The e-commerce industry and its effect on the world today.

Case Study- Nigeria

Samuel Amoo
74110829
Research Methods (16613)
Doros Michael
5/6/2020
Abstract
The entire world is rapidly evolving one dimension of the transition is shifts in economic
relationships between people, businesses , and governments. With the advent of the corona virus
in 2020, commercial trade between people based on paper documents is turning into transactions
with the use of electronic information processing systems. Electronic commerce on the planet is
turning into an undeniably famous type of exchange. Most customers begin searching for items,
portrayals and quality highlights online before purchasing an item. So as to give clients more
accommodation, we are seeing many new organizations and stores coming up with their own
online stores where an individual will be able to purchase in their time, including when many
businesses are done with their operations like evening time. In this research we seek to examine
all about e-commerce, we would look at the advantages, the weaknesses and the current situation
of electronic commerce in Nigeria.

Introduction
(Khan A.G 2016) Defines e-commerce as the purchasing and sale of goods and services over the
Internet. Apart from purchasing and sales, the Internet for many people is a place for knowledge
source to compare prices as well as view new items on sale before making an online purchase or
at a traditional shop. To this research, e-commerce would mean doing business electronically
(Lindsay P., 2002).

The year 1995 was the emergence of e-commerce and it is quickly changing the manner by
which enterprises are interacting among each other just as with consumers and Governments.
The technologies designed to improve the use of the Internet for commercial exchanges have
evolved.. Many have hailed it as an open door for many developing nations to increase their
reach to other parts of the world as well as increase trades.

The growth of Internet , mobile devices in combination with greater consumer trust will ensure
that ecommerce continues to grow and expand. As the internet-based life evolved rapidly in
recent years, business-to - consumer interaction are becoming more and more interactive, this is
in turn creating value-based transactions to happen online. Many of the stores online continue to
aim at producing quality products and also give a unique shopping experience. We see trade
picking up speed with mobile phone, the number of people buying from the palm of their hand is
also increasing by the day. E-commerce could bring enormous benefits to businesses in
developing countries by increasing their power over their place in the flexible chain, thereafter
increasing their market efficiency (Molla and Heeks, 2007). The worldwide business network is
moving rapidly towards Business-to - Business (B2B) with increasing dispersion of ICTs, more
specifically the Internet. Buyers have a clear advantage when the Internet provides them with
access to the worldwide market, whereby they can compare prices across regions, see if prices
fluctuate by fragmentation of orders, and gain awareness of alternative items. Because of market
openness, consumers can easily compare the offerings of the various e-commerce sites. At the
moment the rivals are one click away from the consumer in the case of e-commerce. On the off
chance that clients are not content with the items, prices or services offered by a specific
ecommerce site, they are able to change substantially more easily than in the physical.. From the
Sellers' perspective, they don't need to have physical existence of shop.

Research Objective
In this research our main objectives would be as follows:
1To acquire a global knowledge of e-commerce and to narrow it down to Nigeria
2The research would help us to identify the advantages of e-commerce in Nigeria
3 The research would help us to know the challenges combatting against E-commerce

Research Method

Qualitative method of inquiry was adapted in this research work, which relies on the use of
secondary data. The details that served as the basis for this study came from books , journals ,
newspapers, internet daily and other related official records and documents from business
organizations.

