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Informatisation of SMEs in Laos

Informatisation of SMEs in Laos

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  • 1. Informatisation of SMEs in Laos Regional Seminar on Informatisation of SMEs in GMS countries 20-21 July 2006 Kunming, PRC Oudet Souvannavong Vice-President Lao National Chamber of Commerce and Industry Executive Board Director, SME Promotion and Development Committee
  • 2. SELF INTRODUCTION
    • A business man who owns 5 SMEs in the service sector (Hotel, restaurants, handicraft & souvenir workshops and ICT)
    • In communication: owner of one of the 5 Internet Service Providers Lanexang Internet Service (LIS)
    • Participation in the Lao Hotel and Restaurant Association e-commerce portal www.laohotelgroup.org that is one of the few portal selling service online in Laos.
    • Preparation of a Regional Hospitality e-portal “Destination SE-Asia”
  • 3. ROLE OF SMEs IN LAO PDR
    • Private sector dominates the economy of Laos
      • 99% in term of number of enterprises
      • 94% in term of employment
    • Definition of SMEs in Lao PDR
    Rate: 1 US$ = 10,000 Kip <2,100 <1,000 20-99 Medium <250 <400 1-19 Small Total assets in million Kip Annual turnover in million Kip Number of employees Category
  • 4. SME IN LAOS SMALL = Micro + Small 79% SME = SMALL + MEDIUM 95%
  • 5. INTERNET SERVICE PROVIDERS IN LAOS
    • There are 5 ISPs operating in Lao PDR
      • Planet On Line : Broadband wireless; dial-up, prepaid cards
      • Lanexang Internet Service (LIS): broadband wireless; dial-up; ADSL
      • Laotelecom: broadband wireless; dial-up; ADSL; prepaid cards
      • ETL: Broadband wireless; dial-up; ADSL; prepaid cards
      • Laosky: dial-up; ADSL; prepaid cards
  • 6. e-business and e-commerce in Laos
    • There are very limited e-commerce portal. The operation of e-business and e-commerce is limited due to:
      • e-B&C is a very new concept. Little known about the culture and technologies that drive e-B&C. Benefit from e-B&C is not considered.
      • Number of internet users are still low to justify investment in e-B&C operation.
      • Lack of expertise and experience. Local business use their sites only as advertisement tools. No sales of products online.
      • Product marketing is very localized not expanded out of the country
      • Lack of credit card system, e-banking for initiating payment
  • 7. SME’S ACCESS TO INTERNET
    • Internet is accessible in le main cities through dial-up, ADSL and wireless. In rural areas (small cities) internet is accessible through dial-up. Internet café are available in large and small cities
    • Very few SME utilize the internet to advertise and sell there products because.
      • Do not have the proper education to utilize computer and informatics
      • Lack of knowledge about marketing and e-commerce
      • Expensive cost of investment in computer equipment, website design and maintenance
      • There market is limited locally inside the country
    • There are limited supporting institutions
    • There are limited “Logistic Chain of Supply” linking to the world market.
  • 8. SUPPORTING INSTITUTIONS / SMEPDO
    • SMEPDO Information for SME Development (Website: www.smepdo.org ) provide data information for SME on:
      • SME related national law and regulations
      • Import-export regulations
      • Procedures for establishing new business enterprises
      • Small data base on enterprises by sector
      • Link with other business provider for market information
    SMEPDO ( SME Promotion and Development Office) role to coordinate and support promotion and development; and productivity improvement of SMEs
  • 9. SUPPORTING INSTITUTIONS / LTPC
    • Lao Trade Promotion Center (LTPC)
      • Assist Lao manufacturers and exporters to fulfill their production potentials and marketing process
      • Assist the government on research;
        • Export promotion
        • Promotion of trade
        • Exhibition & trade fair
        • Overseas market analysis
        • Providing information on marketing processes to businessmen
    Website: www.laotrade.org.la associated to gmseb project provides a range of SME export products
  • 10. SUPPORTING INSTITUTIONS / LNCCI
    • Lao National Chamber of Commerce and Industry (LNCCI) role and duty
      • Negotiating on commerce, industry and services (FTA, GSP, Mutual recognition etc.)
