistic approach, the EU and Pacific states can effectively navigate challenges and seize opportunities.
E-commerce business toolkits are valuable resources for entrepreneurs, and efforts like the Pacific Regional Integration Support Program provide support to entrepreneurs in the Pacific region. It is important to address the digital skills gap among European SMEs, as many of them feel inadequately equipped. Implementing e-commerce business toolkits can empower entrepreneurs and contribute to the achievement of Sustainable Development Goals (SDGs) related to industry, innovation, and infrastructure.
Trade facilitation and infrastructure projects play a crucial role in supporting e-commerce success. The EU supports various initiatives in the Pacific region aimed at improving trade facilitation and infrastructure, such as Securitas and port rehabilitation projects. These initiatives ensure efficient product delivery, even after electronic transactions have taken place.
Regional coordination is key to digital transformation and e-commerce promotion. The EU’s positive experiences with the Pacific Islands Forum Secretariat (PIFs) highlight the importance of regional cooperation. Effective communication within the region is crucial for the development of successful programs and strategies. Initiatives like the Pacific e-commerce development partners subcommittee bring stakeholders together and foster collaboration.
In conclusion, the EU and Pacific states share common goals in digital transformation and green transition. By adopting comprehensive approaches and encouraging regional coordination, they can leverage digital technologies and foster sustainable economies. These initiatives aim to enhance the entrepreneurial ecosystem and contribute to the achievement of SDGs.
Sven Callebaut
The panel discussion aims to increase the visibility of digital acceleration and transition for small businesses in the Pacific. The goal is to highlight the importance and benefits of embracing digital platforms and technologies for small businesses in the region. The discussion, moderated by Sven Callebaut, is provided by the Pacific Islands Forum Secretariat (PIFS) and the United Nations Conference on Trade and Development (UNCTAD) Secretariat.
To support and facilitate the online transition of Pacific small businesses, PIFS has developed business toolkits. These toolkits offer guidance on establishing an online presence, managing risks, and overcoming sector-specific challenges. PIFS has expanded the program to provide training, mentorship, and financial support to help businesses effectively transition to the online realm.
The panel discussion consists of experts from the Pacific region who will discuss the transition from offline to online for small businesses. The panel includes Candice Guavis from the Republic of the Marshall Islands, Andrea Iba from the Pacific Islands Private Sector Organization (PIPSO), Olivia Pongham from the Pacific Economic Staff Association Plus (PESA Plus), and Thomas Gorisek from the European Union (EU) Delegation. Their expertise and experience will provide valuable insights and perspectives on the challenges and opportunities of embracing digital platforms.
Sven Callebaut stands as an advocate for the enhancement of visibility and support for the transition of Pacific small businesses to an online platform. In addition to the business toolkits, PIFS provides financial support, training, and mentorship to aid the transition process for these businesses.
The Pacer Plus trade agreement, a regional agreement among Pacific islands, including Australia and New Zealand, works towards enhancing digital trade and e-commerce in the region. It offers opportunities for member states to benefit from the Pacific Business Enhancement Flow Initiative, focusing on e-commerce and digital trade issues.
Sven Callebaut is interested in understanding the type of support small entrepreneurs need from their organizations and development partners to continue their online journey. This signifies the importance of collaboration and partnership in facilitating the digitalization of small businesses.
On the topic of payment challenges, the reliance on cash in the Pacific poses difficulties in promoting mobile payment and cashless solutions. This societal reliance on cash, coupled with the absence of widespread payment solutions like PayPal or Stripe in most Pacific Island countries, makes the adoption of digital payment methods challenging. Additionally, charges on debit and credit cards present further obstacles to overcome.
Lastly, a high-level session will be conducted to explore the lessons learned from the Pacific’s experiences in financial and payment systems. This session, featuring Bram Peters from the United Nations Capital Development Fund (UNCDF), aims to share best practices and insights that can benefit other countries and regions.
In conclusion, the panel discussion, business toolkits, and Pacer Plus trade agreement are all geared towards supporting and enhancing the digital transition of Pacific small businesses. Collaboration, support, and the sharing of insights and best practices are crucial in facilitating the adoption and success of online platforms and technologies. However, challenges related to payment systems and societal reliance on cash must be addressed to fully unlock the potential of digitalization in the Pacific.