Research Questions
For this research the following questions are posed:
1) What is the impact of E-commerce in Nigerian market
2) How can development be ushered in (economic development) using ecommerce?
3) What are the factors combating against e-commerce in Nigeria?
Literature Review
The term commerce is seen as exchanges between business partners. Internet and e-commerce
are linked tightly with developing countries. In the event that it is appropriate as an ideal
business function, they will achieve tremendous benefits. E-commerce is a revolution in business
practices (Ohidujjaman, et al 2013). It is an evolving term describing the process of buying and
selling or exchanging products , services and data through computer networks via the Internet.
Commercial exchanges involve the exchange of value ( e.g., money) in return for goods and
services across authoritative or boundary. Value exchange is important for understanding e-
commerce restrictions. No transaction takes place without a value exchange. The e-business has
transformed processes inside and between businesses. Electronic Data Interface (EDI), widely
deployed on dedicated corporate networks twenty-five years ago, showed how data could be
transferred directly from the operating systems of one organization to the order processing,
production, and management systems of another (Clayton and Criscuolo). Any time the e-
commerce technologies are properly implemented, business process improvements and improved
efficiencies will result. (Jeffrey S. Beam 2011) Taking advantage of ecommerce technologies
may result in improvements for developing countries but the desired results have not yet been
achieved. In this way, the development of the internet and other online networks around the
world has created new business opportunities for e-commerce and the creation of completely
new sets of foreign and national trade relations. This contributed to the assumption that e-
banking and e-commerce are actually an unavoidable feature of the budgetary services. It allows
multiple buyers and sellers to come together on a typical stage and lead business without very
rapidly trading off individual needs and relationships among members; (Harris and Spencer,
2002; Bairagi, 2011). For the global economy, e-commerce is generating new opportunities, for
example in the retail and hospitality sectors worldwide. Moving from the traditional business
method to the e-commerce system would sure have its challenges and there was a wide variety
of elements for businesses to adapt with electronic trading factors (Nanehkaran, 2013). It is
emphasized that the e-commerce industry is quickly gaining strength and have become a critical
part of a powerful strategy and spring board for economic growth (Hasan, 2010 ).

E-Commerce in Nigeria
In Nigeria e-commerce is continuing to expand. The same is true also for the entire world. It
developed much more rapidly in Nigeria. Nigerians are gradually adopting e-commerce as their
favorite medium for the purchasing and sale of goods and services.
With approximately 60 million Nigerians now with internet access, huge growth is expected in
the the electronic market.

In Nigeria at the moment we have a huge population that is overwhelmingly young. There are
currently around 60 million Internet-connected Nigerians; thanks to the rapid growth of mobile
telecommunications. This represents about 36 per cent of the 170 million people living in
Nigeria. Around 300,000 online orders are issued each 24 hours in Nigeria. With enterprise,
technology and leisure, e-platforms will continue to expand. E-commerce has started to
contribute to Nigerian economic development. Firstly, e-commerce creates jobs for the over 20
million unemployed youth in the country, according to the National Statistics Bureau (NBS).
Although the actual jobs created since 2012 amount to just over 12,000 jobs.

ICT contributions to other sectors of the economy are also on the rise. ICT as at 2020 currently
contributes about 14.07% to the GDP in Nigeria.

On the off chance that more Nigerians have access to the internet this could have a positive
effect on the e-commerce industry. From the current $12 billion, the Minister expects online
utilization could be worth about $154 billion by 2025. The e-commerce market in Nigeria has a
potential size of USD 10 billion. The Nigerian e-commerce sector has attracted about 200
million dollars of foreign investment.

Benefits of E-commerce
There are many benefits of the e-commerce, considering consumers, the some of the best
benefits of ecommerce are listed below:

(1) Time saving- Consumer can buy or sell any product with the aid of the internet at any
time. • Access to knowledge is fast and continuous. Upon clicking a button, the customer
will have easier access to information check on various websites.
(2) Convenience- All transactions and sales may be made from the comfort of a home or
office or from the location where the consumer wishes. It is possible to make increased
comfort transactions Throughout a day and not need the presence of the client
physically. Turn to other companies-Customer can change the business easily at any time
if a company's service isn't satisfactory.
 (3) Customers may buy a product which is not available on the local or national market and
which gives customers a wider range of access to the product than before.
(4) Before making a final purchase a customer should review the product and see what others
are buying or reading other consumer reviews.
Here are some advantages of e-commerce, looking at it from the seller's point of view they are:
(5) Reduction of the price of purchasing and production.
(6) Reduces the cost of transports.
(7) Develops customer and supplier relationships.
(8) Improves the communication internally and externally.
(9) Increases revenue.
(10) Improves pace in sales process.

