Global Commodity prices are at historical lows across all commodity groups. Countries which have traditionally relied on this asset class for job and economic growth are scrambling to find alternatives. The creation and nurturing of an innovative culture turns out to be difficult and costly to achieve. Russia, Malaysia and Chile have gone the technological innovation/Silicon Valley route without  any success. R&D and startup capital are scarce and success is certainly not automatic. Silicon Valley has a unique culture which is not easy to replicate.

 

The traditional Global Economic Development, Geopolitical and Geoeconomic strategies are dismal failures. The 9 years that the Soviet Union spent and the 11 years that the U.S. and its allies spent experimenting with nation-building in Afghanistan, the dead, the physically and mentally wounded, provide ample proof of this strategic fiasco.

 

Meanwhile, what is a roaring success is e-commerce. One of the most profitable of the world's e-commerce companies has found a way to be an e-commerce intermediary and yet grow at a sustained pace. Alibaba doesn't sell anything. Other firms display their wares on Alibaba and pay advertising  and other throughput and financing fees. TMall facilitates ad placement and compensation is expedited through  mobile banking. Financing for the purchase of goods displayed in TMall and other Alibaba sites is arranged. Other mass retailers are now copying this full service e-commerce model. Superb logistics provides delivery and convenience to the consumer.

 

China now provides online facilities for advertising product and settling sales through mobile payment. The mobile payment alternative provides settlement for markets located in remote places where there are few retail outlets. One of the support services associated with sales support and technology but not affiliated with Alibaba is M-Pesa, a mobile payment system prevalent in such countries as Kenya in East Africa. Mobile communications facilities provide the ability to place orders remotely through Whatsapp, for example. Small loans are provided through mobile communications.

My client in NY collects African orders on Whatsapp, gets paid through M-Pesa, has his local accounts credited in Kenya and arranges for the local currency to be converted to U.S. Dollars and credited to his local USD account in NY.  He uses the express bus system in Kenya as his Fedex or UPS.

 

This is all part of a new world of what I call "full service e-commerce." It is the conflation of marketing, sales, financing, payment, logistics, money transfer, currency conversion and communications. Some countries are adapting to the brave new world of full service e-commerce more fluidly than others. Other countries still believe in a legacy world of violence and military geopolitical hegemony.