Thesis-Ibikunle Oluwaseun

E-Commerce in Developing Nations: Issues
and Challenges. Consumer Attitude In the

Nigerian Market.
Oluwaseun Ibikunle
Degree Thesis
International Business
Page 1 of 67 2013
DEGREE THESIS
Arcada
Programme: International Business
Identification number: 15448

Author: Ibikunle, Oluwaseun
Title:
E-Commerce In Developing Nations: Issues and Challeng-
es. Consumer Attitude in the Nigerian Market
Supervisor (Arcada): Srenius Andreas
Commissioned by:
Abstract:
This thesis is an explorative research that aims to explore further on earlier research on
issues and challenges of E-Commerce in developing nations, with a focus on consumer
attitude in the Nigerian market, which is one of the largest markets in Africa. This re-
search made use of quantitative written questionnaires that was administered to users of
different E-Commerce platforms in Lagos, Nigeria, results were analyzed using SPSS and
interpreted using Descriptive Analysis and Simple Relative Percentages, which clearly
shows major issues and challenges such as infrastructural, risk and security, education
and awareness, finance and cost, trust and confidence in the Nigerian online business ter-
rain. Several E-Commerce platforms that are available in the business environment were
identified and cross tabulations were made among different age groups and genders that
use these platforms. From the result of the research, it was clear that the issues and chal-
lenges notwithstanding, consumer attitude is on the positive side but issues of
trust/confidence in the system needs to be addressed as well as improvement in infra-
structure especially internet supply which is the platform on which E-Commerce stands,
also recommendations for further studies and also constant attitudinal checks must be
performed regularly as E-Commerce is an evolving trend, and as it evolves, consumer
attitude need to be evaluated to ensure its survival in developing counties.
Keywords:
E-Commerce, Developing Countries, Internet, ICT, E-
Commerce Platforms
Number of pages: 65
Language: English
Date of acceptance:
TABLE OF CONTENTS
Title Page
Thesis
Table of Contents
List of Tables
List of Figures
CHAPTER 1: GENERAL OVERVIEW………………………………………………..5
1.1 Definition of E-Commerce………………………………………………………...7

1.2 History of E-Commerce……………………………………………………….…..7
1.3 Classification of E-Commerce………………………………………………….....10
1.4 E-Commerce Platforms………………………………………………………...….13
1.5 An Overview of Developing Nations Peculiarities………………………………..15
CHAPTER 2: LITERATURE REVIEW…………………………………………….....17
CHAPTER 3: RESEARCH METHODOLOGY………………………………………..31

3.1 Sources and Collection of Data…………………………………………………….31
3.2 Research Design…………………………………………………………………....31
3.3 Sampling Techniques and Sample Size Determination……………………………32
3.4 Validity and Reliability of Study Instrument……………………………………...32
3.5 Administration of Data Collection Instrument…………………………………….33
3.6 Procedure for Processing Collected Data………………………………………….33
3.7 Limitation of Methodology………………………………………………………..33
CHAPTER 4: DATA ANALYSIS, FINDINGS AND DISCUSSION………………....34
4.1 Analysis of Data…………………………………………………………………...34

4.2 Interpretation of Data………………………………………………………………55
1
CHAPTER 5: RECOMMENDATIONS, SUMMARY AND CONCLUSIONS……..56
5.1 Recommendations…………………………………………………………………56
5.2 Summary of Thesis………………………………………………………………..59
5.3 Conclusion………………………………………………………………………...59
BIBLIOGRAPHY………………………………………………………………………..61
APPENDIX……………………………………………………………………………….63
2
LIST OF TABLES
Table 1: Price of sending 42 page document to Tokyo from New York………………20

Table 2. Demographic profile…………………………………………………………..34
Table 3: Which E-Commerce platform do you frequently use…………………………35
Table 4: Relationship between Age Group and the medium of E-Commerce platform
frequently used…………………………………………………………………..……..36
Table 5: Do you experience difficulty or obstacles when using the E-commerce plat-
forms……………………………………………………………………………………37
Table 6: Age Group * Do you experience difficulty or obstacles when using the E-
commerce platforms Cross tabulation………………………………………………….38
Table 7: Sex * Do you experience difficulty or obstacles when using the E-commerce
platforms Cross tabulation………………………………………………………..…….40
Table 8: Do you feel safe using bank/credit card information for online transaction
through E-Commerce platforms……………………………………………..…………41
Table 9: If No, Reason…………………………………………………………………42
Table 10: Has E-Commerce platforms been able to help improve your level of business
transaction………………………………………………………………………..........43
Table 11: How would you rate your confidence in internet facilities vis-à-vis E-
Commerce in Nigeria……………………………………………………………….….43
Table 12: Obstacles Faced in using E-Commerce platforms………………………….44
Table 13: Sex * Reasons for not feeling safe using bank/credit card information for
online transaction through E-Commerce platforms Cross tabula-
tion……………..……...................................................................................................45
Table 14: Age Group * Reasons for not feeling safe using bank/credit card information
for online transaction through E-Commerce platforms Cross tabulate.………………..46
Table 15: Age Group * Obstacles Faced in using E-Commerce platforms
Cross tabulation……………………………………………………………….………47
Table 16: Sex * Obstacles Faced in using E-Commerce platforms Cross tabula-
tion……………………………………………………………………………………..48
Table 17: Sex * How would you rate your confidence in internet facilities vis-à-vis E-
Commerce in Nigeria Cross tabulation………………………………………………..49
3
Table 18: Age Group * How would you rate your confidence in internet facilities vis-à-
vis E-Commerce in Nigeria Cross tabulation………………………………………….50
Table 19: Age Group * Has E-Commerce platforms been able to help improve your
level of business transaction Cross tabulation……………………………….………..52
Table 20: Sex * Has E-Commerce platforms been able to help improve your level of
business transactions Cross tabulation…………………………………………………54
List of Figures
Figure 1: Age Group of Respondents………………………………………………….34

Figure 2: To what extent do you trust the service of the E-Commerce platforms…….41
Figure 3: What benefits/difficulties have you derived/faced in using the E-Commerce
platforms……………………………………………………………….......................42
4
CHAPTER 1
A GENERAL OVERVIEW OF E-COMMERCE AND THE PECULI-

