E-Commerce, SMEs, and Economic Growth in Turkey: A Report

This report analyzes the impact of e-commerce on small and medium enterprises (SMEs), particularly within the context of the Turkish economy. It argues that e-commerce is crucial for SME growth, contributing to economic expansion and providing a means for resource expansion. The report presents three main arguments: e-commerce is key to small business growth, e-commerce contributes to economic growth, and e-commerce serves as a means of resource expansion. It emphasizes the role of government in supporting e-commerce initiatives and highlights the benefits of e-commerce, such as market expansion, improved communication, and enhanced product quality. The report also discusses the challenges and factors affecting e-commerce adoption, advocating for government financial support to foster e-business and increase the country's GDP. It also provides figures and data to support its claims.

Running Head: E-Business 1
Role of E-Commerce

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Contents
Introduction......................................................................................................................................3
Thesis statement...........................................................................................................................3
SME and E-commerce.................................................................................................................4
Role of government.........................................................................................................................5
Argument 1: E-commerce is the key for growth for the small businesses..................................6
Argument 2: E-commerce contributes to economic growth........................................................7
Argument 3: E-commerce as a mean of resource expansion.......................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10
List of figures
Figure 1: Factors affecting E-commerce.........................................................................................6
Figure 2: Individuals using internet.................................................................................................8

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Introduction
Various small and medium sized enterprises in the developing countries have
possibilities to gain benefits by the mobile technology, internet and other forms of information
and communication technology for the business activities. In the developing countries, small and
medium enterprises operate majority of the business in the manufacturing and services sectors.
So, the government and private sectors need to take high level of advantage and opportunities in
the ICT landscape. Along with this, governments need to make sure that the users of the internet
is only connected with the online tools but also from the technological innovations to enhance
the speed of data flow and reduce the cost of the customers (Jansen & Mullen, 2008). This report
focuses on the impact of e-commerce on the small and medium enterprise in terms of their
growth and success in the operating market. The report provides three arguments to support e-
commerce affecting small-sized business positively. The report is basically focused on the
statement of the research which is related to the improvement of e-commerce in the small and
medium enterprises operating in Turkey. This is a developing country and the organizations are
seeking for the business expansion in the global level (Voola, Casimir, Carlson & Agnihotri,
2012).
Thesis statement
For this report, the thesis statement is
“Turkish government should financially support e-businesses to enter world market in
order to increase GDP.''
The initiatives of government play an important role in the adoption of e-commerce. The
government has ability to make positive contribution to the development of e-commerce.
According to the research done by various researchers, come of the challenges related to e-
commerce cannot be addressed without the support of the government of country. In the
competitive environment of market, there is the close relationship between the systematic
operation of the business and existence and power of small and medium enterprises within the
system. Most of the Small and medium enterprises are contributing to the system and fulfilling
various functions which are not done by the large enterprises. SMEs have important roles in the
social life also. In the Turkish economy, SMEs play a crucial role due to their numbers and large

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share of workforce involved. The government of Turkey have also have carried out various
programs to support these enterprises. Currently, SMEs have a fundamental role in terms macro-
economic balance and employment by enhancing the shares in the global economy (Ho, Lu, Lee
and Peng, 2011).
SME and E-commerce
In the era of globalization and technological changes, there are various opportunities for
Small and medium enterprises. But at the same time, there can also be some risks and threats for
the business. It is considered that due to the flexible nature, SMEs can meet the expectations of
the customers more quickly and they have more advantages as compared to large enterprises by
using e-commerce. Due to the strong competition and much pressure of software, various
companies are seeking for new ways to enhance their market share by using e-commerce
solutions. Large companies have important human and financial resources to implement e-
commerce (Stokes, 2011).
Based on this discussion, the summarization of role of e-commerce in SMEs can be done
as follows. Due to the systems of e-commerce, SMEs are able to enter in new markets and
compete with other companies. Along with this, e-commerce provides effective communication
between buyers and sellers along with improving the product and service quality. It also
contributes positively to increase the work process of the business. By investing in e-commerce,
SMEs can reach the markets which they can never attain. Successful implementation of e-
commerce is a complicate and multivariate process which is related to economic and social
elements as much as technological, technical, legal and physical infrastructure (Kant & Narwal,
2014).
According to Rainer and Cegielski (2011), e-commerce can be describes as the process of
buying, selling, and exchanging and transferring the product, services or information by the
computer network including internet. The strategy of e-commerce is to achieve various
advantages in the business. The strategy goal of e-commerce enterprises is to develop new
advantages, reduce the disadvantages and maintain the existing benefits. So, strategy is to
provide better opportunities to the customers and deal with the competitors in the market
(Molenaar, 2012). The advantage of e-commerce is as follows:

