IDEAS home Printed from https://ideas.repec.org/p/pui/dpaper/118.html
   My bibliography  Save this paper

Connecting Locals to Locals: Market Discovery through E-Commerce

Author

Listed:
  • Santitarn Sathirathai
  • Voraprapa Nakavachara

Abstract

Despite rapid growth in e-commerce, there has been little systematic research examining the impact of online commerce adoption on the entrepreneurs in ASEAN. Using a unique survey data of around 7,000 merchants on Shopee in Thailand, this paper seeks to fill that gap through a mix of econometric and trade connectivity analyses. We found that e-commerce adoption is associated with improvement in household incomes for the sellers. The benefits come from two different channels. First, e-commerce empowers existing SMEs by significantly boosting their revenue, efficiency, and profit growth. The improvement in profitability seems to go beyond a one-off gain as going online seems to also result in stronger profit growth rates. Second, our trade connectivity analysis illustrates how e-commerce allows merchants, especially those in the poorer regions, discover new market opportunity outside their own regions. In addition, e-commerce allows people of various employment status including full-time employees, homemakers, students, etc. to earn additional income, while maintaining other responsibilities.

Suggested Citation

  • Santitarn Sathirathai & Voraprapa Nakavachara, 2019. "Connecting Locals to Locals: Market Discovery through E-Commerce," PIER Discussion Papers 118, Puey Ungphakorn Institute for Economic Research.
    • Handle: RePEc:pui:dpaper:118
    as