ARITIES OF DEVELOPING NATIONS
1.1 Definition of E-Commerce
There are many definitions for the concept of E-Commerce depending on the perspec-
tive of the viewer or commentator. Some authors define E-Commerce as being different
from E-Business; others see and define both concepts as same. When we look at it from
the perspective of differentiating both concepts, E-Commerce is keenly looked at from
the commercial aspect, in which there are values and also corresponding payments. This
can however be described as financial transactions which are mediated electronically
between organizations and stakeholders alike. E-Commerce however can be looked at
from a broader perspective which includes different forms of business dealings that may
not most often times involve forms of payments or from another perspective, beyond
what may be generally refer to as commerce in the real sense but rather all types of
transactions which are mediated electronically either commercial or otherwise between
an organization and its transactions with individuals and third parties alike that its vari-
ous dealings with them. This is however seen by some authors as defining E-Business
which makes E-Commerce an aspect of E-Business, while others see it as defining E-
Commerce which invariably makes it the same as E-Business which makes them use the
two concepts interchangeably. For the purpose of this study however, below are a few
definitions of E-Commerce as described by different authors.
• “Electronic commerce is the sharing of business information, maintaining busi-
ness relationships and conducting business transactions by means of telecommunication
networks”. (Vladimir Zwass, 1996).
• “Electronic Commerce deals with facilitation of transactions and selling of
products and services online either via the internet or any other telecommunications
network”. (Jelassi and Enders 2005).
• “The use of electronic communication or and digital information processing
technology in business transactions to create, transform and redefine relationships for
5
value creation between or among organizations and between organizations and individ-
uals”. (Emmanuel Lallana et al, 2000)
• In the World Trade Organization (WTO) Work Programme on Electronic Com-
merce (1998), E-Commerce is understood to “mean the production, distribution, mar-
keting, sale or delivery of goods and services by electronic means”. A commercial
transaction can be divided into three main stages: the advertising and searching stage,
the ordering and payment stage and the delivery stage.
• “The exchange of information across electronics networks at any stage in the
supply chain, whether within an organization, between businesses and consumers, or
between the public and private sector, whether paid or unpaid”. (UK Government Cabi-
net office, 1999).
Some authors however could not describe E-Commerce in one definition, as the opined
that E-Commerce can be viewed from different perspectives. According to Turban et al
(2008), E- Commerce can be defined from different perspectives which include but not
limited to:
From a communications perspective, E-Commerce is perceived as the delivery of in-
formation, products and services and/or payments over varied communication lines i.e.
telephones, computer networks, or other electronic channels.
From a business perspective, E-Commerce is perceived as the application of techno-
logical applications towards the automation of business transactions and flow of work.
From a service perspective, E-Commerce is perceived as a tool that caters for consum-
ers, management of firms to reduce service costs in an effort to improve quality of
goods and foster the speed of delivering services.
From an online perspective, E- Commerce makes possible an enabling atmosphere for
products transaction, services and information via the internet and other services that are
available online.
The definitions above however reflects the many different views and perspectives of E-
Commerce proposed by varied authors and commentators, are we want to believe they
all have a point depending on which perspective we view this from. However for the
purpose of this research work, E-Commerce will be looked at from a perspective that
involves transactions that maybe either commercial or non commercial and also if there
is either a corresponding payment or otherwise thereby making E-Commerce synony-
mous with E-Business. In the light of all the above, E-Commerce is all about fully inte-
6
grating the operations of an organization in such a way that all its various external activ-
ities and its internal business processes of research and development, sales and market-
ing, manufacturing, finance and accounts, inbound and outbound logistics, human re-
sources management using information and communication technology. (Jelassi &
Enders 2005).
1.2 History of E-Commerce
The first E-Commerce in history dates back to 1886, when a telegraph operator by name
Richard Sears who after obtaining a shipment of watches that was refused by the local
jeweler, used the telegraph to sell the watches to fellow operators and railroad employ-
ees. In a matter of months, he had saved up enough money to quit his job to start his
own business which later became Sears, Roebuck and co. (Sears, 1863-1914).
While the event described above could be described as the first of what can ever be re-
ferred to as E-Commerce in history, its purest form according to Vladimir Zwass (Edi-
tor-in Chief of International Journal of Electronic Commerce) in recent times can be
traced to 1948 electronic transmission of messages during the Berlin airlift. (FDU Mag-
azine, 2000).
The next stage of E-Commerce according to Turban et al (2008) was the development
of Electronic Data Interchange (EDI) which started in the 1960’s in form of cooperative
efforts at producing a common electronic data formats between industry groups. This
format were used only for purchasing, transportation and in intra-industry transactions
and it was not until the 1970’s that work started on national Electronic Data Interchange
(EDI) standards that eventually created a platform for Electronic Funds Transfer (EFT).
This was used by businesses to send commercial documents like purchase orders, in-
voices and also to facilitate online payment for business transactions as well as funds
transfer. This however was not without its own challenges at inception due to the fact
that there was no standardization and as such, two companies must have the same appli-
cation software or else, transactions cannot take place between them. Turban et al
(2008) also added that the EDI was very expensive and limited to very rich global cor-
porations who for their own benefit pressurized and at times incentivized small suppli-
ers to implement it at very high cost. This challenge of standardization was however
surmounted with the introduction of ASC X12 standard in 1984, as a standard which
7
became a reliable means of handling a large number of transactions and EDI became an
efficient system for the transfer of information between organizations and trading part-
ners though, the implementation cost for small businesses was still very high. It was the
advent of internet that actually lowered the barrier of E-Commerce for small businesses.
According to Turban et al (2008), one of the major events in the 90’s was the introduc-
tion of Asymmetrical Digital Subscriber Line (ADSL) services which helped to increase
internet access speed by up to 50 times more the initial level of 28.8 kilobits by a com-
pany known as SBC Communications, this happened in May 1998, and this was used to
serve more than 200 communities in the state of California. This led to increased inter-
net usage due to the higher bandwidth which invariably created an atmosphere for in-
creased commercial activities online. Due to these developments, PayPal launched pay
service; Google started its own version of E-commerce operations, while Yahoo opened
Yahoo store.
Turban et all (2008) also went further, In December 1998, Amazon and AOL took ad-
vantage of the massive online holiday shopping spree to generate sales in excess of $1
billion, which generated lots of waves and fear to offline firms who did not embrace the
massive opportunities on online transactions as this was and became a defining moment
in the history of E-Commerce.
As time moved on, the events of the 2000’s still as opined helped in shaping the history
of E-Commerce. Turban et al (2008) outlined further that in January 2000, AOL an
online juggernaut merged with Time Warner to create a purely E-Commerce platform,
which introduced various dimensions business transactions and exposed the potentials
of E-Commerce. However, in February of the same year, the hacking of E-Commerce
sites of major online companies like Amazon, Yahoo, and eBay in a series of well coor-
dinated assaults led to loss of confidence in doing business online because of the rise in
scrutiny issues in online transactions. In May however, things began to look up as there
year extension of moratorium on specific internet taxes, and in 2002, eBay acquired
PayPal, and also CSN stores started selling different products through several targeted
domain were additional dimension. In 2003, Apple launches iTunes store while the Can-
Spam act was passed into law by the American Congress. In 2004, PCI data card securi-
ty standard was created by the credit card company. In 2005, YouTube was launched
with a 2.0 version debut and also there was the release of Virtue Mart, which despite the
8
fact that it was an open source of E-Commerce solution, it provides performance, good
usability and security like any other professional software.
While most of the historic events and developments discussed above are major upsides
in the history of E-Commerce, this section will not be complete without also mentioning
the downsides. According to Turban et al (2008), major reference to dot.com burst era
of 2000 and 2001, when quite a few E-Commerce companies like WorldCom, Boo.com,
startups.com, open.com and the likes collapsed and totally disappeared from the online
business space. However the positives of the events were that it helped rephrase and re-
define the structure of online business for sustainability. The learning and outcomes of
the events has often been used as case studies in business schools on how not to run
online businesses.
However regardless of the events of the dot.com burst, as argues by Turban et al (2008),
the massive potentials inherent in E-Commerce was recognized by business analysts as
they made projections for growth in revenue and profits of E-Commerce for the future
as also companies who still practiced the traditional brick and mortar way of doing
business like Wal-Mart and the likes, were to begin to have more presence on the inter-
net while they also still operate their offline businesses, thereby giving birth to a mixed
strategy application which was a blend of online and offline stores in other to have a
market edge. Haven identified the many prospects serving a wide range of online global
consumers electronically on E-Commerce platform; the traditional offline companies
used the experience from factors that led to E-Commerce companies that were first
movers and as such, they were able to build well structured E-Commerce platforms that
made adjustments for the considerable risks and errors which led failure of earlier
dot.com firms. Additionally, the historical development of E-Commerce cannot be total-
ly complete without making proper reference to acceptance and growth, acceptance and
development of telephone banking in the 1980’s, data mining and data warehousing in
the 1990’s, credit cards, Automated Teller Machines(ATM), Enterprise Resource Plan-
ning(ERP), and also more recently, developments in Electronic Governance (eGovern-
ance), and also eLearning, all of which have come to be known and generally accepted
as part of E-Commerce.(Turban et al., 2008)
9
1.3 Classification of E-Commerce
According to Gebrezigabiher (2001), there are different forms of classifications that are
used to group E-Commerce operations depending on the parameters that is been used by
the author or commentator. Listed below are some of the classifications that are used:
 Classification by seller/buyer. (Government, consumer, business, etc.)
 Classification by product or activity. (Search engine, online commercial,
etc.)
 Classification by sources of revenue. (Advertising revenues, fees from refer-
rals, etc.)
 Classification according to tasks. (Shopping, Investment, Banking etc.)
 Classification with technology. (Internet infrastructure, internet Application
framework, etc.)
While the above are varied classifications and methods, the most widely used type is the
buyer/seller classification form. This is because of the description of the different par-
ties involved in the transaction which makes reference to person or party that has made
the order for the good or services to be sold, who is the seller of the goods and services
and the type of transaction that is been done. Based on this, the various classifications of
E-Commerce are described below as defined in classification of E-Commerce as out-
lined by Turban et al 2008.
 Consumer to Consumer (C2C): This is a type of E-Commerce transaction that is

