Does e‐commerce fulfil its promise for developing country (South African) garment export producers?

Abstract

The adoption of e‐commerce applications is promoted in the developing world as a systemic innovation offering producer firms new exchange mechanisms that enable them to compete on a more equal basis in world markets. It promises a radical shift in the way in which international buyers and sellers trade with one another. Empirical evidence obtained from researching leading garment exporting firms in South Africa suggests that B2B e‐commerce is not as effective in reducing transaction costs or in opening up new global market opportunities as claimed by the “optimists”. It has only marginally altered trading and business patterns between international buyers and sellers in the garment industry. The findings indicate that trading relationships in this sector are fostered over extended periods of time, depend on non‐contract based activities and on complex information requirements and tend to be highly personalized. If B2B e‐commerce implementation is to become more widespread, much greater attention will need to be given to the tight and complex interdependencies between buyers and sellers, technological opportunities and constraints, related institutional issues, and the specific characteristics and positioning of South African garment producers within global value chains.