Challenges Faced in E-commerce

e-commerce has its share of challenges and both the sellers and the buyer have their peculiar
challenges using these, some challenges have been identified and analyzed below:

(1) In Nigeria we have a culture of buying a product only after prices have been negotiated
with the seller which is usually not possible for e-commerce.
(2) There is no joint presence of private and public companies to expand the e-commerce
sector. The development of the ecommerce business requires a private and a public joint
initiative. Joint projects bring credibility inside people, which is required for the
ecommerce industry to flourish.
(3) Customers lose their money if they hack the ecommerce website. The most common e-
commerce website issue isn't having sufficient security to combat hackers and scammers.
This shows that security, reliability is still lacking.
(4) Cutting internet prices is one of the biggest challenges. Authorities are trying to keep
bandwidth prices low. But the high cost of spreading networks continue to be and
hinderance when it comes to keeping prices low on.
(5) Confidence is the most significant consideration for using electronic settlements. In the
developed world , new laws introduced and impartiality applied in online transactions
 form the basis of trust. Where ecommerce-based transactions are not established legal
and judicial structures are at a disadvantage due to lack of protection whether actual or
perceived. Even today cash on delivery is the most accepted system in Nigeria we still
have issues with this and still find out that in many places credit cards or even cheque are
not readily accepted
(6) The new transaction processes, new instruments and new service providers would require
legal identification, approval and authorization. For example, it will be essential to define
an electronic signature and give it the same legal status as the handwritten signature.
Existing legal definitions and permissions such as the legal definition of a bank and the
concept of a national border—will also need to be rethought. In addition to the
aforementioned challenges, Nigeria also face these other challenges:
(8) illitracy
(9) Traditional culture
(10) Less commercialisation or promotion
(11) Political question
(12) High costs of goods / services compared with traditional markets
(13) Limited Internet coverage
(14) Communication over the country is haphazard
(15) A lack of trusted enterprise and business
(16) Lack of experience in meeting merchant and customer directly;

Data Protection, Law and Dispute resolution

Online security is in danger if customer information are not adequately protected. The truth
remains that protection of information cannot be over emphasized. In using the online mediums
you would often be required to use supply debit/credit cards details and through this means
essential data might be exposed to fraudulent people if there is no security.

Likewise, scarcely would we be able to separate a secure, safe e-commerce system from strong
intellectual property laws. The Copyrights protection under the Nigerian Copyrights Act must
come to mind. Simply categorizing software under 'literary works' won't sufficiently protect
intellectual property rights owners in the present computerized world.
e-Commerce is evolving rapidly in Nigeria. Be that as it might, we have seen a lot of delay in the
part of the law. Evolve needs to occur quickly. There is urgent need for more legislative action.
This will help battle the legal issues e-commerce will undoubtedly fling in Nigeria. A stronger
legal framework will provide a more secure and hearty stage for e-commerce development
correspondingly as we have seen in other part of the world.

Research Methodology
This chapter examines the methodology employed in carrying out this research project. It is the
authority base for the research. The essence is to guide the reader for proper understanding,
interpretation and reporting of the research findings.

Area of Research
The area of study covers Nigeria as a whole. The study covers the industries and companies in
Nigeria which are involved in trade through e- commerce

Data Collection
Data collection refers to the organized ways of obtaining the required information. In
conducting, this research work, secondary data collection were selected and analyzed.

Data Analysis
The method of analysis adopted for this study is both descriptive and inferential statistics. The
former helped to summaries the data obtained through the well-structured questionnaire while
the inferential statistics is ideal because of its potency in making, evaluating and generalization
from the data obtained.

