FINANCIAL TECHNOLOGY AND GROWTH OF E-COMMERCE IN NIGERIA (CASE STUDY OF JUMIA NIGERIA)

Abstract
The world has been shocked by the outbreak of the Covid-19 pandemic and no country is spared of the effects of the pandemic. The Internet has brought about the emergence of virtual markets with four primary distinct characteristics, which are real-time, shared, open and global. The growing rate of ICT utilization particularly the Internet has influenced at an exponential rate, online interaction and communication among the generality of the populace. The study examines the impact of ICT on E-commerce transactions in Nigeria. The study found out that virtually all organizations in Nigeria have online presence and Internet access. In fact, it is a status quo. Their goods and services are displayed online but no sales because of poorly embraced payment instrument and fear of scammers. Sales are still done the traditional way. Similarly, Internet access is fairly popular among the citizens, particularly for sending mails and sourcing for information. This is primarily due to the high number of cybercaf├ęs that offers Internet access to all and sundry for a fee. Therefore, it is recommended that government and private initiatives be encouraged to improve this sector of the economy. There is need for improved national image on the international arena and an appropriate legislation put in place to guide the operations of e-commerce.

CHAPTER ONE
INTRODUCTION
• Background of study
Firms across sectors are looking to leverage new opportunities during the pandemic through e-commerce. New evidence in the paper using World Bank’s (2020) ‘Impact of COVID survey’ data from 1182 firms across four African countries- Niger, Togo, Zambia, Zimbabwe- shows that 266 firms (22.50%) of the sample report adopting a digital response to the pandemic. Over 70% of the firms with digital response (in manufacturing, retail and other services) report having adjusted or converted production, compared to roughly 40% of firms with no digital response, and over 50% of firms with a digital response report having started or increased delivery of goods and services, compared to less than 25% of firms with no digital response. A significantly higher share of firms with a digital response in manufacturing and retail sectors report witnessing an increase in demand for their goods and services and a higher share export over 10% of sales directly compared to firms with no digital response to the pandemic. Interestingly, 6.77% of firms in retail sector and 4% of firms in other services sectors report an increase in monthly sales compared to a year ago, with 3.5% of retail firms also reporting a permanent increase in employees. But e-commerce revenues remain relatively small in Africa, with physical retailers in low and middle- income countries faring better than pure-play e-commerce retailers (or e-tailers), which sell goods and services online through an online channel with no physical stores.

However, there exist significant differences across regions in B2C e-commerce, with Africa lagging behind the rest of the world, particularly in terms of delivery infrastructure. Supply-side shocks to e- commerce during the pandemic are making things worse; shortages of delivery workers due to sickness, delays in parcels due to cargo, air and transport disruptions, increasing air freight prices due to cancellation of flights etc. On the demand side as well, there exists significant differences in online buying across income status, gender, age and education. On average, 24% of the world’s population is engaged in online buying, but only 2-4% of the population in low and lower middle-income countries is buying online. While 57% of females in high-income countries are engaged in online buying, it falls to 1% in low-income countries. Similarly, over 60% of the youth in high-income countries is buying online, but this falls down to 44% in upper-middle income countries, 7% in lower middle-income countries and 3% in low-income countries. E-commerce in Nigeria has numerous challenges and these challenges have impacted negatively to the rapid growth of the economy. One of the major problems that have hindered the growth of e-commerce is the low broadband penetration in Nigeria most especially in the rural areas and this is supposed to be a high priority growth for the ICT industry in the country.