directly between individuals that is void of any human intermediary; it uses a
platform that serves as an invincible intermediary. The platforms are often used
for sales and auctions of online expertise and also online advertisement of per-
sonal services. Examples of these sites includes eBay, MSN.com, and other so-
cial networking site like Facebook, Twitter, My Space etc fall into this category.
 Business to Consumer (B2C): This is a type of E-Commerce transaction that in-
volves businesses and consumers in which the businesses sells directly to the
consumer. The platform for this type of E-Commerce transactions could be for
transaction purposes or relationship and brand building, with the main purpose
10
changing consumer attitude by getting more patronage for the products and ser-
vices. Here the consumer is able to compare prices before making a buying deci-
sion and also the business can relate directly with the consumer without the use
of intermediaries. Sale of non-standardized products is also possible on this type
platform. Examples are compUSA.com, amazon.com, indiaballs.com among
others. Multinational companies like British Petroleum, Accenture are also in-
volved in B2C E-Commerce.
 Consumer to Business (C2B): This kind of E-Commerce transactions can also be
referred to as demand collections, Turban et al (2008), describes it to be an ave-
nue where individual sells products and services through the internet to other in-
dividuals and organizations. It allows for bidding in which names their price for
the good and services available. Involves a situation where the customer based
on his/her requirements makes an online post with a price or at least a set budg-
et, and businesses makes bids based on this, the customer in turn reviews the
bids and makes selections as appropriate.
 Business to Business (B2B): This according to Turban et al (2008) is the largest
form of E-Commerce transaction based on value as both the buyers and also the
sellers are business organizations with the exemption of individual consumers
from such transactions.
Gebrezigabiher (2001) stressed that the earlier forms of B2B was transacted us-
ing Electronic Data Interchange (EDI), which mainly involved manufacturers
and wholesalers. Gebrezigabiher (2001) went further by positing that B2B is of-
ten relational driven and most times it involves the transaction of commodities
and standardized products while pricing is mostly based on quantities ordered
which makes it negotiable which makes its activities transactional and also rela-
tionship building. This helps in direct consumer interaction, building customer
loyalty, savings in distribution as well as transaction cost.
 Business-to-Business-to-Customer (B2B2C): Jelassi and Enders (2005) describe
this type of E-Commerce transaction as where a business owner provides a
product or service it receives from another business to its customer without add-
ing any extra value on the product or service provided. In this type of transac-
tion, the client acts as an intermediary.
11
 Business to Employee (B2E): This is mostly used by for organizations that that
has quite a few mobile staff and/or also run a virtual office as information, goods
and services are passed on to the employees through this medium.
Turban at all (2008) describes the role of government transaction among many other
groups and sectors of the economy. Other forms of E-Commerce transactions the gov-
ernment engages into are analyzed below.
1. Government to Consumer (G2C): This can also be referred to as Government to

Citizen, and this transactions are government related payments such as taxes,
levies etc. and is also used in the dissemination of governmental information to
the citizens. Mostly used by the IRS and other revenue managing agencies on
behalf of the government.
2. Government to Business (G2B): In this type of E-Commerce transaction, desig-
nated government agencies relate with business owners and organizations in the
aspects of corporate taxes, levies, legal regulations etc.
3. Consumer to Government (C2G): This according to Gebrezigabiher (2001) may
also be referred to as Citizens to Government, which creates a platform for feed-
backs to the government on happenings and policies from individuals and pres-
sure groups alike, as it allows the citizens to be to make valuable inputs and con-
tribute their own quota to governance and also to make enquiries about govern-
mental services provided to the citizens.
Others transactions according to Turban et al., (2008), includes, Government to Em-

ployee (G2E), which is transactions between the government and its various employees;
Business to Government (B2G), which is basically transactions that exists when busi-
ness to give feedbacks to government agencies and departments in aspects of public
procurements and contract bids etc; and also Government to Government (G2G), which
helps to exchange information, and also intra and inter- government service issues.
Other classifications according to Turban et al (2008) also include:
a. Peer to Peer (P2P): This is a particular type of E-Commerce platform whereby