      • Issuing certificate of origin
      • Approving establishment of Business Organizations
      • Promote trade and investment
      • Promote SME development
    Web site: www.lncci.laotel.com provides information on business organization including SME
  • 11.
    • There are 25 Official Professional Business Associations in Lao PDR only 3 of them have a website:
      • Lao Handicraft Association www.laohandicrafts.com
      • Lao Consulting Company Association www.laoconsultants.com
      • Lao Hotel and Restaurant Association (LHRA) www.laohotelgroup.org
    • Only LHRA provides products on line
    SUPPORTING INSTITUTIONS / PROFESSIONAL BUSINESS ASSOCIATIONS
  • 12. INFORMATISATION OF SMEs/CHALLENGES
    • Laos has a very open policy on ICT and IT business environment is improving;
    • Price of telephone call and internet is getting cheaper and cheaper due to competition;
    • Lao economy growth fast at 7% per year;
    • Selling of SME products is delocalized and more export is made ;
    • Many SMEs are engaged in communication through email and selling through the internet especially in the service and manufacturing sectors.
  • 13. PROPOSED STRATEGY FOR INFORMATISATION OF SMEs IN LAOS
    • A sector base approach for the informatisation of SME
    • Create a e-commerce platform for each specific group of products (based on existing professional business associations)
    • Develop directory (data base) of Lao products and services and incorporate the directory into the e-commerce platform.
    • Develop a logistic chain of supply including payment system (through e-finance and banking) for each professional business association portals.
    • Provide information, training and coaching to SMEs in marketing their products through the e-commerce portal.
  • 14. EXAMPLE FOR HOSPITALITY SERVICES
    • Lao Hospitality Services e-B&C Portal:
      • Airlines e-portal (Multinational)
        • air fares for all destinations in Laos
      • Travel Agent e-portal (Joint multinational & SME)
        • In-bound tour packages to all tourism sites
        • Transfers and hotels
      • Lao Hotel and Restaurant Association e-portal (Joint multinational & SME)
        • Transfer, hotels, F&B, SPA, leisure etc.
      • Lao Handicraft Association e-portal (SME)
        • Handicraft, jewelry and souvenir products
      • Retail shops e-portal (Joint multinational & SME)
        • Fashion Branded products, food, handicraft, jewelry and souvenir products
      • Entertainment e-portal (Joint multinational & SME)
        • Golf, Health Club, SPA, KTV, Casino, etc.
  • 15. VALUE CHAIN FOR SME IN THE e-B&C PORTAL SME Products Listed in product directory of sub-sector Through marketing improvement (quality standard, packaging etc) Posted in the Internet SME Promotional CDR-DVD BUYER E-commerce Portal Logistic Supply Company Financial Institution Order Order Delivery Payment
  • 16. POSSIBLE GMS E-COMMERCE PORTAL
    • Linkage country e-commerce and GMS e-commerce portal (gmseb.com)
    • Linkage country logistic chain of supply to “Asia Chain of Supply” or “GMS logistic chain of supply” (to be created)
    • Define clear GMS standard and certification for SME products (including rule of origin)
    • Selection of Bank to perform e-banking to support the GMS e-commerce portal
    • Selection of e-commerce operators for the GMS e-commerce portals (sector wise)
  • 17. ADDITIONAL SUPPORT TO SME
    • Open more internet centers for SME
    • Provide training in how to use internet to SME
    • Provide training in marketing SME products through the e-commerce portal
      • Product design
      • quality and origin certification
      • Product presentation and packaging
      • Producing product specification for the product directory
    • Provide training in international contract and finance
      • Learning international contract laws and commercial regulations
      • Learning international insurance policies
      • Learning payment through banking (letter of credit, bank draft, credit card etc.)
    • Access to Finance
      • Provide soft loan to SMEs who enter the SME informatization process
  • 18. Thank You I want to thanks to the Yunnan Government, UNESCAP and the Organizing Committee for providing support to this historical conference Finally I fully support the launch of the gmseb e-commerce portal and I will personally enhance the cooperation between the existing Lao e-commerce portals and the gmseb .