With Papua New Guinea’s soon-to-be-completed National Transmission Network likely to bring improved internet speeds and reliability by the end of the year, more PNG companies are expected to explore the possibility of selling goods and services online. Andrew Wilkins looks at the potential for ecommerce in PNG.
Until recently, PNG’s slow bandwidth and high internet costs have acted as a barrier to entry for many companies looking to conduct ecommerce. But that situation is changing, as internet prices come down and bandwidth increases.
According to International Telecommunications Union estimates, less than 10 per cent of Papua New Guineans had access to the internet in 2014. While this sounds like a small figure, it represents a trebling of access over the previous three years.
‘It is no surprise that PNG’s financial institutions, hotels and airlines have led the way in ecommerce.’
Participation can be expected to grow quickly in coming years, with the expected completion of PNG’s National Transmission Network at the end of this year and the expansion of data-enabled mobile phone networks to cover almost all of the population. There has already been increased competition among internet providers on price.
Goods and services that can be delivered digitally with a simple electronic payment—think tickets, vouchers, reservations and money transfers—are the obvious place to look first for ecommerce opportunities. It is thus no surprise that PNG’s financial institutions, hotels and airlines have led the way in e-commerce. Many already have mature offerings.
‘No need to visit a sales office, no need to stand in line. Clearly, there are benefits for both customer and vendor.’
Booking a hotel room online in PNG is now common—and a website like villagehuts.com has shown that ecommerce isn’t just for the big guys. It has been possible to book tickets with Air Niugini for some years with a credit card. Recently, the airline partnered with Bank South Pacific to integrate its online booking system with BSP’s mobile banking platform.
This innovation means customers can book a ticket online without a credit card, paying for it with money in their BSP bank account. For a country where credit cards are not common, this is a significant development.
Commenting on the new solution, BSP’s General Manager Retail Banking, Paul Thornton, outlines the customer benefits that ecommerce can deliver:
‘The fact that our customers will now be able to purchase their tickets through BSP Mobile Banking … underscores our commitment to ensuring convenient and cheap solutions that save time, effort and money.’
Meanwhile, Moni Plus provides online money transfer services on its website, ’24 hours a days, five days a week’. No need to visit a sales office, no need to stand in line. Clearly, there are benefits for both customer and vendor.
Selling physical goods
Some enterprising retailers are already offering the opportunity to purchase goods online, despite the fact that transporting goods around PNG presents a logistical challenge.
Fortuna Online is an online supermarket owned by Vitis Industries. It offers food, beverages, home appliances, clothing, hardware, pharmaceuticals and even vehicles for sale online (a DFAC truck for K155,000, anyone?). It offers free delivery to select locations in Port Moresby and Lae, with pickup centres servicing other areas.
‘The main idea is to reach our customers directly without middlemen like distributors, supermarkets, shops etc,’ Vitis Industries’ General Manager Sergey Mosin explains to Business Advantage PNG.
‘Online stores can be used to export. This is especially suitable for goods that are peculiar to the country, such as PNG coffee and traditional handicrafts.’
‘We also try to follow the modern trends in new communication technology. Right now, the internet in PNG is still slow and expensive, but we are looking at three-to-five years in the future, when the internet will be fast and cheap and millions will be connected—we want to be first in the new PNG cyberspace.’
Able Home & Office sells office equipment across PNG, but charges for delivery, partly by passing on postage or courier costs to the customer, and partly by pricing products differently depending on what region of PNG the customer is ordering from.
While Fortuna and Able are focused on servicing the market within PNG, online stores can be used to export. This is especially suitable for goods that are uniquely Papua New Guinean, such as PNG coffee and traditional handicrafts.
Perhaps the biggest driver of ecommerce—after increased bandwidth and lower internet costs— is the availability of the necessary technology and the cost of creating web sites.
Selling online also enables businesses in the more remote parts of PNG to overcome the tyranny of distance—the internet allows Banz Kofi to reach worldwide markets from its Mt Hagen roasting facilities.
Cost of entry drops
Perhaps the biggest driver of ecommerce—after increased bandwidth and lower internet costs— is the availability of the necessary technology and the lowering cost of creating web sites.
As delegates to the APEC Business Advisory Council’s SME Summit in Port Moresby learned last month, low-cost website building platforms (such as WordPress, Squarespace and Adobe’s recently-launched Portfolio) mean any small business in PNG can put up a basic ecommerce-enabled website in hours or days, rather than weeks or months.
To this extent, the internet offers a level playing field for any PNG entrepreneur with a good idea and a sound business plan.
This article was first published on businessadvantagepng.com, Papua New Guinea’s online business magazine.