individuals share computer resources without the use of a web server, however
12
there is need to install software or download which will allow for electronic
sharing of video, music and other digital files.
b. M-Commerce: This is otherwise called Mobile Commerce, because this type of
E-Commerce transactions is done in a wireless environment through the use of a
mobile device which is internet enabled, it allows parties involved in the transac-
tions to be connected in a wireless business environment.
c. Intra-Business E-Commerce: This type of E-Commerce transactions includes all
the internal activities within an organization which involves exchange of goods
and services as well as information. It basically involves the use of the intranet
to deliver online training, cost reduction activities etc.
d. E-Learning: This basically is a platform where online educational trainings are
held by universities, business organizations as well as government agencies.
e. Exchange to Exchange: Here, buyers and sellers can connect and also link ex-
changes between them on the E-Commerce platform. E.g. the stock exchange.
f. Collaborative Commerce: This is a type of E-Commerce platform where indi-
viduals and groups meet online for the purpose of product designing or forecast
or other purposes.
According to Turban et al (2005), the E-commerce classification types above is per-

ceived to be more commonly used and widely accepted form, however other forms of
classifications are valid and can be appropriately used depending on classification pur-
pose that is being done.
Due to the fact that the angle to this research work bends towards the consumer attitude
to E-Commerce in developing nations, we will next take a look at some of the possible
E-Commerce platforms found in developing markets and also do a general overview of
E-Commerce in developing nations.
1.4 E-Commerce Platforms
E-Commerce basically operates on digital technology for its activities and transactions
which is totally based on electronic communication. (Turban et al 2008). According to
them, the technology used includes internet communications via websites, emails (intra-
net and extranet), digital media such as mobile or wireless media for the availability of
13
cable television and satellites, mobile phones/devices for mobile banking services and
also telemarketing, fixed telephone lines which are used for telephone banking. While
all these platforms are basically used for E-Commerce operations, it is important to state
the importance of the web as it is the base of all the E-Commerce platforms. This is due
to the fact that web has been a very useful tool in breaking through different nations and
transactions can be done at almost any time irrespective of the various time zones that
exist around the world. The importance of the web to E-Commerce cannot be over em-
phasized, and this is because it has become an unwritten rule for business organizations
that want to relevant by having a well and fully functional website where also E-
Commerce activities can take place. However most E-Commerce sites and platforms are
not entirely the same as they differ in capabilities, these capabilities are based on the
purpose which will inform its features and design.
The different types of E-Commerce site using its features and designs according to Tur-
ban at al 2008 are as follows:
 Transactional E-Commerce sites: These sites allow for product purchase on-
line while at the same time provide adequate information for those who pre-
fer to buy their products off-line. Examples are Retail on-line stores, On-line
banking services etc.
 Service-oriented relationship-building web sites: These sites typically do not
allow for product purchase on-line but rather, they provide information to
stimulate purchase and build relationships. The main purpose of these sites is
to generate leads and enquiries from customers while actual sales are con-
summated off-line. The sites also provide up to date information to existing
customers as a value added service. Service oriented organizations such as
Accounting and Audit firms, Tax consultants, Management consultants etc,
are examples of organizations that make use of these types of sites.
 Brand Building sites: These sites provide a platform to support the brand but
sales are done off-line. Their main focus is to support the brand by providing
an avenue to develop an on-line experience of the brand. These sites can be
used by all cadre of businesses, be it low-value, or high-volume and fast
moving consumer goods. Global corporations such as Unilever, Procter and
Gamble, are examples of organizations that operate such sites.
14
 Portal or Media Sites: These are sites that provide information and news
about range of topics and also serve as link or gateway to other sites. An ex-
ample of such site is Yahoo website, MSN website, etc.
The name given to different type of E-Commerce sites used above may differ a bit
from what some other authors may call them nevertheless, the basic description in terms
of features are basically the same.
While E-Commerce has changed the face of commerce globally allowing for market
penetration to where businesses were previously restricted as a result of artificial barri-
ers and costs, its advent has also thrown up some issues and challenges which differ
across the nations of the world. However, the issues and challenges of the developed
nations and that of the developing nations which are also referred at times as emerging
markets are very much different and because of the peculiarities of the nations under
each grouping, it has become necessary to look at the differences between developed
nations and developing nations as a foundation for this study.
1.6 An Overview of Developing Nations Peculiarities
The term developing nation does not really have a universal definition and various
terms such as emerging markets, less developed countries, underdeveloped nations,
non-industrialized nations and third world countries are being used interchangeably at
different times to refer to such group of nations. While nations within the group are not
homogenous, there are however a few factors that are peculiar to such nations on the
basis of which they are referred to as developing nations. Also within the group, there
are some form of sub groupings or classifications such as low and middle income coun-
tries, as well as newly industrialized countries and oil exporting countries. It should be
noted that more than 150 nations considered as developing nations with diverse culture,
religion, geography, economic activities and political structure, are in Asia, Latin Amer-
ica, Middle East and Africa. Also different world bodies such International Monetary
Fund (IMF), United Nations Organization (UNO), World Bank, World Trade Organiza-
tions (WTO), etc. have some parameters which are peculiar to them that are used to
classify the nations of the world. There are cases where the groupings are not exactly
the same and as such, a country classified somewhere as developed nation could be
classified as developing nation elsewhere.
15
While the above categorization might not be exhaustive, it to a large extent covers most
of the attributes of developing economies across the world. While it is a fact that some
developing economies are doing much better and are inching closer to the developed
world, some of the above factors been present in those economies still pose a great risk
not minding the fact that some of them have even overtaken some of the developed
economy in some of these economic indicators. The overall effect of these characteris-
tics is that in the developing economies, they are considered to be more risky in terms of
investment, cost of business is high, investible funds in form of capital are not easily
available, all of which make the economy not to be able to compete effectively with the
developed world and in turn make the environment more challenging for businesses
generally.
16
CHAPTER 2
LITERATURE REVIEW
The potential of E-Commerce is no more a matter of debate. From the world of hype
and fantasy it has moved into that of digital reality. Electronic commerce looms large on
the horizons of tomorrow, and it promises to transform trade and industry in ways not
yet imagined or perceived as its impact is expected to go far beyond commerce to affect
the lives of millions of Internet users, consumers, workers and producers. (Singh, 2000).
While E-Commerce involves the use of ATM’S, credit and debit cards, mobile phones
etc, the real game changer happens to be the internet. This so because, the Internet alone
has the potential to deliver what the notion of electronic commerce had always implied
due to the fact that for the first time in the history of trade and electronics, the internet
would be able to give direct unlimited access and control on buying and selling transac-
tions to just about everyone from the individual investor to the ordinary shopper. The
internet goes beyond the transaction itself to everything that comes, from marketing and
product display to order-tracking and sometimes even delivery. However, unlike the
commercial online services which reserve their services for their subscribers and select-
ed merchants, the Internet is open to everyone. (Singh, 2000).
Furthermore, in line with the definition of E-Commerce in this project which is taken to
be synonymous with E-Business making the two to be one and the same thing, one of
the benefits of E-Commerce which is also a key attraction is that it helps businesses in
enhancing its Production, Customer relationship management and Internal manage-
ment processes. This has made E-commerce become a necessary component of business
strategy as well as a strong catalyst for economic development in the emerging global
economy; of which developing nations of the world have become a critical mass be-
cause they have become the major drivers of the global GDP growth when compared to
the developed nations, whose markets have become matured thereby living little room
for growth opportunities, and also more importantly how consumers have responded to
the growth and development of E-Commerce in developing economies. This has been
facilitated by the integration of information and communications technology (ICT) in
business, which has revolutionized relationships within and between organizations on
17
one hand, and those between organizations and individuals on the other hand. Also, it
has helped in increasing productivity, encouraged greater participation from customers,
and also mass customization was enabled and cost reduction (Andam, 2003).
In other to have a greater understanding of the subject of this project work, this chapter
will be reviewing papers on related topics by different authors as it relates to consumer
attitude and behavior in a developing economy.
In a discussion paper titled Electronic Commerce: Some implications for firms and
workers in developing countries by Alwyn Didar Singh, a number of issues relating to
the subject of this project study were highlighted in preliminary results of research un-
dertaken by the International Institute for Labor Studies (IILS), an autonomous facility
of International Labor Organization (ILO).
According to Alwyn Didar Singh, the biggest issue and fear in developing nations and
their firms is not lack of knowledge and expertise in introducing and engaging E-
Commerce but rather that of not engaging it, as a result of not having a basic under-
standing and appreciation of its potentials, the framework of its operation and the multi-
plier effect on the economy in general as well as firms and workers in particular. The
objective of this paper according to Alwyn Didar Singh is actually an attempt to tackle
these issues.
Section one looks at E-Commerce today and its development status in the south or de-
veloping nations while Section Two raises the question of technology and standards in
the context of infrastructure requirements which is referred to as ‘info-structure’ in the
paper, the issue of legal and financial framework and also, the need to develop the nec-
essary human capacity for the promotion of E-Commerce. Section Three tries to assess
the impact of E-Commerce on businesses and firms in developing nations by highlight-
ing some potential benefits as well as challenges that governments and firms operating
in these nations should be aware of. In section Four, some policy issues for workers and
employment were outlined while the last section lists out possible future research and
policy agenda in this area for international agencies in general and ILO in particular.
In trying to lay a foundation on the subject of discussion, Alwyn Didar Singh mentioned
a number of electronic trading technologies like ATM, EDI etc., all of which are some
forms of E-Commerce and have changed their markets in some radical ways. However,
the real game changer according to him is the internet, which is a network of computers
across the globe interconnected over existing telecommunication networks. The advent
18
of the internet helped in removing the restrictions on the previous form of electronic
trading technologies which was only to their subscribers and selected merchants as
compared to the internet, which is accessible to everyone from the casual shopper to the
individual investor. Furthermore, it extends beyond the transaction to what happens be-
fore and after the transactions in areas like marketing and product display, order track-
ing and even delivery in some cases. Statistics from ITU as at the time of this paper by
Alwyn Didar Singh showed that there were 43 million internet hosts worldwide, 148
million internet users with double digit growth in many developing nations and an esti-
mate of business conducted on internet as at 1997 put at US$8-9 billion with a projec-
tion of US$400 by 2002 as a result of this communication revolution that will affect the
way trade and business will be conducted in the future.
Alwyn Didar Singh furthermore highlighted the under listed as areas where in his own
opinion, the impact might be greatest:
 Network growth will make distance irrelevant in communication costing

