by Rotimi Okewole-Lawal
One of the characteristics of the past decade has been the digitization of the total economic sphere. In a matter of few years, the internet consolidated itself as a very powerful platform that has forever changed the way we communicate and also the way we do business. In an era of globalizing economies, many markets become increasingly international and competitive. Technological progress in logistics and distribution enables nearly every business to buy, sell and cooperate on a global scale. Even smaller and locally oriented businesses are forced to see themselves in a global context in order to survive in this new challenging business environment.
It is no news that the world is moving more and more into the digital realm each and every day. According to marketing research firm Coleman Parkes, 21-40% of modern business’s contributions are a direct result of E-commerce and that number is expected to grow rapidly over the coming years. With the growing impact of the digital community affecting the way business is done, now is the time to start thinking about an E-Commerce solution. In today’s competitive business world, having an online presence is more important than ever. This is particularly true if business firms wish to grow and extend their sales, most especially small and medium scale enterprises (SMEs). Hence the adoption of E-commerce has become an essential component of business strategy in order to remain competitive in the fast evolving global market. E-commerce basically encompasses trading or trading facilitation of goods & services, as well as the transmission of funds or financial data over an electronic network primarily the internet.
The emergence of E-commerce has helped business enterprises most especially SMEs compete in the market and thus contributes to economic success. The transforming power of this mode of business extends far beyond the obvious point of convenience for a consumer and cost savings for a business enterprise. This is a time when the opportunities for businesses to adopt E-commerce are growing due to improved access to technical and communication infrastructure. Modern economies are now increasingly characterized by a mass customization production model that integrates the average consumer’s needs into the production process. In order for modern enterprises to efficiently face this challenge, they have to increase their level of innovation so that they can provide new products & services, while at the same time compete with one another, E-commerce thus becomes a necessity of strategic nature. The power of E-commerce allows geophysical barriers disappear, making all consumers and businesses potential buyers and suppliers.
In Nigeria however, although the adoption of E-commerce has already began to gain popularity with the increasing number of people becoming IT literate and gaining internet access, we haven’t fully embraced and maximized it’s great potential. This is as a result of challenges pertaining to E-commerce being faced by a developing country like Nigeria. These major challenges include, inadequate online data security during payment transactions, lack of trust in online retailers, inadequate technological infrastructure and lack of proper awareness on E-commerce services & platforms.
Nevertheless, Nigeria has a great potential for E-commerce, despite the Nigerian economy sliding into recession in the second quarter of 2016 and the Naira incessantly suffering setback in the money market, some entrepreneurs believe this is just the right time to invest in the country’s budding E-commerce sector. According to Eghosa Omoigui, the Managing General Partner of EchoVC Partners, business investors who pay much attention to the macro negativity of the economy will miss out on spectacular opportunities. According to him, all the negative narratives about the Nigerian economy are at the macro level and do not greatly affect the micro-economy where most E-commerce activities are taking place and opportunities remain unchanged.
However, the government has an important role to play in the facilitation of E-commerce. The debate concerning the issue whether or not E-commerce is helping SMEs in a developing country like Nigeria improve her GDP is nothing more than a magical lure which distracts people from working hard. This perspective is understandable because a Nation where people have a minimum level of life, obviously cannot afford to construct an expensive city wide wireless network. Expensive infrastructure, costly connection devices, computer literacy are all obstacles but optimists are hopeful because they see access to an effective use of ICTs and networks of advanced knowledge-driven markets as critical to poverty reduction and creation of a better life. For Nigerian enterprises to remain competitive, it is important for owners-managers to understand the critical success factors related to E-commerce adoption. The adoption of E-commerce in Nigerian enterprises would help integrate these enterprises into the world’s fast evolving global village.