SME's in Laos

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Informatisation of SMEs in Laos

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SME's in Laos

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

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