 Company’s location will be determined by access to the best bargains of skills
and best financial arrangements.
 Giant corporations and SME’s will be able to offer similar services at lower
costs.
 Middlemen and agents will probably be replaced by the ‘infomediaries’ on the
internet.
 Large manufacturers will also transform into service providers thereby blurring
the distinction between the goods and services sector.
 Digital tools and the Internet will be very crucial to business success.
 Access by the developing world will become easier as information grows but
with the attendant risk of dependence on the develop world.
 Labor mobility could decline, as E-Commerce will provide local opportunities
and networks in both developed and developing countries.
 English will emerge as the language of the Internet and E-Commerce.
While the assertion of Alwyn Didar Singh is true about the internet, he however did not
acknowledge the dimension of mobile technology which in recent years have also be-
come a major factor in E-Commerce particularly in many developing nations and Nige-
19
ria is a good example of this as a result of tremendous growth in the last ten years of
mobile telephone users, where many people who might not have access to the internet
have a mobile phone which might not necessarily be internet enabled but which are
been used for commercial transactions. It is also very important to note that while PC
penetration is still very low in developing nations compared to the developed nation,
mobile phone penetration is growing astronomically in developing nations and is be-
coming a very important component of E-Commerce in these nations. Also, while Eng-
lish is still a major language of the internet, many other languages are also available on
the internet now as a result of the increasing dominant of emerging economies of Africa
and Asia which has made this essential to make internet usage easier. In trying to estab-
lish the benefits of E-Commerce, the Alwyn Didar Singh was able to use simple eco-
nomics as illustrated below:
Table 1: Price of sending 42 page document to Tokyo from New York

COST (US$) TIME
Air Mail 7.4 5 days
Courier 26.25 24 Hours
Fax 28.83 31 Minutes
Internet E-Mail 0.095 2 Minutes
Source: Northern River Challenge cited in ITU Challenges to the Network 1997.
From the above illustration, it is clear that E-Commerce saves both time and costs. This
is further replicated in another example using cost of banking transactions, whereas at
branch level it was US$1.27, it however went down to US$0.27 at ATM and further re-
20
duced to US$0.01 when the transaction was done through the internet, all pointing to the
cost reduction that comes with E-Commerce.
While the author Alwyn Didar Singh was able to establish the fact that E-Commerce
can be a tool for cost reduction, he was quick to point out that this is just one of the ben-
efits of E-Commerce business growth strategy. In addition, it is also tool for increasing
sales and it leads to creation of new businesses such as call centers, maintenance and
software services, etc., for both existing businesses and new entrants. While all the
above are true in terms of the benefits of E-Commerce, the Alwyn Didar Singh however
failed to mention some of the attendant costs associated with setting up an E-Commerce
platform as well as maintaining the same, all of which might not have been reflected in
the costs highlighted in the above examples which could be very substantial. However,
when viewed in the light of substantial cost reduction as illustrated in the examples
above, the set up and operational costs will likely be written off by the savings which
will still make E-Commerce a tool for growth through cost reduction apart from sales
increase that comes with it.
Having established the benefits of E-Commerce and also traced the origin and growth of
E-Commerce over the years, He also looked at E-Commerce in developing countries
which are sometimes referred to as the South while the developed economy is referred
to as the North.
In the paper, Alwyn Didar Singh stated clearly that there already exists a large devel-
opment gap and differences between the North and South and this is sometimes referred
to as the digital divide. Developing countries therefore face a distinct challenge in order
to realize the promises inherent in this new technological development. The tasks ac-
cording to the paper are two folds:
 How to equip developing countries to benefit from and use the internet as a tool
for development.
 How to ensure and manage the growth and development of the internet as a pub-
lic good and utility that would also promote development.
The former is a developmental challenge and requires investments in the infrastructure
of telecommunications, in the Information Technology (IT) industry to ensure that com-
puters as well as software are made easily available at affordable prices, in training as
21
well as internet literacy. The latter however is more of an international challenge which
may involve the development and regulation of the internet facilities at a global level.
Moreover, the paper by Alwyn Didar Singh highlighted a few other facts that are very
critical to the issues of E-Commerce in developing nations, some of which are outlined
below:
 While the image of the internet as a mirror is presumed to be accurate, it is still