Candice Guavis
The Alele Handicraft Shop in the Marshall Islands made the decision to transition to an online platform in 2011, which has proven to be highly beneficial for the business. By creating a Facebook page to market their products online, the shop was able to expand its customer base and increase its profits. The success of this transition is evident from the fact that the shop now has over 20,000 followers on its social media pages.
One of the significant advantages of the shop’s online presence is its ability to promote and share Marshallese culture through its arts and crafts. Alele Handicraft Shop takes pride in selling products that represent the unique cultural heritage of the Marshall Islands. With their online platform, they can reach a global audience and share the beauty of Marshallese culture with the world.
The success story of Alele Handicraft Shop serves as an example for other small businesses looking to transition online. Being one of the first small businesses in the handicraft sector in the Marshall Islands to embrace the digital transformation, their experience can provide guidance and inspiration to others who are considering a similar move. The transition to an online platform, when done right, has the potential to bring about growth, innovation, and economic prosperity for small businesses.
However, there are challenges that come with scaling up production to meet the demands of the online market. Handicrafts, particularly those made by Alele Handicraft Shop, require time and expertise to produce. This can pose difficulties in meeting the high demand that online platforms often generate. For instance, the shop once experienced a situation where a buyer wanted over 50 hand-woven bags, but they were unable to produce them quickly enough. This highlights the need to find solutions for efficiently scaling up production.
To address this challenge, the shop has focused on promoting the creation of faster-to-make products. By encouraging the production of earrings, necklaces, and other items that can be made more quickly, they can meet online demand more effectively. This strategy allows them to leverage their expertise while still satisfying customer needs.
Supportive measures such as toolkits, mentorship programs, and a community forum are crucial for helping small businesses successfully transition online. Alele Handicraft Shop recognizes the importance of these resources and believes that they are essential for providing guidance, knowledge, and support to businesses in the online transition process. For instance, a mentoring program where experienced individuals mentor small business owners can play a critical role in helping businesses become independent and self-sufficient. Additionally, a forum where small business owners can exchange ideas and share experiences can foster shared learning, innovation, and growth within the community.
While the transition to an online platform has brought about numerous advantages, shipping products remains a major challenge for Alele Handicraft Shop. Due to an agreement with the US Postal Services, they can only ship their products cheaply to the US, limiting their reach to other parts of the world. Shipping to the Pacific using DHL is costly, which poses a significant barrier for them. As a workaround, they sometimes rely on individuals to hand-deliver products when they are travelling to specific countries. Finding cost-effective shipping solutions that expand their reach to a broader customer base continues to be a priority for the shop.
Supplier relationships also play a crucial role in the success of the shop. Given the laid-back nature of island life in the Marshall Islands, rushing weavers to meet orders is not ideal. In instances where a requested item is not in stock, the shop recommends substitute products that are readily available instead of pressuring weavers to meet specific demands. Building strong connections and trust with suppliers allows the shop to maintain a healthy and sustainable business ecosystem.
Despite the positive outcomes of transitioning online, the process is not without its challenges. Moving from an offline to an online market presents various obstacles that need to be overcome. For Alele Handicraft Shop, some of the main issues include various types of challenges related to logistics, stock availability, and shipping. These difficulties highlight the complexities involved in fully embracing the digital transformation and adapting to the changing market landscape.
Although the Alele Handicraft Shop has been conducting online business for the past 10 years, they still consider themselves to be in the early stages of e-commerce. As with any evolving industry, understanding the intricacies of e-commerce, particularly regarding payments and charges, is an ongoing learning process. The shop remains committed to continuously improving their e-commerce expertise and leveraging it to further grow their business.
When it comes to funding their start-up, Alele Handicraft Shop prefers to avoid business loans. While bank loans may be the typical choice for funding, the shop has moved past relying on loans and instead seeks out in-country opportunities, grants, or loans. Their goal is to become self-sufficient and independent, taking advantage of existing resources and opportunities without relying heavily on loans.
