UNCTAD e-commerce Week 2017: Putting people at the heart of the digital economy

To mark UNCTAD e-commerce week (24-28 April 2017), Consumers International’s Director General Amanda Long outlines the need for a fairer and more inclusive digital economy that is built on consumer protection and trust.

UNCTAD e-commerce Week: Amanda Long speaks at high-level panel on
'Digital Transformation for all'

It goes without saying that people are at the heart of digital transformation. People as consumers, as citizens, as families, friends and employees, as students or as business owners.

For many people, e-commerce is the gateway to the digital world and the wealth of social and economic opportunities it provides. It is where we buy and compare products, transfer our money and savings, set up and maintain online businesses. And for those who are only now gaining access to the internet e-commerce is likely to be their first online interaction.

In recent years, the global e-commerce industry has seen an explosive pattern of growth. Total e-commerce sales generated around $1 trillion in 2012 and this total is now thought to be close to $1.9 trillion annually - almost doubling in just four years.

Yet whilst these figures give us a sense of the enormous potential that the digital economy could have for consumers and businesses across the globe, to fully embrace the benefits, we must create a digital world that works for everyone, everywhere.

The many faces of e-commerce

By taking a look at just some of the wonderful examples of how people are using e-commerce, it is clear to see why diversity and participation are so important:

• In Uganda, young people with innovative business ideas are being granted access to crowdsourced loans online through the Youth Empowerment scheme. [1]
• Artisan producers in Morocco use online platforms like Anao to sell products direct to customers around the world. Co-operatives like the Women Weavers of Morocco eliminate the need for the middleman and so increase profits. [2]
• Start-up business like the SafeMoto app in Rwanda are combatting the issue of road accidents, 80% of which involve mototaxis. The app scores mototaxi drivers for safety using telematic software on their smartphones. Customers can clearly see who are the bad drivers, and opt for a safer ride thus driving demand for safer transport. [3]  

In all of these examples we see the empowerment of consumers through the creation of new services and jobs, new markets and growth.

There is so much more, however, that still needs to be done before we have a digital world that works for everyone. With only 50% of the world currently online, there are still many consumers who are missing out on the power of e-commerce. According to the World Bank’s Digital Dividends report, only 15% of the world’s population have access to high-speed broadband and nearly 2 billion people do not own a mobile phone, leaving them unable to fully participate in the digital economy.

It is vital that we find the right balance between e-commerce that works for businesses and consumers. To do this, we must strive for digital transformation that is built on consumer trust and participation.

So how do we get it right?

Ensuring that everyone has their say. Yesterday I was on the UNCTAD e-commerce Week high-level panel on ‘Digital Transformational for all’. The event included talks from Mukhisa Kituyi, Secretary-General of UNCTAD, Jack Ma, founder and chairman of Alibaba Group as well as politicians, entrepreneurs, representatives’ from civil society and academia.

Another exciting announcement this week was the launch of UNCTAD’s ‘e-Trade for All’ online platform. This innovative online information hub will connect developing countries with potential partners and donors to empower them to make the most of e-commerce as a powerful driver of development.

We must follow the superb example set by UNCTAD’s e-commerce week and continue to involve a multitude of voices and opinions on the journey to digital transformation and progress. Let’s listen to consumers, producers, employees, prosumers and business owners about their experiences online, their expectations, needs and concerns. What does trust and confidence look like to them and how do we design it in?

Breaking the assumption that consumer protection stifles innovation. It won’t. In fact, careful design and safeguards to improve people’s confidence is essential if we want to bring everyone along on the journey to digital transformation and growth. We need to pay attention to social, economic, cultural and personal impacts on people and enterprises. If we don’t we risk creating a digital world where people are either left behind or lose their faith in the digital products and services available to them.

Making the most of international cooperation and connection. Building a trusted digital world can’t be done by one single entity, because we are all connected. Connectivity is both a blessing and a curse. On the one hand, we can connect to new markets, new products, our friends, new investments. On the other hand, when everyday things like payments mess up, or updates slow down a device, or when uncanny decisions are made about us based on our habits, it erodes our faith in the other amazing things that we can do with it.

So we need to make the most of the positive nature of connectivity. These connections across sectors, borders and segments mean that international organizations like UNCTAD are more important than ever. The UN Guidelines on Consumer Protection, for example, were updated last year to reflect the changing digital landscape for consumers. They show how together international bodies can create sound principles for consumers, certainty for businesses, and set a marker for good business practice in a changing world.

By working together, we can ensure the e-commerce industry is a driver of greater prosperity and equality for consumers across the globe.