not a reflection of people as a whole. The fact that only an estimated 5-10% of
the content on the Internet is of non-Western origin while the developing world
population represents more than half of the world’s population indicates how far
the Internet is from true cultural and global diversity.
 E-Commerce today remains mostly a Western based activity, though connectivi-
ty has significantly improved in many parts of the developing world. For exam-
ple, nearly every capital city in Africa enjoys some level of internet access now-
adays. However, there are still significant differences in the level of internet
penetration across different regions of Africa, which can have great significance
for a country’s ability to participate in the global electronic market.
 Developing countries lag far behind developed country markets in the availabil-
ity of the technical pre-requisites for conducting electronic commerce. The gaps
in the two main requirements for internet which are telephone and computer
availability highlight this difference clearly. For example, 65 per cent of house-
holds in the world do not have telephones; on the other hand, 90 per cent of
households in countries with high income level have a telephone. The personal
computer ratio per 100 inhabitants is 18 for high-income countries, 2.3 for me-
dium-income and just 0.1 for low-income. While the situation today has im-
proved, the fact is that developing nations still lag behind the developed nations
in these areas.
Given the facts stated above which highlights some specifics about developing nations
and also confirm the likely dominant role E-Commerce will be playing in the unfolding
global economy coupled with the fact already highlighted that the global economy
growth will be driven by developing nations, it becomes necessary for any business or-
ganization that wants to be relevant to develop a business growth strategy for E-
Commerce taking into considerations issues that are peculiar to developing nations.
22
Also, Alwyn Didar Singh pointed out the role of government in E-Commerce develop-
ment in developing nations generally. It further highlighted the need for governments in
developing countries to address the issues that will help in the growth of E-Commerce
by distinguishing between IT policy and promotion on one hand and E-Commerce strat-
egies on the other hand. According to the paper, many state initiatives seem to blur and
confuse this issue in that, while the promotion of the Information Technology industry
fundamentally refers to developing both the hardware and software IT industry, it is im-
portant to note that E-Commerce is by no means limited to only that industry. E-
Commerce, besides IT and digital commerce, in fact encompasses all trade and com-
merce and therefore impacts the entire economy. This is important to bear in mind when
formulating plans for E-Commerce in developing countries. While the fact of the above
difference as pointed out by the author is true, it should be noted that a sound IT policy
and promotion is very crucial and foundational to success of any E-Commerce strategy.
This has been a challenge in many developing nations where until very recently many
government have not done much in this area particularly in countries where there is
great resistance from the labor who see IT as something that will increase unemploy-
ment and as such, they are not willing to embrace it and never understood the fact that
while IT could eliminate some Jobs, it invariably creates some new ones. The reality of
the fact is that the world has become digital and any country that does not embrace it
might lose out ultimately, has made a number of developing nations to embrace it be-
cause they have no option and this is a very important foundation without which E-
Commerce cannot thrive in developing nations of the world.
The issues that are very critical to E-Commerce in developing countries according to
Alwyn Didar Singh can be summarized as follows:
 Info-structure including technology and standards: The term info-structure deals

with right framework and environment conducive for the development of E-
Commerce as well as the capacity to deal with it.
 Legal and Financial Framework: The legal framework deals with the regulation
of E-Commerce as it relates to trading practices in many diverse communities
and practices that have long existed before the advent of E-Commerce. The fi-
nancial framework deals with the need to encourage the development of E-
23
Commerce by making banking procedures within developing countries to be
aligned and compatible with digital trade transactions, so that consumers and
buyers can easily make purchases locally through the Internet.
 Tariff and taxation: This is of importance for most developing countries because
domestic taxes, import and export duties are major revenue sources for the gov-
ernment. However, this could be very contentious when all aspects of the trans-
action have taken place in a digitalized format and there is no physical move-
ment of goods that will pass through recognized customs and domestic tax point.
 Building the human resource: E-Commerce has changed the way the developed
world do business and is also one of the proofs that they have moved from an
industrial based economy to an information based economy which knows no ge-
ographical boundaries. In this new environment, education and continuous learn-
ing is key and if developing nations are to benefit from the growth and boom
that E-Commerce represents, the most important component which is human re-
sources must be in place. There is therefore a need for policies and investment
for capacity development by developing nations so as to benefit from this devel-
opment.
All the above represent the main issues highlighted in the paper by Alwyn Didar Singh
as been critical to E-Commerce in developing nations.
While it is true that there are a lot of factors common to developing nations, the fact as
highlighted when discussing the peculiarities of developing nations in the introductory
chapter is that the nations under this group are not homogenous. While some are mov-
ing closer in terms of developmental indices to the developed nations and such nations
are classified as emerging markets examples of which are China, India, Brazil, etc.,
there are some that are classified as frontier markets such as Bulgaria, Croatia, Kazakh-
stan, Nigeria, Sri Lanka and Vietnam etc., while there are still others that are referred to
as least developed countries examples of which are Haiti, Swaziland, Niger, Sudan,
Chad, Liberia, Sierra Leone, etc. Statistics show that while a few African Countries are
classified as frontier Markets, most of them fall in the category of least developed coun-
tries (LDC).
With this background, it has become necessary to review consumer attititudes to E-
Commerce platforms, also taking into consideration the non-homogeneity of the devel-
oping nations by reviewing papers that reflected these peculiarities. It is in the light of
24
the above that a paper by Philip Esselaar and Jonathan Miller, Towards Electronic
Commerce in Africa: A Perspective from Three Country Studies which was published in
the Southern African Journal of Information and Communication, Vol 2. No 1, June
2001, is been reviewed.
The paper by Phillip Esselaar and Jonathan Miller is a study conducted to assess the ac-
tivity of E-Commerce in three African countries of Rwanda, Namibia and South Africa.
It also identified the key areas of E-Commerce, the interactions between the major par-
ticipants and also looked at the major obstacles characterizing developing countries
which are reflected in the fact that the presence of E-Commerce in Africa is minimal
except in South Africa. As a background to the subject of discussion in the paper, Phil-
lip Esselaar and Jonathan Miller the authors started by discussing the nature of E-
Commerce and three broad categories that were identified by them are as follows:
 Trade in physical goods which theoretically allow African countries to place or-
der for any good across the globe and pay for such over the internet. Further-
more it also allows African entrepreneur to market their products online and ac-
cess the larger global markets for their goods.
 Trade in Offline Teleservices and Virtual goods where physical presence on cli-
ents’ premises is not required. These are services like translating, capturing
medical records, etc., where African countries can take advantage of lower
wages to provide this services if electronic communication is effective and reli-
able. Also, virtual goods are downloadable electronic materials that are created
anywhere globally.
 Trade in Online Teleservices which are real time teleservices like call centers
which can be offered by African countries subject to good and affordable tele-
communication facility, reliable and affordable bandwidth. India, been a lower
income country is already taking advantage of this opportunity.
With this background which tried to highlight the opportunities for African countries in
E-Commerce, Phillip Esselaar and Jonathan Miller examined the reality about E-
Commerce in Africa and came to the conclusion that with the exception of South Afri-
ca, there is minimal evidence of E-Commerce in the continent. While it is a fact that E-
Commerce in Africa is still very low compared to the developed nations of Europe and
25
America, the reality as of today is that many African countries have been doing a lot to
improve on this; thus bridging the digital divide so that they will not be left out in the
digital commerce that is revolutionalizing the way business and trade is been conducted
on a global scale.
Furthermore, Phillip Esselaar and Jonathan Miller highlighted what it described as ob-
stacles to E-Commerce in Africa by making reference to the early days of E-Commerce
in developed nations when the challenges were supplier reliability, privacy of infor-
mation as a result of credit card fraud, slow telecommunication links. While these have
greatly diminished in developed nations with E-Commerce maturing, the developing
nations particularly the African countries are still battling with these challenges present-
ly and these are key impediments to E-Commerce business growth strategy in Africa.
Other issues and challenges in relation to E-Commerce in Africa that were identified by
Phillip Esselaar and Jonathan Miller in the paper are as follows:
 Policy Regimes: This relates to the monopoly provision of telecommunication

