Lao Peoples Democratic Republic

Informatisation of SMEs in Laos : 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


SELF INTRODUCTION : 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”


ROLE OF SMEs IN LAO PDR : 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


SME IN LAOS : SME IN LAOS SMALL = Micro + Small 79% SME = SMALL + MEDIUM 95%


INTERNET SERVICE PROVIDERS IN LAOS : 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


e-business and e-commerce in Laos : 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


SME’S ACCESS TO INTERNET : 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.


SUPPORTING INSTITUTIONS / SMEPDO : 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


SUPPORTING INSTITUTIONS / LTPC : 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


SUPPORTING INSTITUTIONS / LNCCI : 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


SUPPORTING INSTITUTIONS / PROFESSIONAL BUSINESS ASSOCIATIONS : 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


INFORMATISATION OF SMEs/CHALLENGES : 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.


PROPOSED STRATEGY FOR INFORMATISATION OF SMEs IN LAOS : 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.


EXAMPLE FOR HOSPITALITY SERVICES : 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.


VALUE CHAIN FOR SME IN THE e-B&C PORTAL : 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


POSSIBLE GMS E-COMMERCE PORTAL : 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)


ADDITIONAL SUPPORT TO SME : 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


Thank You : 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.