1 - Mushana E SACCO Uganda Ltd. 2016. ‘Uganda Youth Economic Empowerment’. Fire Africa. Online link http://www.fireafrica.org/projects/projects/view/1057

2 - Boots, A. 2015, ‘Anou Connects Moroccan Weavers to World Market’, Fair Observer. Online link: https://www.fairobserver.com/region/middle_east_north_africa/anou-connects-moroccan-weavers-to-world-market-12804/

3 - Mulligan, G. 2016. ‘The Sharing Economy Takes Off in Africa’. This is Africa a Global Perspective. Online link: http://www.thisisafricaonline.com/News/Sharing-economy-takes-off-in-Africa?ct=true

Amanda Long: Viewing trade from the consumer perspective will alter priorities

Last week our Director General Amanda Long attended the WTO Public Forum 2014 to take part in the debate, ‘Why trade matters to everyone?’ She examines what trade would look like if consumers were put at the heart of the process. 

I very much welcome the WTO raising the question of ‘Why trade matters to everyone’. It is an important discussion because, all too often, when people talk about the benefits of trade the neglect to genuinely consider consumers.

After all, ultimately the point of trade is consumption. Consumers are the largest group in the economy and without consumers there would be only limited trade.

So what would trade look like if the primary aim was to ensure that consumers benefit from it?

Of course consumers want choice and value.

International trade and investment have contributed massively to improving choice and value for consumers - not just through access to products and services – but also by increasing competition and spurring innovation in domestic markets.

Of course this is a statement that we all roll out on occasions like these, but we say it because it is true. From the quality of coffee on my local high street to the cost of phone calls in Africa – international trade and investment has benefited consumers.

But if these benefits are going to continue to flow to consumers, we need to keep promoting market access and – importantly - tackle the corruption and lack of competition that can prevent the benefits of international trade being passed to consumers.

However it is naïve to say that consumers are only interested in choice and value. The classical view of the one dimensional, so called ‘rational’ consumer, is far too simplistic.

Consumers also want to be able to trust the products and services they buy and the companies that provide them.

As all successful companies know, earning consumer trust is hugely important. We now need to understand the role of trust in building a solid and respected trading system and find ways to promote trade whilst respecting consumers’ needs and concerns.

Consumers have legitimate interests and concerns that – in their eyes - are as central to value as the cost of a product. We need to think about the information consumers are given about a product such as: the safety of the product; public health; or environmental impact (examples include: GM labelling, nutrition labelling, or warnings on cigarette packaging).

In many cases, national and regional regulations that reflect these consumer interests and concerns have been developed over many years and through heated national debate.

They are important to consumers and should not just be seen as “barriers to trade” that can be removed through international negotiations.

Increasingly trade negotiations are about behind-the-border, regulatory measures. In entering the realm of regulatory politics we need to tread carefully.

Of course there is a tension – companies want harmonisation to ease trade, but what about harmonising upwards on issues of genuine consumer interest such as food safety or labelling?

This is how those championing trade will build consumer trust.

How we consume and what we consume is changing.

Technology is now a much larger proportion of our consumption budgets: computers, smart phones, satellite television, broadband packages: digital products that weren’t available to consumers a generation ago. To varying degrees this is true in every region of the world.

Digital innovation is changing so much of what we do, and how we do it, that it has to be part of this discussion. Research (by the economists Andreas Lendle and Pierre-Louis Vezina) shows that technology-enabled trade does not benefit from existing trade agreements to the extent traditional trade does.

Let me point out some examples:

• Consumers are baffled that digital locks mean that the e-book they bought in, perhaps the US, can’t be read on their device when they go back home to the Netherlands for example.
• The online film that they bought on one device, doesn’t play on another one. Or if it does the user may inadvertently break copyright law.

Of course we need IP rules that balance consumers’ needs with rewards for innovation, but we clearly need to develop fair use rules that allow reasonable consumer behaviour that has limited, if any, impact on company profits.

Digital innovation also has the potential to change trade itself. Technology has enabled domestic trade to flourish and respond to consumer needs in ways that have transformed choice for consumers. Retailers can offer more choice and can be more responsive to consumers than at any time before.

Now cross border e-commerce is gradually taking off – creating the opportunity for consumers to engage directly with producers and retailers around the world.

This development has real potential – perhaps as the most democratic form of trade, with consumers themselves making choices and driving business.

But it is largely ‘under the radar’ for the WTO. It does not fit the mindset many trade negotiators have of trade. The question is, can these negotiators adapt their agenda to respond to these new issues that consumers themselves are raising?

To truly spread the benefits of international trade flows to consumers we need to see a renewed focus on competition enforcement and anti-corruption. We need to focus on earning consumers trust by respecting their concerns. And we a new focus on how consumers are using digital technology.

To be effective going forward we must all put consumers at the heart of trade. Because viewing trade from the bottom up will present a very different set of priorities than those currently on the WTO agenda.

Trade DOES matter to everyone.