Can Our New Government Propel Local E-Commerce?

Regardless of which side of the fence you’re on (and if you’re on it, ouch) the new government of Trinidad & Tobago is in charge of our affairs for the next five years. The PP Party is challenging as we all know, filing writs and such, but that’s another story, and someone else’s to tell. Here, I write about things that are relate to what I write about, in this case E-Commerce.

The thing about local politics and the Trini way is its predictability. Governments change, the candidates change, but the Trini style is constant regardless of the party in power. This means that my expectations of this government is the same (maybe a little lower) than the last in general and specifically when it comes to matters affecting E-Commerce in Trinidad & Tobago. My views on this current topic…

As far as legal policy goes to enable and promote local E-Commerce, you will recall that the Electronic Transaction Act (2011) was passed in the Senate by the last government. This was a big milestone given that e-commerce around the world started about 20 years earlier in the 1990’s. But they, and previous administrations, are not to blame because it was kept secret for all that time, only known to us and the rest of the planet. Kudos to government agent whoever made the discovery and brought it to light. I’m surprised that a statue hasn’t been erected in that person’s image.

Passing an Act is one thing, but it has to be ‘proclaimed’ to become law. To date, only half of it remains proclaimed, and you can read about it in my article E-Commerce in Trinidad & Tobago: An Overview of the Electronic Transaction Act (2011).

Because elections was looming and the economy un-booming I expected that it would remain where it was as described in that article. Now that the election is over and we have a new administration, I expect that it will remain there till the end of their term. If they are successful in re-election, I expect it to remain there, and if they are unsuccessful and a new government takes over, I expect it to remain there.

You may be questioning my pessimism, but both you and I have lived long enough in Trinidad & Tobago to accept how things work in this country. The probability that it may move forward does exist, but how high or low depends on the political or monetary expediency of such a move, i.e, there must be some political advantage to be gained, or some financial advantage to the party, minister, financiers, friends or family, and not necessarily in that order. You would notice the absence of anything to do with the interest of the country which has NEVER been on the list and WILL NEVER BE, and that’s regardless of the government in power. If that’s news to you, welcome to our planet.

The moves by the Central Bank and local banks in reaction to the acute shortage of US Dollars doesn’t impact local E-Commerce directly (it does indirectly which I’ll also explain), but is relevant because online shopping by Trinis is a huge contributor to the predicament. You may not have thought about it but the USD $500M+ annually that Trinis are spending are paid for by credit cards issued by our banks. The balances on these cards are paid for in TT Dollars but Visa and Mastercard are paid in US Dollars.

Visa and Mastercard payments cannot be deferred, i.e. when they require the funds, the US Dollars HAVE to be found and remitted by our local card issuers. This leaves our Trini businesses with whatever remains, and that’s getting less and less with falling revenues due oil/gas prices and unabated online shopping on US sites.

Whether the Ministry responsible for this will recognize that one solution to the US Dollar shortage can be via promoting local E-Commerce to have Trinis shopping online here remains to be seen. I’ll consider it recognized when the Minister or his/her friend/family/financier sets up their own online store.

Regardless, such promotion of local E-Commerce will only bring some ease, but ease nonetheless, as almost all goods sold online locally will be imported anyway. By business environment, I’m referring to the other areas within the Ministry’s realm that are part of the E-Commerce system, and other areas that can be used to promote use of the system. Among these are:

• Proclaiming the rest of the Electronic Transaction Act (2011)
• Implementing the local Postal Code system (an update on this coming in another article)
• Giving tax breaks or other incentives to set up local online stores- i.e store owners
• Giving tax breaks or other incentives to suppliers of locally manufactured goods sold online
• Giving tax breaks to local online shoppers themselves, say, no VAT on local online purchases

These are my suggestions to spark the debate to find the best ways so we can move forward and not all may be feasible. The fact remains that ALL the necessary moving parts for E-Commerce in Trinidad & Tobago are present and accessible right now, today, but it’s not moving fast enough ORGANICALLY to gain any momentum.

From the above you can gather that I’m therefore advocating direct governmental intervention to stimulate and promote local E-Commerce. This is notwithstanding the rest of the Electronic Transactions Act (2011) yet to be proclaimed because that’s not the reason local companies are still poking E-Commerce with a stick.

Trini businesses take their cues from government policy of course. However, while they may cry about the systemic deficiencies, they still know full well how to circumvent the systemic inefficiencies to their advantage. You know what I’m talking about- bribing the customs officers, falsifying import documents, keeping two sets of books, using one’s well-placed contacts etc., I don’t have to read and spell. So combined with the government policies, their own internal company ‘policies’ also contribute to the slowing going of local E-Commerce out the gate because the system is available here are now. What can those reasons be?

You know that most local business owners cannot see beyond the dollar, so to them the cost of an online store is a big expense. I agree, the cost is expensive BUT it’s not prohibitive, especially if one has the vision. For established businesses with physical stores, moving into online is even easier, more affordable, less risky and a natural evolution.

It seems that the current crop of youngsters growing up with technology a a natural extension is not enough a market to be ready for in the next five years. So much for vision.

