Exploring the Structural Conditions Shaping Business-to-Consumer Electronic Commerce

Abstract

This study investigated fifteen structural factors influencing B2C e-commerce penetration across country contexts. Data collected from secondary sources on a sample of 20 countries showed that e-commerce penetration depends on a country’s network readiness, institutional structures such as ICT laws, supply side labour skills, credit card penetration, per capita GDP and proportion of citizens online. Factors related to a country’s transportation infrastructure, its capacity for technological achievement and its degree of economic freedom are also of significance. The index of structural factors collectively accounts for approximately 76% of the observed variance in e-commerce penetration measured as the ratio of online shoppers to total internet users, and 80% of the observed variance in e-commerce penetration measured as share of total retail sales. The index provides a basis for ongoing analysis of e-commerce and its potential for growth. Results also have important policy implications.