CellBazaar, a Mobile-Based e-Marketplace: Success Factors and Potential for Expansion

Posted by AnneryanHeatwole on Oct 22, 2009

Ayesha Zainudeen, Rohan Samarajiva, Nirmali Sivapragasam
Publication Type:
Report/White paper
Publication Date:
1 May 2009

In emerging economies, access to accurate market information can be limited by poor, underdeveloped or even absent infrastructure. Countries are poor, partly because markets do not work well and markets do not work well, partly because of information problems. Isolated and poorly informed, farmers, traders and businesses simply cannot participate in commercial exchanges, and even when they do, tend to have limited bargaining power. Telecommunication can serve to ease such limitations (Jensen, 2007).

Infrastructural bottlenecks can also constrain physical access to markets; even if a farmer has access to current market prices. If he cannot get his produce to the right market before it perishes, that market information is useless. In Bangladesh, problems such as flooding, frequent electricity outages as well as urban congestion (CKS Consulting, 2009) only serve to compound such problems. This is not just so for agricultural markets, but even the market for second hand goods, services, and much more.

Electronic commerce (e-commerce), or the conduct of commercial transactions over electronic networks (OECD, 2002) has been seen as a way of reducing friction in the marketplace; this allows larger volumes of transactions to take place, effectively expanding markets, but also opening up entirely new markets (Mann, Eckert and Knight, 2000; Steinfield and Klein, 1999), allowing marketers (large and small) to exploit the Long Tail (Anderson, 2006).

In developed economies, e-commerce has taken the form of commercial transactions being facilitated over the Internet, but recently has been extended to mobile networks as well, owing to their growing ubiquity. In emerging economies poor Internet penetration and the lack of secure payment mechanisms, inter alia, have slowed the growth of e-commerce.  Meso, Musa and Mbarika (2005) note that there is little empirical evidence of success of mobile commerce in the developing world; most evidence is anecdotal. However, as this paper will show, e-commerce is in fact taking place over these networks, even if not in the same form as in developed economies.