The hue and cry over the $500M annually spent online is a classic case of hot and heavy then ‘boiling dong like bhagie’. I recall the heads of various business associations commenting and lamenting the loss of sales for local merchants, and if you read my article: Who’s fault Trinis spent US $500M shopping online last year? you’ll see where the President of the Chaguanas Chamber of Commerce Rishi Sookhai’s response was ” to turn Chaguanas, into a ‘tech-savvy’ city within the next year”. By the way, that was in response to 2014 sales, so I guess we should be looking out for tech-savvy Chaguanas around now in 2015. Personally, I wouldn’t hold my breath.

And you don’t hold your breath either, Chaguanas still isn’t a city and I seriously doubt any further action was taken to advance his plans, which made no sense anyway. What I’d like to see the heads of these business associations with their own online stores first before they talk about online shopping.

I don’t expect much from business associations anyway. They’re generally social and networking clubs that do the minimum to placate their members, pander to the government of the day and then dress up for cocktails at the Hyatt. So don’t wait for them to act on your behalf.

Trinis close their eyes and shop on US sites and will generally think three times and four before shopping on local sites, the few that exist anyway. This situation has been nurtured by Trini businesses for decades as it’s a well known fact that stores treat the shoppers like parasites so they don’t expect anything different online.

For the umpteenth time, Trinis want the US online experience here. If I have to tell you what it is, then online is not for you, sorry.

There are only two local banks offering a TT Dollar payment solution, and they are First Citizens Bank (FCB) and Scotiabank. Both banks use the same payment gateway via First Atlantic Commerce (FAC) of Bermuda.

Where do I start? For all intents and purposes, there is only one bank which is FCB, who I’ve worked with and continue to work with to provide E-Commerce to my clients. I can’t speak for FCB’s policy, but the individuals in charge of their Electronic Banking Unit take their job seriously and are great to work with.

Scotiabank on the other hand seems to be aloof and I don’t recommend them because I recommend FCB over them. And I also DON’T recommend them because I don’t think they want your business.

Little birds have told me that a couple of other banks are coming out with their own solutions, namely Republic Bank and RBC Royal Bank, but we’ll have to wait and see. The fact that Republic Bank hasn’t bothered before speaks volumes on how low a priority local e-commerce has been for them.

Local banks are indifferent to E-Commerce and even though moving toward it, are still dragging their feet.

Given the tone of this article thus far, you may be wondering how I can possibly talk about a silver lining! Believe it or not there is, and I do see it, and not out of optimism, but form actual on the ground experience.

You can’t fight fate. Though it’s taken two decades of worldwide E-Commerce to finally catch up on our tiny speck of an island, it caught up still:

• Before there were NO banks offering a TTD solution
• Then there was one: Scotiabank
• Then there was another one: FCB
• There was no legislation, now there is the Electronic Transactions Act (2011)
• There were no online stores locally, now there are multiple

Now it’s possible to buy movie tickets online from Movie Towne and other big companies are sure to follow. So though the wheels are turning slowly, it’s still turning, and that’s a good thing. As I write this I have a few online stores already in the works.

Almost EVERY DAY I get inquiries about E-Commerce so it’s only a matter of time when the market will pick up speed. At this point, it’s still a big step and a big chunk of change to get it off the ground.

An ‘AGGREGATOR’ is what PayPal is. That’s where smaller businesses can have access to a payment processor without needing their own merchant account to accept credit cards. PayPal and others, process payments on the member’s behalf for a fee, then transfers the rest of funds to a bank account.

Many Trini individuals and businesses would love to have their own online stores, though it be small with a handful of products, to offer a convenient way to pay online. PayPal is too much of a headache to work with in T&T because it forces on PayPal account holders to create an account to pay, which is a turn-off for shoppers, and it also limits the amount of funds you can withdraw in a month.

A local payment aggregator would open up the market for hundreds of smaller businesses that will more than likely never be able to afford the more expensive version.

As I write this my wife is ordering merchandise from several US online stores to be shipped to T&T via barrel. One reason is because it’s cheaper, the second reason is the quality. We’ve observed that that many name brands sold in stores here are cheap Chinese knock-offs that don’t last. And it’s not because the store owners don’t know, they’re deliberately passing them off as genuine.

Trini shoppers will eventually come on board when they have the same confidence in local online stores like they do for the US online stores. I know I would.

Once the money is there, the online stores will come. The money is there, because they have already started to come. The stores that figure it out, i.e. how to deliver the US online shopping experience, will win. It’s just that simple. Though these will be few in number, they’ll be happy to make all the money.

Ahem… there’s been a little delay with my online store directory, but it’s not my fault. Well actually it is because I’ve taken on more work than I can handle alone. Fortunately, I’ve been able to get things under control before it blew up in my face (see my article Announcing Official Forward Support- The Good & The Bad News). Now I should be able to deliver on my promise to have a dedicated Online Store Directory in time for the shopping season.

Truth be told I voted for Kamla. Not because I thought she was better, but because I thought the PP was the lesser of the two evils. I have NO CONFIDENCE in any government to seek any interest except their own. So it remains to be seen what this government does to either promote, or facilitate, or not obstruct, the continued growth of local E-Commerce in Trinidad & Tobago, which, despite it all, is on the march forward.