E-commerce: navigating challenges and embracing opportunities


By Addison GOLO

E-commerce, defined as the process of buying, selling, or exchanging products, services, and information via the internet, has become a critical aspect of modern business. Initially, e-commerce was characterized by the use of Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT) in the 1970s. The 1980s saw the rise of credit cards, ATMs, and telephone banking, while the internet boom in the late 1990s and early 2000s revolutionized how businesses and consumers engage in online transactions.

In Ghana, the e-commerce landscape has evolved significantly. However, the sector still faces challenges such as poor website design, limited browser compatibility, inadequate customer service, security concerns, and underdeveloped communications infrastructure. These issues hinder the widespread adoption of e-commerce despite its potential benefits.

A recent survey of 100 Ghanaians (58 males and 42 females) provides insight into current e-commerce trends and perceptions. The findings reveal a predominantly youthful demographic in e-commerce usage, with 78% of users aged 20-45 and only 18% over 45 years old. A notable correlation exists between banking tenure and e-commerce awareness: 72% of respondents had been banking customers for six to ten years, with most familiar with e-commerce. In contrast, only 10% of those with three years or less of banking experience were aware of e-commerce.

Banks and mass media are the primary sources of e-commerce awareness, followed by referrals from friends and shopping malls. Among those familiar with e-commerce, 82% used at least one bank or payment card, underscoring the link between card usage and e-commerce awareness. However, only 42% have used cards for online purchases, with 22% doing so regularly. Despite this, 78% of respondents who have not used cards for online purchases expressed a desire to do so in the future.

Popular online purchases include groceries, bill payments, airline tickets, and subscriptions. Respondents view online shopping positively, with 91% expressing approval and recognizing its benefits for the Ghanaian economy. They emphasize the need for government and financial institutions to promote e-commerce through supportive policies and infrastructure development.

Recent trends highlight the transformative impact of mobile money services on e-commerce in Ghana. Mobile money, characterized by accessibility, convenience, and security, has significantly enhanced the e-commerce landscape. It has bridged gaps in financial inclusion, allowing previously underserved populations to participate in the digital economy. The widespread adoption of mobile money services, driven by partnerships with e-commerce platforms, has streamlined payment processes and improved the overall shopping experience.

The integration of mobile money with e-commerce has led to increased usage and adoption. Promotional incentives and discounts offered by mobile money providers further incentivize users to embrace mobile payments for their online purchases. Additionally, emerging payment methods such as QR codes, contactless payments, and digital wallets are gaining traction, providing consumers with more options and enhancing the convenience of online transactions.

Despite these advancements, challenges remain. Security concerns, particularly related to fraud and data privacy, need to be addressed to build trust among users. Improving the quality of e-commerce websites and enhancing customer service options are also critical to fostering a positive online shopping experience. Moreover, investments in communications infrastructure are necessary to support the growing demand for reliable internet connectivity.

The potential for e-commerce in Ghana is vast. By addressing existing challenges and leveraging technological advancements, Ghana can position itself as a leader in the African e-commerce market. Collaborative efforts between the government, financial institutions, and private sector stakeholders are essential to create a conducive environment for e-commerce growth. This includes implementing supportive policies, investing in infrastructure, and promoting digital literacy among the population.

Looking ahead, the continued expansion of mobile money services and the adoption of emerging payment methods are expected to drive further growth in e-commerce. As technology evolves, mobile money will remain a cornerstone of the e-commerce ecosystem, driving innovation and inclusion in the digital age. By harnessing the potential of e-commerce, Ghana can achieve sustainable economic growth and participate more actively in the global digital economy.

The writer is Digital Payments & Fintech Consultant: Areas of interest: Using Predictive modelling for Bank Stress Testing, Payments Risk & Compliance, AI, NLP, LLM, Data Storytelling.

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