access in most cases by government owned organizations, weak regulation
which leads to high costs of services as well as limited business opportunities
value-added.
 Legal Framework: Most African countries are yet to legalize digital signatures
and contracts as well as intellectual property rights and consumer protection in
digital arena. Conflict resolutions in the whole B2C arena and protection and
preservation of intellectual property rights in the teleservices and “virtual
goods” marketplace are major areas of challenges of E-Commerce in Africa.
 Financial Environment: While credit cards are is very common in developed
world which is very core to E-Commerce, the same cannot be said about de-
veloping nations particularly, African countries where the economies are al-
most entirely cash based. In most of the African countries, credit cards are vir-
tually non-existent and central bank clearing facilities are very limited. These
issues pose a great challenge to the growth of E-Commerce in Africa.
 The Information Infrastructure: The level of infrastructure is very low in most
African countries and where they are available; the cost is high particularly in
26
monopolistic regimes in addition to limited bandwidth, which inhibits access
to high quality fast network.
 Transportation and Delivery System: This is a major issue and challenge to E
Commerce in African countries when compared to developed world where
transportation infrastructures are well developed. The essence of B2C ecom-
merce is immediate fulfillment. The placing of an immediate order and per-
haps the equally quick debiting of the consumer’s account has to be checked
with fittingly fast delivery of the goods which is considerable threat particular-
ly because of shortage in infrastructures among other factors.
 Human Capacity: The issue of low literacy level is prevalent in most African
countries. When this is coupled with computer literacy level with the under-
standing of relevant web languages, then it becomes a major challenge of E-
Commerce growth in most African countries.
While some of the issues are similar to the other developing nations, the authors Phillip
Esselaar and Jonathan Miller were able to highlight some that are more related to the
African countries particularly the area of transportation and delivery services as well as
the issue of cash based economy.
The position of Phillip Esselaar and Jonathan Miller in the paper is that the African en-
vironment in general is relatively hostile to E-Commerce. Also, they made reference to
several recent studies that examined the potential of ICT and in particular E-Commerce
to improve the living standards of African countries and have recommended actions.
However, when faced with a wealth of information on ICT within a given country and
complex interplays between many economic and social factors, Phillip Esselaar and
Jonathan Miller concluded that it may be difficult to arrive at a useful summary of the
overall situation and identify the useful ways forward.
While the position of their position may be understandable having conducted the study
ten years ago, the development over the years in the area of ICT in Africa and some of
the deliberate policy being put in place by governments to support E-Commerce might
not fully support some of the assertion Phillip Esselaar and Jonathan Miller, notwith-
standing the reality of some of the challenges already identified. The compelling need
not to be left out of the opportunities that E-Commerce provides so as to attract substan-
tial Foreign Direct Investment (FDI) which will be greatly enhanced in an environment
that support E-Commerce transactions has started changing the seemingly hostile envi-
27
ronment to E-Commerce in Africa. Also, the global fight against money laundering is
also a compelling reason for many African countries to make the environment to be
more receptive to E-Commerce.
The authors Phillip Esselaar and Jonathan Miller, in attempting to overcome the diffi-
culty in summarizing the overall situation and in identifying the useful ways forward
utilized a tool developed by the Center for International Development (CID) at Harvard
University called ‘Readiness for the Networked World – A Guide for Developing Coun-
tries’. This tool has been extensively applied in Africa and elsewhere; it can be applica-
ble to a number of other African countries in particular and developing nations in gen-
eral. This was used to access the Country’s readiness for a networked world which is
another way of looking at E-Readiness of a country. The following factors or indices
were used to ascertain the readiness or otherwise of the three nations that were covered
by the study.
 Network Access: What are the cost, quality and availability of ICT networks,
equipments and services?
 Networked Learning: Does the education system integrate ICTs into its process-
es to improve learning? Are there technical training programs in the community
that can train and prepare an ICT workforce?
 Networked Society: To what level do people that use technologies in infor-
mation and communication at work or at home? Do individuals with IT poten-
tials and skills have any significant opportunities?
 Networked Economy: How is information and communication technology been
used by the government as well as businesses in interacting within themselves
and also the public?
 Network Policy: To what level does the policy environment improve or impede
the development of ICT adoption and usage?
All the three countries were accessed using the above criteria and the study revealed that
Rwanda, Namibia and South Africa are at very different stages in preparedness for the
networked world. While E-Commerce in Rwanda, for instance is almost non-existent,
and its emergence will rely on heroic steps that will tackle the infrastructural challenges
required particularly in the rural areas of the country. Also, in both Rwanda and Namib-
28
ia, very small sections of the population are “ready” for ICT and this will only change
when special emphasis is placed on ICT-related training and education which can only
happen when there is a deliberate policy on the part of government to promote human
capacity development in ICT. While, the situation in Rwanda and Namibia may mirror a
large number of African Countries and also a large number of developing nations out-
side the emerging markets, South Africa’s case is very much different as it is well on
the road to becoming a networked society and to build on its progress in E-Commerce.
There is a need to emphasize the types of policy and “E-Law” interventions that is more
characteristic of developed economies. The South African situation may serve as a mir-
ror of what is likely to be the case of some of the more advanced developing nations
most of which are also classified as emerging markets.
The third paper to be reviewed is a paper titled Factors affecting E-Commerce adop-
tions in Nigerian Banks a paper within IT &Business Renewal for Jonkoping Interna-
tional Business School, Jonkoping University. The authors are Lavin Aghaunor and Xa-
veria Fotoh with June 2006 as the date of publication. The paper was chosen because it
gives a Nigerian perspective to the subject of this study unlike the other two papers ear-
lier reviewed that focused on developing nations and Africa and more importantly to
serve as a preface to the next phase of this research work as it is being narrowed down
to the Nigerian market as a sample location to have an idea of the consumer attitude to
E-Commerce in a developing market such as Nigeria is.
The reasons for this topic according to the authors Lavin Aghaunor and Xaveria Fotoh
are:
 Limited research on E-Commerce in developing countries particularly Africa
and
Nigeria with its large population presently estimated at about 150 million, is very lucra-
tive for E-Commerce.
 The banking sector in recent times has been the more successful sector in the
country with E-Commerce in Nigeria.
All these made it compelling for the authors to concentrate on the subject of the paper
that has been reviewed. The objectives of the study according to the authors are:
29
 To understand the E-Commerce adoption behavior of banks and the factors that
could drive or inhibit the wide adoption and use of E-Commerce in Nigerian
Banking Industry.
 To be able to rank the importance of these factors on the decision to accept and
use E-Commerce applications in by banks in Nigeria.
This paper on Factors affecting E-Commerce adoptions in Nigerian Banks looked at E-
Commerce adoption in Nigerian bank as an Innovation because E-Commerce has long
been in existence before its adoption by the banks. In looking at the subject of E-
Commerce adoption, the subject was dichotomized on the basis of whether a business
has or has not adopted E-Commerce. Furthermore a business is defined as having
adopted E-Commerce if it has achieved interactive E-Commerce status which is one of
the identified six phases in E-Commerce status indicator relevant to developing coun-
tries. The phases are: no E-Commerce connected E-Commerce, interactive E-
Commerce, transactive E-Commerce and integrated E-Commerce.
In subsequent, chapters we try to feel the pulse of consumers of different consumers
from different backgrounds on how effective E-Commerce has performed in the Nigeri-
an market overtime. This is paramount because for E-Commerce to survive in a devel-
oping economy such as Nigeria, consumer attitude needs to be constantly checked in
other to be able to access the responses to the ever changing and evolving world of E-
Commerce and ICT.
30
CHAPTER 3
RESEARCH METHODOLOGY
3.1 Sources and Collection of Data
In this study, a total of 200 questionnaires was designed, presented and administered to re-
spondents, and out of this 150 was returned representing 75% response rate. Even though our
target sample size was initially 200, we think 150 is also a reasonably big sample size consid-
ering the nature and peculiarity of the research design as the aim here is to get as much varied
views and responses as possible considering the explorative nature of the research work.
Direct personal interview was carried out to supplement the questionnaire method.
3.2 Research Design
Considering the peculiarity of this research work, the questions were carefully selected
and designed to feel the pulse of the consumer - the people who really use this services
and E-Commerce platforms. In other to avoid complexities and ensure thoroughness in
this research work, we decided to design the questionnaire and analyze data by:
Gender, which will allow us know which gender actually uses E-Commerce platform
more; Age group, which will give us which particular age group uses E-Commerce plat-
forms more frequently, why?, and the relationship that exists among these groups; and by
E-Commerce platforms, by grouping data this way, we were able to have a clearer view
of type of transactions were made and which platform was used to make these transac-
tions by which gender and age group as we were able to navigate easily through the data
and cross tabulate among different issues and challenges with regards to bene-
fits/difficulties, trust/safety, and also essentially how E-Commerce has been able to affect
the level of business transactions among the respondent in a developing market.
31
3.3 Sampling Techniques and Sample Size Determination
For the purpose of this study, data was analyzed using Statistical Package for Social Sciences
(SPSS) a
nd also Descriptive Analysis and Simple Relative Percentages were used to finding answers
to the research questions. The principle governing the sample size is to choose such sample
which would scientifically represent the larger population as we tried to get as much diverse
responses as possible.
The sample size of 200 was chosen as we tried to engage people from different parts of the
sample location. Our main target we people essentially using E-Commerce platforms at that
particular time. For instance, we noticed a small queue at some particular ATM, we quickly
administered a few questionnaires there just have an idea of what the people felt at that time
in the queue and the reason why there is the queue. Also we approached some people as they
were about to enter and also coming out of some banks and financial institutions in other to
feel their pulse of how the they feel about their transactions. The last major place we adminis-
tered questionnaires was a quite big and popular cyber café in the sample location, here we
could find lots of people making different transactions and shopping online. Others responses
came from random people in the location.
At the end we were able to round up a figure of 150 questionnaires which we feel is also a
good reflection of our sample location and not too far away from our initial target of 200.
3.4 Validity and Reliability of Study Instrument
Under this section, the state of reliability and validity of the questionnaire is put to test. To a
very large extent, validity and reliability in this research work is at a very high degree, this
is because, my partner and I were on ground at the sample location to personally administer
the questionnaires and analysis was done afterwards. Also, reliability in this research work
is very high, even though we will still recommend further studies and research, this is be-
cause, E-Commerce is an emerging trend and will always be improved upon as the world
advances technologically, so much so further research on this aspect will also need to be
updated as time passes.
32
3.5 Administration of Data Collection Instrument
The questionnaires were administered to users of varied E-Commerce platforms, in the