Presentation and Data Analysis

We executed 100 copies of the questionnaire and that number was answered and returned. This
represents 100% in terms of response.
Characteristics Status Frequency Percent Valid Percent
      
Gender Male 42 42 42
       
  Female 58 58 58
  Total 100 100 100
Age Below 21yrs 3 3 3
  21-30yrs 34 34 34
  31-40yrs 52 52 52
  41-50yrs 9 9 9
         
  51yrs& above 2 2 2
  Total 100 100 100
Marital Status Single 46 46 46
         
  Married 52 52 52
  Widow 2 2 2
  Total 100 100 100
Highest SSCE 1 1 1
Educational OND/NCE 8 8 8
Qualification
B.Sc./HND 61 61 61
 
  M.Sc//MBA 30 30 30
  Total 100 100 100
Nature of
Trader 30 30 30
Employment
         
  Entrepreneur 40 40 40
         
  Banker 10 10 10
  Student 5 5 5
  Others 15 15 15
  Total 100 100 100
Table 1:Profile of Respondents (Source: Researcher’s field work 2020)

4.0 DATA ANALYSIS AND INTERPRETATION

108 copies of the questionnaires were executed and returned. This represents 71.52% of
responses from the 151 copies that had been earlier distributed.
Characteristic
s
Status Frequency Percent Valid
Percent
Cumulative
Percent
Gender Male 42 38.9 38.9 38.9
Female 66 61.1 61.1 100.0
Total 108 100.0 100.0
Age Below 21yrs 3 2.8 2.8 2.8
21-30yrs 34 31.5 31.5 34.3
31-40yrs 60 55.6 55.6 89.8
41-50yrs 9 8.3 8.3 98.1
51yrs& above 2 1.9 1.9 100.0
Total 108 100.0 100.0
Marital Status Single 55 50.9 50.9 50.9
Married 52 48.1 48.1 99.1
Widow 1 0.9 0.9 100.0
Total 108 100.0 100.0
Highest
Educational
Qualification
SSCE 1 0.9 0.9 0.9
OND/NCE 12 11.1 11.1 12.0
B.Sc./HND 61 56.5 56.5 68.5
M.Sc//MBA 34 31.5 31.5 100.0
Total 108 100.0 100.0
Years of
Experience
Less than 5
yrs
45 41.7 41.7 41.7
5-10 yrs 42 38.9 38.9 80.6
11-15 yrs 16 14.8 14.8 95.4
16-20 yrs 3 2.8 2.8 98.1
21-25 yrs 2 1.9 1.9 100.0
Total 08 100 100
Table 1: Respondents Demographic Profile (Source: Researcher’s field work 2019)

Question One
Do you understand the concept of E-commerce?
OPTIONS RESPONSE % OF TOTAL FREQUENCY

Yes 100 100

No 0

Not exactly 0

TOTAL 100 100

Table 2: Respondent understanding of what E-commerce means (Source: Field Survey, 2020)
 Table 2 table above that majority of the respondents know what is e-commerce. Since e-

commerce has to do with the internet and many people are now getting connected through the

internet, the term e-commerce can easily be understood since majority of the respondents are

educated and involved in e-commerce.

Question 2
For how many years have you being using E-commerce?
OPTIONS RESPONSE % OF TOTAL FREQUENCY
< 1 year 8 8
     
1<5 70 78
     
>5 23 23
     
TOTAL 100 100
     
Table 3: Respondent stating how many years they have used e-commerce (Source: Field
Survey, 2020)

Table 3 shows us that majority of the respondents which represents 70% began using the e-
commerce platform for over One year but less than five years. During this period was when
many E-commerce firms started to emerge in Nigeria.

Question 3
Are there Factors combating against E-commerce?
OPTIONS RESPONSE % OF TOTAL FREQUENCY

Yes 85 85

No 10 10

No idea 5 5

TOTAL 100 100

Table 4: Respondent stating factors combating against e-commerce (Source: Field Survey,
2020)

From the table 4 we see about 80% of respondent who believe that there are forces combating
against the e-commerce in Nigeria. One of the issues raised as always the internet crime factor.

Question 4
Has E-commerce helped other business transaction in Nigeria
 OPTIONS RESPONSE % OF TOTAL FREQUENCY

Yes 50 50

No 20 20

Somehow 15 15

No idea 15 15

Total 100 100

Table 5: Respondent stating how e-commerce is helping other business transactions (Source:
Field Survey, 2020)

Table 5 shows us From the above table, 50% of the respondents believe that e-commerce has
helped to improve business transactions in Nigeria, 20% believe that it has not improved
business transactions in any way. 15% of the respondents are still in doubt as to whether it has
really improved business transactions or not while 15% of respondents have no idea.