It has been reported that 97% of Nigerian firms experience power outages, and such outages lasts on the average for some 196 hours per month. As a result of this situation, 86% of Nigerian firms have their own generators which produce over half of their electricity needs. (Larossi, Mousley & Radwan 2009). Therefore, firms will have to incur extra costs in the consumption of petrol or diesel. One huge challenge is the low consumer confidence in using electronic payment means because of lack of diverse internet security and forensic intelligence to contain cybercrime in the country. There is the problem of high cost of accessing the web. Most Nigerians access the web through there mobile phones, meanwhile most of the e-Commerce website are configured for PCs. A critical challenge to e-Commerce growth is the issue of poverty in the country. A greater percentage of the population live on less than $1 hence, they see shopping online as a thing for the rich. The coming of e-Commerce in the country has only received awareness in few big cities such as Lagos, Abuja, and Port-Harcourt. There is the challenge of timely delivery of goods bought online to the customers. Hence, this study is timely and will provide insight on Impact of Information Communication Technology (ICT) on E-Commerce Transactions in Nigeria.

The joint of Financial technology and E-commerce is becoming more of a reality. Both of them are dominant players in our technological world and they are going to reshape the traditional business and retail processes. The knowledge of this fast-moving world is a powerful advantage and the adaption of Financial technology in e-commerce can be characterized more than a revolution. It goes without saying that as the devices become more connected e-commerce will level up. Undoubtedly, there are numerous opportunities of this union and the possibilities for new e-commerce experiences will be endless. Initially, Financial technology can enhance e-business operations by tracking the customer‟s orders through RFID, balance the supply demand process and introduce new revenue streams by providing specialized e-services. In addition, the automation of smart devices can increase the customer satisfaction by the automated ordering of products that require consistent renewal. Moreover, connected products provide valuable data which can give useful insights for the customers‟ preferences and personalized information. In that way, retailers can influence customer decisions and customer‟s can receive customized experiences (Evans, 2017).

One of the biggest Financial technology innovations which is tightly connected to e-commerce is the Amazon Dash. At the touch of a button and with the help of wi-fi connection you can order specific products that need replenishment. The Financial technology technologies can also be used in order to boost the retail commerce. Smart shelves can be used in order to alert shop owners when the quantity of products runs out of stock and smart mirrors enhance the customer shopping experience by letting consumers virtually try on clothes. Finally, beacons and digital signage improve the retail process by sending targeted notifications on the mobiles phones and presenting targeted ads and prices to its customers when they visit their favourite store (Meola, 2016).

However things can go wrong with the Financial technology technology. Security is the major threat in such a technology and cyber criminals can exploit the vulnerable smart devices and have access to client‟s items. So, before an e-business decides to apply the Financial technology technology with the purpose of outstanding and attracting more customers, it must take a lot of things into consideration, in order to ensure the business and customers‟ safety.

• Problem of study
To determine the expected affection of Financial technology in business and e-commerce we followed a meticulous review of literature.

In order to complete our systematic literature review we identified two research questions. The research questions help us to determine the content of our literature, choose the right studies for our survey and create a frame which will aid in supporting our case study and our conclusions. The goal of this study is to discover how Financial technology could positively or negatively affect the retail businesses and by extension the retail e- commerce.

• Research questions
• How Financial technology could positively affect retail e- commerce?

• Which are the major challenges for businesses and consumers?

1.4 Research Objectives
1. to determine if Financial technology could positively affect retail businesses and retail e- commerce.

• To determine the major challenges for businesses and consumers.

1.5 Scope Of The Study
The main objective of this research is to introduce the relation between Financial technology and Electronic commerce and by extension with retail businesses. The overall objective is to analyze the role of Financial technology in the optimization of business and to explore how Financial technology can have a positive impact on e-retailing as well as the negative side effect of Financial technology. To achieve the aims of the study, a systematic literature review is followed. The final results of the research are presented in two matrix tables which analyze the opportunities and the challenges of Financial technology in e- commerce and businesses. The limitation of the study is that Financial technology is not analyzed from the technical point of view because of the lack of knowledge in this field. Moreover, out of scope are industries that are not affiliated to the retailing. Adequate in depth study was not possible due to time limitation. However, a future work, with an analysis of a case study regarding Jumia Company is going to be implemented in order to test the results of the literature review.

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Item Type: Project Material  |  Size: 45 pages  |  Chapters: 1-5
Format: MS Word  |  Delivery: Within 30Mins.
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