A CRITICAL INVESTIGATION OF THE FACTORS INFLUENCING THE ADOPTION OF E-COMMERCE IN NIGERIA.

CHAPTER ONE:

INTRODUCTION

1.1 Background of the study

Advances in information and communication technologies and the emergence of the internet have revolutionized business activities enabling new ways of conducting business referred to as electronic commerce ( Turban, King, Lee, & Viehland, 2004). Electronic commerce (ecommerce) describes the process of buying, selling, transferring, or exchanging products, services, and/or information through computer networks, principally the Internet (Turban et al., 2004). Electronic commerce can also be defined as “the sharing of business information, maintaining of business relationships, and conducting of business transactions by means of telecommunications networks” (Zwass, 2003). Electronic commerce activities include the inter-organizational processes of market-based sell-buy relationships and collaboration (known as business-to-business, or B2B, commerce) and consumer-oriented activities (business-to-consumer, i.e., B2C, and consumer-to-consumer, or C2C), as well as the intra-organizational processes that support them (Zwass, 2003). Electronic commerce as a way of doing business has significant advantages; organizations are embracing e-commerce as a means of expanding markets, improving customer service, reducing costs, and enhancing productivity (Wenninger, 1999). Efficiencies are experienced in marketing and advertising; ecommerce makes disinter-mediation possible, eliminating the middleman (Turban et al., 2004). Other efficiencies include reduced inventory and round the clock access at no additional cost. Ecommerce enables higher customization (Choi & Whinston, 2000) allowing organizations to improve customer service. A vital benefit of e-commerce is access to global markets which enables businesses to expand their reach. The Internet allows for unconstrained awareness, visibility and opportunity for an organization to promote its products and services (Senn, 2000). Despite the global reach of e-commerce, not all countries have taken advantage of or benefited from e-commerce. There is a big gap in Internet and e-commerce adoption between the developed and developing countries (Licker & Motts, 2000); thus creating a digital divide. Digital divide is defined as the “differential capabilities of entire social (or regional) groups to access and utilize electronic forms of knowledge” (Straub, 2003), segregating the ‘haves’ from the ‘have-nots’ in the information society. Mbarika, Okoli, Byrd and Datta (2005) state that much of the discussion on digital divide has focused on that which occurs among different social groups; they note the existence of international digital divide between countries. According to them this digital divide is abundantly clear when comparing Sub-Saharan Africa with countries of the west like US or UK. One area where international digital divide is evident is in electronic commerce, one only needs to examine the major e-commerce sites to detect the inequality. The main obstacles that prevent developing countries from leveraging the internet are lack of adequate communication infrastructure, technical know-how, and information processing 2 about the economy and environment. The lack of adequate banking infrastructure is also considered as one of the problems faced by developing countries in building e-commerce solutions (Khalfan & Akbar, 2006).

1.2 Statement of the problem

Information systems implementation depends on specific social, cultural, economic, legal and political context, which may differ significantly between countries (Stiglitz, 1998). Thus, one can argue that findings from developed countries are not directly transferable to developing countries. Dewan and Kraemer (2000) showed that differences in country-contexts can lead to different ICT use and impact patterns.

According to (Shim, 2009), various online marketplaces or e-businesses are forming in Nigeria nowadays. Konga, OLX, Jumia, and Taxify are just a few of them. Uber transportation services, e-ticketing for events or flights, and university entrance e-payment systems are just a few examples. For payment transactions across devices, applications, and other payment methods, these local ebusiness or E-commerce platforms depend entirely on online or electronic payment systems. These facts are supported by the BOG's (2016) study, which reveals that the value and volume of electronic transactions (e-transactions) in Nigeria increased exponentially towards the conclusion of the period.  However there are a lot of factors affecting the adoption of e-commerce in Nigeria which are but not limited to high cost of shipping of goods, Cybercrimes, Safety Involved in Online Business, Lack of acceptance, Inability to examine the products physically, The problem of lack of awareness, The problem of low profit margin and  Problem as regards Content. Hence the need to look into factors influencing the adoption of e-commerce in Nigeria.

1.3 Objective of the study

The primary objective of the study is as follows

1.        To evaluate the importance of e-commerce to the Nigeria economy.

2.        To investigate the factors militating against the adoption of e-commerce in Nigeria.

3.        To find out strategy to use in improving on the challenges facing the adoption of e-commerce in Nigeria.

1.4 Research Questions

The following questions have been prepared for this study

1)        What is the importance of e-commerce to the Nigeria economy?

2)        What are the factors militating against the adoption of e-commerce in Nigeria?

3)        What are strategy to use in improving on the challenges facing the adoption of e-commerce in Nigeria?

1.5 Significance of the study

This study focuses on factors influencing the adoption of e-commerce in Nigeria. Hence the  study will be significant as it will help to establish the major social and economic conditions  that are positive or negative for e-commerce industry players to adopt or tab. It will also serve as  a repository for which knowledge regarding e-commerce and the extent to which it has been adopted or accepted in Nigeria.

The study will also be of benefit to the academic community as it will contribute to the existing literature

1.6 Scope of the study

This study will evaluate the importance of e-commerce to the Nigeria economy. The study will also investigate the factors militating against the adoption of e-commerce in Nigeria. Lastly, the study will find out strategy to use in improving on the challenges facing the adoption of e-commerce in Nigeria. Hence this study will be delimited to Konga online market.

1.7 Limitation of the study

This study was constrained by a number of factors which are as follows:

 just like any other research, ranging from unavailability of needed accurate materials on the topic under study, inability to get data

Financial constraint , was faced by  the researcher ,in getting relevant materials  and  in printing and collation of questionnaires

Time factor: time factor pose another constraint since having to shuttle between writing of the research and also engaging in other academic work making it uneasy for the researcher

1.8 Definition of terms

E-commerce: electronic commerce (ecommerce) refers to a business model that allows companies and individuals to buy and sell goods and services over the Internet