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 Low-cost advantage- Buying the products and services at the affordable prices,
 Differentiation of advantage- providing products and services which are different and
unique in terms of functions and features,
 Focus advantage- Clearly meeting the requirements of the customers,
 Advantage of order fulfillment- High level realization of trading operations, and
 Management advantage- Capability to deal with the changes quicker as compared to
other methods (Kraft & Kakar, 2009)
Role of government
In the developing countries like Turkey, there is the need for the new metric of e-
commerce activities to inform the government legislation and policies. It is important to identify
the current state of e-commerce in Turkey and understand the current challenges and limitations
to enhance the adoption of e-commerce in the country. To address the problem of lack of
resources, there should be new methodology from the government of Turkey. There are
arguments which support that the government of Turkey should financially support the e-
business to enhance the GDP of the country. While adopting e-commerce in the country, there
are some factors affecting this process. In Turkey, there are some important factors which impact
on the e-commerce adoption. To explore the important of e-commerce and opportunity of its
growth in Turkey, it is important to understand various national factors that affect e-commerce
adoption. Various factors have been identified which are depicted in the figure. The figure
describes the impact of each factor on other factors. All these factors will be used in developing
the research model of e-commerce adoption by Turkish government (Feigenbaum, Parkes &
Pennock, 2009).

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Figure 1: Factors affecting E-commerce
From the above figure, it can be said that government initiatives are important for the
adoption of e-commerce in general. They can be in terms of the promotion of ICT usage,
education and the establishment of proper regulatory framework for e-commerce including tariff
and taxation for generating revenue by the e-commerce. Along with this, the initiatives of
government can also be affected by various factors including political conditions, economic
conditions, and external impact from other countries. This report provides some arguments
which support that the government of Turkey should financially support e-commerce for entering
in the market to enhance GDP rate (Tassabehji, 2003).
Argument 1: E-commerce is the key for growth for the small businesses
With the minimal capital outlay, the small and medium sized companies can easily
expand the business in the national and international market and locate more customers’ business
partners and suppliers. It means, with the help of e-commerce, companies can get more
opportunities in the international market and can enhance the sales in order to enhance the
revenue (Chang & Wu, 2011). There is the growing realization that selling the top quality
product at the best price is not only a fraction of organization but also it is effective for the
supply chain. So, the process of business improvements depends upon the expansion beyond
organizational boundaries. Electronic commerce is now used by various companies of different
scales such as business suppliers, customers, banks and public institutions, customs offices, and
provides savings in terms of time and costs. Because of electronic commerce, companies are able

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to check inventory status and reduce the inventory costs by supply-demand balance (Baig, Raza
& Farooq, 2011).
Because of the broad market and range of shopping opportunities provided by e-
commerce, organizations are able to perform advertising and marketing of the products and
services in all over the world. E-commerce is providing opportunities to the companies to open
the business in the new market without taking any taking any risk by establishing physical
offices and shops. By the e-commerce, products are delivered directly to the potential customers
by the online tools. For the Small and Medium Enterprises in Turkey, it is important to expand
the business at the international market. It is observed that customers are active on the online and
social media tools in the developed countries and they have ability to judge the products and
services by the online tools. In such case, Small and Medium Enterprises need to have their
presence on the e-commerce so that more and more customers can be attracted in the
international market (Strauss & Frost, 2014).
There is the drastic change in the ways of businesses and trades due to electronic
commerce. Every day, more users in the least-developed and developing countries are accessing
the internet by terminals. It is assumed that internet and use of mobile applications will expand
exponentially in the upcoming years. There is lots of potential for using e-commerce to
contribute to the social and economic progress of developing companies like Turkey in all over
the world. According to recent information of UNCTAD’s economy report, e-commerce is used
by micro and small sized enterprises in order to improve the performance of the business.
Various companies in the developing countries like Turkey have possibilities to benefit from e-
commerce in the business activities (De Mooij, 2010).