    Download full text from publisher

    File URL: https://www.pier.or.th/files/dp/pier_dp_118.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Paul Dolfen & Liran Einav & Peter J. Klenow & Benjamin Klopack & Jonathan D. Levin & Larry Levin & Wayne Best, 2023. "Assessing the Gains from E-Commerce," American Economic Journal: Macroeconomics, American Economic Association, vol. 15(1), pages 342-370, January.
    2. Andreas Lendle & Marcelo Olarreaga & Simon Schropp & Pierre‐Louis Vézina, 2016. "There Goes Gravity: eBay and the Death of Distance," Economic Journal, Royal Economic Society, vol. 126(591), pages 406-441, March.
    3. Fan, Jingting & Tang, Lixin & Zhu, Weiming & Zou, Ben, 2018. "The Alibaba effect: Spatial consumption inequality and the welfare gains from e-commerce," Journal of International Economics, Elsevier, vol. 114(C), pages 203-220.
    4. Huang, Bihong & Shaban, Mohamed & Song, Quanyun & Wu, Yu, 2018. "E-commerce Development and Entrepreneurship in the People’s Republic of China," ADBI Working Papers 827, Asian Development Bank Institute.
    5. Victor Couture & Benjamin Faber & Yizhen Gu & Lizhi Liu, 2021. "Connecting the Countryside via E-Commerce: Evidence from China," American Economic Review: Insights, American Economic Association, vol. 3(1), pages 35-50, March.
    6. Victor Couture & Benjamin Faber & Yizhen Gu, 2018. "E-Commerce Integration and Economic Development: Evidence from China," 2018 Meeting Papers 114, Society for Economic Dynamics.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cong Peng, 2019. "Does e-commerce reduce traffic congestion? Evidence from Alibaba Single Day shopping event," CEP Discussion Papers dp1646, Centre for Economic Performance, LSE.
    2. Peng, Cong, 2019. "Does e-commerce reduce traffic congestion? Evidence from Alibaba Single Day shopping event," LSE Research Online Documents on Economics 103411, London School of Economics and Political Science, LSE Library.
    3. Yoon J. Jo & Misaki Matsumura & David E. Weinstein, 2019. "The Impact of E-Commerce on Relative Prices and Consumer Welfare," NBER Working Papers 26506, National Bureau of Economic Research, Inc.
    4. Fan, Jingting & Tang, Lixin & Zhu, Weiming & Zou, Ben, 2018. "The Alibaba effect: Spatial consumption inequality and the welfare gains from e-commerce," Journal of International Economics, Elsevier, vol. 114(C), pages 203-220.
    5. Zou, Wenbo & Wang, Jinjie & Yan, Jubo, 2022. "Online markets and trust," Journal of Economic Behavior & Organization, Elsevier, vol. 201(C), pages 395-412.
    6. Carballo, Jerónimo & Rodriguez Chatruc, Marisol & Salas Santa, Catalina & Volpe Martincus, Christian, 2022. "Online business platforms and international trade," Journal of International Economics, Elsevier, vol. 137(C).
    7. Wanda Dugiel & Ewa Latoszek, 2018. "Electronic Trade in the World Trade Organization - Difficulties in Negotiating an Agreement?," The International Journal of Economic Behavior - IJEB, Faculty of Business and Administration, University of Bucharest, vol. 8(1), pages 133-143.
    8. Samuel-Azran, Tal & Hayat, Tsahi (Zack), 2020. "The geography of the Arab public sphere on Twitter," Technology in Society, Elsevier, vol. 62(C).
    9. Krishnan, Pramila & Gunning, Jan Willem & Mengistu, Andualem Telaye, 2018. "Fading Choice: Transport Costs and Variety in Consumer Goods," CEPR Discussion Papers 12910, C.E.P.R. Discussion Papers.
    10. Zhou Jiang & Maoxia Zeng & Mingming Shi, 2023. "E‐commerce and Consumption Inequality in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(5), pages 61-86, September.
    11. Qing Wang & Wenjing Xu & Yanghua Huang & Jidong Yang, 2022. "The Effect of Fast Internet on Employment: Evidence from a Large Broadband Expansion Program in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 30(3), pages 100-134, May.
    12. Shuzhong Ma & Zengxi Hu, 2023. "Internet penetration and multi‐product exporters: Firm‐level evidence from China," The World Economy, Wiley Blackwell, vol. 46(5), pages 1444-1470, May.
    13. Yan Mei & Danling Mao & Yuhui Lu & Wei Chu, 2020. "Effects and mechanisms of rural E‐commerce clusters on households' entrepreneurship behavior in China," Growth and Change, Wiley Blackwell, vol. 51(4), pages 1588-1610, December.
    14. KOMATSU Sho & MA Xinxin & SUZUKI Aya, 2022. "Influence of E-commerce on Birth Rate: Evidence from rural China based on county-level longitudinal data," Discussion papers 22101, Research Institute of Economy, Trade and Industry (RIETI).
    15. Chen, Qiulin & Xu, Duo & Fu, Hongqiao & Yip, Winnie, 2022. "Distance effects and home bias in patient choice on the Internet: Evidence from an online healthcare platform in China," China Economic Review, Elsevier, vol. 72(C).
    16. Imad Jabbouri & Rachid Jabbouri & Karim Bahoum & Yasmine El Hajjaji, 2023. "E‐commerce adoption among Moroccan agricultural cooperatives: Between structural challenges and immense business performance potential," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(4), pages 1145-1171, December.
    17. Paul Dolfen & Liran Einav & Peter J. Klenow & Benjamin Klopack & Jonathan D. Levin & Larry Levin & Wayne Best, 2023. "Assessing the Gains from E-Commerce," American Economic Journal: Macroeconomics, American Economic Association, vol. 15(1), pages 342-370, January.
    18. David Atkin & Amit K. Khandelwal, 2020. "How Distortions Alter the Impacts of International Trade in Developing Countries," Annual Review of Economics, Annual Reviews, vol. 12(1), pages 213-238, August.
    19. Chung, Jamie, 2023. "The spillover effect of E-commerce on local retail real estate markets," Regional Science and Urban Economics, Elsevier, vol. 101(C).

    More about this item

    Keywords

    E-Commerce; Digital Economy; Connectivity; Thailand;
    All these keywords.

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • F15 - International Economics - - Trade - - - Economic Integration
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pui:dpaper:118. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/pierbth.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.