School of Business Information Technology, RMIT University

This 19-page research paper explores the role of e-business in the Fair Trade Supply Chain (FTSC), including the opportunities, current utilisation, and challenges of the use of information and communication technology (ICT), as well as the social and developmental implications of e-business. Its objective is to “identif[y] some of the issues of implementing e-business in Fair Trade, a sector which has poverty alleviation and equitable development, rather than profit and share holder value maximization, as its key performance indicators."

According to research quoted by the author, there is little evidence that e-business, resulting from the availability of ICT in developing countries, has delivered market access benefits other than increasing the flow of market information in an environment where the market has already been accessed. Prior researchers cite structural and systemic challenges, such as subsidies or pricing collusion of transnational organisations, for example, as reasons for a shortfall in e-business benefits. However, Fair Trade represents a trading scheme, established to create better trading conditions, market access, and fair price for producers, that is designed to address some of the structural challenges commodity-dependent developing nations face in global trade.

The structure of Fair Trade, according to the author, should be well-suited to the "systemic competencies of e-business". It should be able to improve coordination of trade and reduce marketing costs by linking producers and consumers directly. In order to "map" the use of e-business in Fair Trade, the author gathered web-based data using e-business maturity indexing to identify features used by producers, umbrella structures (such as Fair Trade consulting organisations), and traders. Key informant interviews were also used.


The author documents the history and maps the structure of the FTSC as it has evolved - now including not only producers and consumers, but certification, labelling and standard setting organisations, licensing, manufacturers, traders, and subcontractors. The challenges at each level of movement along the chain are listed, highlighting problems of poor information flow and lack of coordination; lack of visibility; inaccessible market and producer information; limited producers’ capacity to access markets; and a high cost of trading. As stated by the author, e-business offers opportunities that can address these challenges.

The paper describes a variety of uses of ICT in business environments and then focuses on those applicable to the FTSC, including the opportunity to exchange information, to secure orders online, and to improve coordination and collaboration along the supply chain. Websites can offer direct e-commerce for some products, though commodities need further processing and branding before being marketed. Fully functional producer sites with ordering capacity online were few in number, according to data offered in this research. Email was used in ordering on some sites, whereas others had no transactional functionality. Fair Trade branding and marketing using production information was not common on the producer sites surveyed.

However, Fair Trade umbrella organisation sites sometimes offered more functionality as catalogue sites, but had the added complexity of carrying products with competing prices, which shifts the focus from being producer-centric to being buyer-centric. E-marketplaces serve the FTSC in a variety of ways, including storefronts, product development, market research, and catalogue development and hosting. The author looked for e-collaboration in surveying sites and found that it was limited, but some sites offered a degree of the following: receiving producers’ information about new products (such as pictures, and product samples); receiving transaction information (such as invoices and shipping orders); receiving the evaluation of commercial relations by producers; and sending feedback to producers on sales and market trends and general information about the importing organisation.

The recommendation of the author for further international recognition and credibility of Fair Trade is to improve quality of service and promote the Fair Trade agenda by harmonising efforts and activities of sites that give information on Fair Trade criteria and certification; reduce duplication of web-based contact forms matching producers with traders and manufacturers; increase visibility of producer stories and information on commodities offered; and continue using members-only platforms for communication, administration, and management of supply chain systems.

The paper cites a challenge stemming from the producer-driven nature of Fair Trade. Where a large multi-national company might require a certain level of technology of its suppliers, smaller producers in developing countries are not likely to purchase, maintain, and upgrade ICT systems with the connectivity and interactivity to facilitate on-line applications, product support, and e-learning, e.g. on-line assistance in product development. The use of open source tools is suggested by the author, though with the caveat that further research is needed.

Proceedings of the 9th International Conference on Social Implications of Computers in Developing Countries, São Paulo, Brazil, May 2007.