In conclusion, the Alele Handicraft Shop’s transition to an online platform has proven to be a successful move, resulting in increased profits and an expanded customer base. The shop’s online presence allows them to share and promote Marshallese culture through their unique arts and crafts. Challenges in scaling up production and shipping remain, but the shop’s focus on faster-to-make products and strong supplier relationships help overcome these obstacles. The shop strongly advocates for toolkits, mentorship programs, and community forums to support other businesses in their online transition. While they continue to refine their e-commerce strategies, the shop aims to become self-sufficient and explore alternative funding options.
Olivia Phongkham
The Pacer Plus regional agreement aims to support digital trade and e-commerce among Pacific islands, including Australia and New Zealand. This agreement focuses on creating a conducive environment for member countries and fostering the growth of digital trade. It strives to strengthen the legal and regulatory framework for digital trade by working on e-commerce law drafting and conducting feasibility studies on various trade aspects. Additionally, Pacer Plus has successfully implemented several e-commerce activities in different regions, such as regulatory gap analysis, launching e-commerce policies, and validating strategies through national consultation processes.
Inclusiveness is an important aspect of Pacer Plus, with a specific focus on promoting gender equality and the inclusion of marginalized groups and people with disabilities in e-commerce activities. The Development Economic Cooperation Work Program of Pacer Plus prioritises gender equality and inclusiveness, ensuring that all parties involved in trade services and investment activities in the e-commerce sector are included and have equal opportunities.
The Pacific Business Flow Enhancement Initiative, which operates under the Pacer Plus agreement, is designed to be flexible and adaptable to the needs and requirements of PACERplus countries. This initiative provides funding on an annual and multi-year cycle, allowing for the addition of more components as needed. This flexibility enables countries to align their national priorities with the obligations of PACERplus and other trade commitments, such as those in the World Trade Organization and multilateral forums.
The expansion of PACER+ is not limited to invitation but depends on countries’ requests to join. Olivia Phongkham, a representative, stated that countries can request to join PACER+ and they would welcome such requests. The expansion of PACER+ is ultimately determined by the country’s desire to join and participate in the agreement.
In conclusion, the Pacer Plus regional agreement plays a vital role in promoting digital trade and e-commerce among Pacific islands, fostering an enabling environment for its member countries, and driving inclusive growth in the e-commerce sector. With its successful implementation of various e-commerce initiatives, Pacer Plus has demonstrated its commitment to supporting the development and expansion of digital trade. Moreover, the flexibility of the Pacific Business Flow Enhancement Initiative allows for customization to meet the specific needs of PACERplus countries.
Audience
The analysis includes multiple speakers discussing various topics related to international trade, cooperation, and banking. One topic of discussion is the potential expansion of PACER+, a regional trade agreement. The audience inquires about the future plans for PACER+, indicating an interest in its growth and development.
Another point emphasized by one of the speakers is the importance of learning from different parts of the world. This underlines the significance of global collaboration and international relations in achieving mutual growth and development. The speaker voices support for international cooperation, promoting a collective approach to problem-solving.
Maritime relations between Africa and the Pacific also come up in the analysis, with a speaker expressing interest in exploring the potential for passage between the two regions. This demonstrates an acknowledgement of the importance of connectivity and trade routes for economic development in both regions.
The loss of correspondent banking relationships in Pacific Island states is highlighted as a significant problem. This issue is attributed to both political and technical factors, demanding a right to be connected to the financial world. The analysis reveals that this problem is not limited to the Pacific Islands, as some banks in other regions are also facing similar challenges. The extent of this problem is evidenced by specific examples, such as the case of Vanuatu, where banks have resorted to physically transporting large sums of money in suitcases to settle transactions.
One of the speakers suggests considering banking connectivity as a public utility. They argue that the cost of servicing small markets from correspondent banking relationships is high, and compliance costs are rapidly increasing. This viewpoint implies a need for a shift from considering banking purely as a profit-driven commercial venture to viewing it as a service essential for societal development.
Furthermore, the analysis explores the idea of subsidizing banking services with public money, as the commercial viability of such services in small markets is diminishing. This perspective views banking as a critical public good, deserving of support to address the challenges faced by smaller economies.
