As a CEO of an online retailer, the best business orientation is the business-to-consumer model (B2C). Most of the developing countries have emerged to be potential customers in e-commerce agencies. The best deals attract the people in such countries at a lower price. However, customers from developing countries have shown interest in online retailing companies that can deliver the ordered goods promptly in the recent past. B2C will enable the time spectrum to be cut by half. Unlike the business-to-business model (B2B), B2C end users will get their products at a lower price (Huseynov & Özkan Yıldırım, 2019). B2B has efficient in handling a smaller number of clients that make more significant transactions. Therefore, B2B will not be effective in developing countries because people from these countries make more miniature packs of orders. Still, it makes the online retail shop realize good profits. Equally, B2C involves a direct link, making it cheaper because it does not include registering its subsequent depot or plant in various countries.
B2C is concerned about Entering a Developing Country Market
The B2C online companies use five distinct models to move their products. The first analogy is the direct sellers, whereby a product is sold directly to the consumers. For instance, once the consumer orders a product through the online platform, they are advised to pin their location and mode of shipment based on the urgency and availability of funds (Anwar, 2017). After they have completed filing the form, they can start tracking how their product is shipped and notified upon arrival (Gamble et al., 2016).
The second mode is being an online intermediary, and this is where the online retail does not own the product they are selling, but they link up the producer and the buyer. The online retail shop makes a profit by cutting the transaction fees. Most developing countries have governance and political structures that make it hard for international online retailers to do business. The legal formalities are unfavorable for global business entities.
The second concern of entering the developing country is the constant fluctuation of foreign exchange. The differences in currencies result in the need for normalizing the terms of payment. Online retail markets accept many modes of payment, and some of the most efficient ways of paying for shipment and services are unavailable in such countries (Anwar, 2017). Therefore, there are transactional trust issues because the customers may need the online retail service. Still, the financial conformities make it impossible for them to indulge. Developing countries have logistics problems because of the low infrastructural outlook (Gamble et al., 2016).
For instance, an airplane can only access some locations because connecting roads are impassable due to weather changes or natural causes. Technology is a hindrance in developing countries, and e-commerce relies on advanced technologies to market and affect service delivery. Other developing countries have issues with their telecommunication companies. Online retailing relies heavily on technological infrastructure and its support systems (Adam et al., 2020). There are socio-cultural barriers whereby most people from developing countries believe in having personal contact with the company providing service or product.
Condition for the Business to Succeed
The first condition is to build trust amongst various customers from developing countries. Trust is made based on ensuring all the services or products offered are delivered as required. Building trust starts from posting pictures or instructions about the services provided without luring people with pretense. Trust can be built by ensuring the customers pay for the services after receiving them. On the other hand, payment can be made after delivery to verify that they have been served the exact thing they wanted (Sukrat, 2018).
The online platform should have firewalls that restrict hacking from fraudsters. Hackers can jam the website and taint the business negatively hence pushing away customers to other e-commerce competitors. At times hackers look for Visa card or MasterCard data to withdraw funds from company customers.
The online website should be user-friendly with online standby support. Some people from developing countries might need insights on how to handle payments or place an order. Whenever the company is on standby to advise such people, they can initiate long-term processes that can enable the company to be profitable. The website should be free from bugs and other ads for online shopping to be productive (Sukrat, 2018).
The accessibility should be easier to navigate, and the mode of payment should be open-ended. The method of the shipment should be categorized based on urgency and terms of payment. For instance, if the customer needs their order to be shipped faster, they should quote a drop-off airport or best pick-up location. If they are not hurried, they should be charged less because using a ship cargo is also cheaper. Online retail should ensure they partner with major logistics companies to get the best deals for the customers. An example of international logistics companies includes DHL Supply Chain, DB Schenker, Nippon Express, Kuehne, XPO, Penske Logistics, and Ryder Supply Chain.
As a CEO, it is fundamental to ensure the online retailer adheres to the ethical framework to reduce friction between the internal decision-making spectrum and the general public outlook. Company image attracts many customers from developing countries because they feel safe to transact or do business. The B2C business model is efficient for an online retail business with no plans to open a branch in developing countries. It also saves a lot of time and legal procedures needed to operate outside the headquarters.
Adam, I., Alhassan, M., & Afriyie, Y. (2020). What drives global B2C E-commerce? An analysis of the effect of ICT access, human resource development and regulatory environment. Technology Analysis & Strategic Management, 32(7), 835-850. Web.
Anwar, S. (2017). Alibaba: Entrepreneurial growth and global expansion in B2B/B2C markets. Journal of International Entrepreneurship, 15(4), 366-389. Web.
Gamble, J., Thompson, A., Peteraf, M., & III, A. (2016). Crafting & executing strategy: The quest for competitive advantage: Concepts and cases (20th ed.). McGraw-Hill Education.
Huseynov, F., & Özkan Yıldırım, S. (2019). Online consumer typologies and their shopping behaviors in B2C e-commerce platforms. SAGE Open, 9(2), 215824401985463. Web.
Sukrat, S. (2018). A maturity model for C2C social commerce business model. International Journal of Electronic Commerce Studies, 9(1). Web.