Question 5
Do you think E-commerce would survive in Nigeria?

OPTIONS RESPONSE % OF TOTAL FREQUENCY

Yes 70 70

No 20 20

Somehow 5 5

No certain 5 5

Total 100 100

Table 6: Respondent stating if e-commerce would survive in Nigeria (Source: Field Survey,
2020)

Table 6 reveals that 70% believes that E commerce would survive in Nigeria and as also come to
stay, 20% believe it would not survive and 5 are still in doubt and another 5 believe it would not
survive.

Question 6
Which is the most prominent domain in which e-commerce is used in Nigeria
OPTIONS RESPONSE % OF TOTAL FREQUENCY
Retail 73 73

Banking 23 23

Travel 2 2

Stocks & Shares 2 2

Total 100 100

Table 7: Respondent stating which domain e-commerce is predominantly used (Source: Field
Survey, 2020)

Table 7 shows that E-commerce is used more on retail transactions

Question 7
What methods would be recommended for promotion of e-commerce in Nigeria?

OPTIONS RESPONSE % OF TOTAL FREQUENCY

Promotion of Internet 80 80

To increase awareness 11 11

Integrated promotional approach 1 1

Other measures 8 8

Total 100 100

Table 8: Respondent method to be recommended for the promotion of e-commerce (Source:

Field Survey, 2020)

Table 8 shows us that 80 people believe that promotion of internet would help to promote e-
commerce in Nigeria. 20 people believe that by creating awareness e-commerce would be
promoted

Question 8
Do you think the Government of Nigeria is doing enough to promote E-commerce in Nigeria?
OPTIONS RESPONSE % OF TOTAL FREQUENCY

Yes 45 45
 No 55 55

No idea 5 5

TOTAL 100 100

Table 9: Respondent stating if the Government of Nigeria is doing enough for e-commerce
(Source: Field Survey, 2020)

Table 9 shows us that 45% of the respondent believe that the government is doing enough to
encourage e-commerce, while another 55% believe they are not doing enough.

Discussion of Findings

During this research the following findings are summarized below.

We see that a high percentage of individuals have understand the meaning of e-commerce and it

is widely accepted in Nigeria. It was also found out that economic development can be ushered

in using e-commerce through the various business transactions that are carried out on the internet

and that there are factors combating against e-commerce in Nigeria and this can be seen clearly

in the high rate of illiteracy, lack of access to internet and, unavailability of browsing network

and so on.

e-commerce has helped to improve business transactions in Nigeria due to its high rate of

convenience. Using e-commerce business can be transacted in the luxury of one’s home or

apartment and most cost incurred during business transactions are eliminated costs of

communication, transportation, cost of middlemen and so on.

Convenience remains one of the many advantages e-commerce brings to the customer and thus

increases customer satisfaction. That is because customers with internet access can put a

purchase order from anywhere. By providing smooth service and many payment options, the e-
commerce business provider must ensure that should importance is given to every single

customer and have more functions available online. The system of business continues to grow

and with the right support would continue to provide livelihood and ease to many.
Conclusion
In conclusion, we see that the government still has a huge role to play, from making a conducive

environment for investors to come in and do business in that area to the establishment of internet

browsing network in the country that is readily available in all parts of the country with that we

would see that e-commerce would be easier and more convenient. The persistent difficulty of not

getting internet access has prevented many Nigerians from engaging in e-commerce, but with the

browsing network, infrastructure issues would be solved and e-commerce would include more

Nigerians. Internet security would also need to be tackled as fraud in that area as been in the rise

as more Nigerians continue to come into the idea of e-commerce.

Additionally , public knowledge is crucial to the country's e-commerce growth. Many people

know e-commerce but lack the information, or how to use it, or how they can also profit from it,

and this has slowed the growth of the country's e-commerce services. Creating public knowledge

is therefore a critical move in the country's acceptance of e-commerce.