Additionally, the speakers delve into the role of correspondent banking relationships in international payments and their impact on e-commerce. They explain that correspondent banks act as intermediaries between banks in different countries, enabling settlements of international transactions. However, this system poses difficulties for e-commerce in smaller markets, as big banks often consider such markets unprofitable and are reluctant to provide correspondent banking services. This further exacerbates the challenges faced by small businesses in these regions, as transactions can be time-consuming and expensive.
In light of the obstacles faced in sustaining e-commerce commercially in small markets, the notion of treating it as a public good for these markets is proposed. Viewing e-commerce as a public good, akin to essential utilities like water and electricity, can create an enabling environment for small businesses to thrive.
Overall, the analysis presents a diverse range of perspectives on key issues such as trade, banking, and economic development. It highlights the need for international cooperation, political solutions to banking challenges, and alternative approaches to support small markets and businesses. The suggestions put forward aim to foster inclusive growth and address the limitations faced by economies with unique circumstances.
Andrea Ibba
Small businesses in the Pacific Islands face several challenges when starting their online journey. One major obstacle is their limited capacity to handle multiple tasks simultaneously, making it difficult to allocate resources and time towards establishing an online presence. Additionally, advancements and changes in the region tend to arrive later, further hindering small businesses from embracing e-commerce.
Internet accessibility is another major challenge, with internet penetration averaging around 50% in most islands. However, the cost of internet can be quite high, reaching approximately 13% to 20% of an average salary. Limited access to affordable and reliable internet services acts as a barrier to online engagement. Furthermore, the lack of digital skills and financial literacy among entrepreneurs adds to the challenges they face.
Creating an enabling environment for online business is crucial. However, infrastructure issues limit internet penetration mainly to capital cities, leaving remote areas with inadequate access. The lack of essential infrastructure and services, such as 4G internet, further exacerbates the problem. High costs associated with internet usage also hinder accessibility and potential profits for online businesses.
Addressing the consumer side of online business is equally important. Low digital literacy and high costs of internet access result in low demand for digital products. Improving digital literacy and finding solutions to reduce internet cost are essential to overcome these barriers.
Lower-cost platforms like Facebook provide a user-friendly option for small businesses to establish an online presence. This offers an affordable alternative to the expense of starting an independent e-commerce website or platform.
The Pacific Islands Forum (PIF) recognizes the challenges faced by small businesses and has developed business toolkits to assist them in navigating the complexities of online operations. These user-friendly toolkits provide practical guidance tailored to specific challenges and are designed to save entrepreneurs’ time.
Andrea Ibba, an expert in small business development, supports the use of these toolkits as a valuable resource for entrepreneurs. They have been developed based on demand from Ministry of Trade focal points in various countries, making them highly relevant and effective.
PIF also offers additional support through workshops, coaching and mentoring schemes, and a grant scheme. These initiatives aim to strengthen the support provided to small businesses and ensure their successful transition to the digital landscape.
Furthermore, businesses in the Pacific Islands face payment challenges, including high shipping costs and difficulties in making and receiving payments. The United Nations Capital Development Fund (UNCDF) is working on strategies to address these challenges through mobile payments, offering a promising solution to facilitate transactions.
When considering e-commerce, businesses need to evaluate the costs associated with data usage and digital infrastructure. Careful consideration of these costs is necessary to ensure financial viability.
Overall, small businesses in the Pacific Islands face challenges such as limited capacity, high internet costs, and low digital literacy. However, by creating an enabling environment, utilizing lower-cost platforms, providing business toolkits, and offering additional support, these challenges can be overcome, facilitating successful online expansion. Addressing payment issues and exploring mobile payment solutions are also crucial steps in promoting e-commerce growth in the region.
Speakers
AI
Andrea Ibba
Speech speed
174 words per minute
Speech length
3338 words
Speech time
1150 secs
A
Audience
Speech speed
142 words per minute
Speech length
1229 words
Speech time
519 secs
CG
Candice Guavis
Speech speed
142 words per minute
Speech length
1051 words
Speech time
445 secs
OP
Olivia Phongkham
Speech speed
140 words per minute
Speech length
1142 words
Speech time
491 secs
SC
Sven Callebaut
Speech speed
150 words per minute
Speech length
4495 words
Speech time
1801 secs
TG
Tomaz Gorisek
Speech speed
191 words per minute
Speech length
1537 words
Speech time
482 secs
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