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Figure 2: Individuals using internet
By improving communication channels and e-commerce at the domestic and international
level, the application of relevant e-commerce can improve the competitiveness of the business
(Palmer, 2011). The efforts of government to enhance, upgrade and expand the e-commerce used
by private sector should be supported. The study of UNCTAD reveals that government and their
various partners are taking full advantage from the e-commerce.
Argument 2: E-commerce contributes to economic growth
E-commerce is gaining larger impact over the development and growth of the countries.
The introduction of e-commerce creates a tremendous contribution to growth of various
countries. Some researchers expect that the contribution of e-commerce will grow faster as
compared to the contribution from traditional sales. The e-commerce represented more than 80%
of the worldwide and has significant impact on the large economic sectors of the country such as
finance, communications, and retail. In Turkey, the idea of e-commerce is used in the business
sectors and now, various government and private sectors are also focusing on the system of e-
commerce (Sen, Bandyopadhyay, Hess and Jaisingh, 2008). The major support of the electronic
commerce went to promotion of e-commerce for the small and medium companies. With the
increased level of e-commerce, technology will grow for the small and medium enterprises of
Turkey. Along with this, IT sector will also grow which will enhance the national income of the
country. The technology trend eliminates the border of between online and offline and enhance
the experience of the customers and their knowledge in various areas. Turkey is important player
in the world including 46 million internet users and 58% internet penetration (Xiaoming, 2010).

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Argument 3: E-commerce as a mean of resource expansion
The system of the e-commerce is focused on reducing the barriers of entry for the
companies in the new market. Along with this, e-commerce is also helpful increasing the use of
internet by the development of the organization and provides the experimentation with the new
forms of the resource expansion. The e-commerce could allow the companies to tap into the
world market place and effectively generate the revenue to equalize the operating costs. The key
strategy of e-commerce is to sell products and services online to generate revenue to balance the
operating cost of the business (Rowley, 2001). The companies are approaching e-commerce as
the mean of covering not only the costs of producing products and services and distributing the
development focused products. Along with this, companies also seek to expand its revenue base
to support other project costs and then they may want to develop the e-commerce strategy and
platform so that more and more customers can be attracted by the company. Further, the
companies may have to approach e-commerce as the resource expansion activity that can be used
as the business strategies and marketing approach (Bernard & Simone, 2011). Good marketing
strategy is also included in the e-commerce for the business operations. E-commerce basically
creates online market for the customers to purchase the products and services. The online
platforms can be as the tool in order to capture the online market so; the electronic media is very
effective for the Turkish small and medium companies. Along with this, the electronic
techniques also include identifying other sites that that are beneficial for the cross selling of the
products. These sites include online partners and other sites that provide links to develop online
resources for the companies. Further, this technique also includes identifying the target market
who would be interested in purchasing the specific products in the global market. Companies can
also use e-mail to be connected with the customers. In this way, developing countries will be
able to expand the business in all over the world (Occena & Yoon, 2015).
Conclusion
This report basically focuses on improvement of e-commerce and mobile technology as it
is well known that these systems have transformed the lives of many people in the developing
countries. Report supports the thesis statement that government of Turkey should support e-
commerce to enhance GDP rate of the country and support SMEs to enter in the world market.
Along with this, three arguments are also provided to support positive impact of e-commerce on

E-Business 10
the business and country. From the above discussion, it is observed that e-commerce provides
effective communication between buyers and sellers along with improving the product and
service quality. E-commerce also contributes positively to increase the work process of the
business. Along with this, it is also analyzed that E-commerce is providing opportunities to the
companies to open the business in the new market without taking any taking any risk by
establishing physical offices and shops. E-commerce basically creates online market for the
customers to purchase the products and services. The online platforms can be as the tool in order
to capture the online market. So, government of Turkey should focus on the various e-commerce
sites and tools and try to provide them to the organizations along with supporting in financial
terms.

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search engine: Journal of Electronic Commerce Research, 9(1), pp. 33-50

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