7411082

References

Almeida, G. A. A. et al (2007). Promoting ECommerce in Developing Countries. www.diplomacy.edu

Business Times 2003. A historical to assessing the role of e-commerce in economic development. Monday June 10, volume 40, No. 2,
pg 29.

Chavan, J. (2013). ‘Internet Banking- Benefits and Challenges in an Emerging Economy’. International Journal of Research in
Business Management, Vol. 1(1), pp. 19-26

Clayton, T. et al (2002). Electronic Commerce and Business Change

Harris, L. and Spence, L. J. (2002). ‘The ethics of Banking’. Journal of Electronic Commerce Research, Vol. 3(2)

Laudon, K. C., and Laudon, J. P. (2013). Management Information Systems: Managing the Digital Firm. Twelve Edition. Pearson.
Delhi.

Laudon, K. C., and Traver, C.G. Introduction to Ecommerce: business. technology. society. Fifth Edition.

Lindsay P. (2002), “E-commerce”, The Economist Books. p. 1

Miva, M. and Miva, B. (2011). The History of Ecommerce: How Did It All Begin?. http://www.miva.com/blog/the-history-of-
ecommerce-how -did-it-all-begin.

Molla, A., and Heeks, R. (2007). “Exploring Ecommerce benefits for businesses in a developing country”. The Information Society.
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Nanehkaran, Y. A. (2013). “An Introduction to Electronic Commerce”. International Journal of Scientific & Technology Research,
Vol. 2(4), pp.190-193.

Khan, A., G. (2016). ‘Electronic Commerce: A Study on Benefits and Challenges in an Emerging Economy’. Global Journal of
Management and Business Research: B Economics and Commerce, (16)

Ray, J. S. (2011). “Leveling E-Commerce Opportunities for Developing Countries”. SMC University. Swiss Management Centre,
Transknowlogy Campus

World Trade Organization. “E-commerce in developing countries: Opportunities and challenges for small and medium-sized
enterprises”.

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7411082

APPENDIX

University of South Wales

MBA
June 2020

Questionnaire

Dear Respondent,

I am currently a student of the above-named institution. I am carrying out a research on the topic “The e-commerce industry and its
effect on the world today. Case Study- Nigeria”.

I'll be grateful if you can honestly fill out the questionnaire by ticking against the answer that best suits that question. All of the
information contained herein shall be treated in confidence. Data is for academic purposes only, and helps with my work
Thank you very much

Yours truly,
Samuel Amoo

SECTION A
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7411082

1. Gender:

Male ( )
Female ( )

2. Age:

Below 21 years. ( )
21-30years. ()
31-40years. ()
41-50years. ()
51years. And above ( )

3. Marital Status:

Single ()
Married ( )
Widow ( )
Divorced( )

4. Highest Educational Qualification:

SSCE ( ),
ND/NCE ( ),
B.Sc/HND ( ),
M.Sc./MBA ( ),
others, please specify……………………………

5. What is the Nature of your business:

Traders ( )
Entrepreneur ( )
Banker ( )
Others ( )

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7411082

SECTION B

Instruction: Kindly tick options best indicates your option.

1. Do you understand the term e-commerce?

(a) Yes ( ) (b) No ( ) (c) Not exactly ( )

2. How many years have you being using e-commerce for sales/purchases?

(i)< 1year

(ii) 1 year < 5 years

(iii) > five year

3. Are there any factor(s) combating against e-commerce in Nigeria?

(a) Yes ( )(b) No ( ) (c) No idea ( )

4. Has e-commerce helped to improve business transactions in Nigeria?

(a) Yes ( )(b) No ( ) (c) somehow ( ) (d) No idea ( )

5. Do you think e-commerce would survive in Nigeria?

(a) Yes ( )(b) No ( ) (c) not certain ( ) (d) somehow ( )

23
7411082

6. What measure would you recommend for promotion of e- commerce in Nigeria?

(i) Promotion of internet

(ii) To increase the awareness level of people

(iii) An integrated promotional approach

(iv) Other measure

7. Do you consider the Government of Nigeria doing enough to promote e-commerce?

(i)Yes

(ii)No

(iii)Do not know/Cannot say

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