commercial nerve centre in the heart of Lagos called Broad Street.
The choice of Lagos is borne out of the fact that, according to the UN cyber school bus
2013, Lagos is the most populous city in Nigeria, second largest growing city in Africa,
and seventh largest growing city in the world. According to the Nigeria census 2006,
Lagos had an estimated 7.9 million which makes it one of the five largest cities in Africa.
Broad Street in many ways can be likened to Wall Street in New York, United States of
America. It is home to all the important commercial activities in Lagos. Commercial
monuments like Nigeria Stock Exchange, Central Bank of Nigeria, among others can be
found on it. Also, head offices and branches of major banks, finance houses, airlines
offices can be found on Broad Street. By this we belief this it is a perfect place to admin-
ister our questionnaires as it experiences a tremendous amount of human traffic on a daily
basis due to the commercial activities that is being transacted, hence as this would enable
us have a holistic view of the issues and challenges associated with E-Commerce using
Broad Street as a case study.
3.6 Procedure for Processing Collected Data
Questionnaires was prepared in paper forms and handed out as same, the questions had spaces
for respondents to fill up in other to answer the questions there in. We put all responses in
SPSS software and also used descriptive analysis and simple relative percentages to get an
accurate interpretation of the responses; this is because of the peculiar nature of the questions
asked.
3.7 Limitation of Methodology
Challenges experienced in the administration of the questionnaires were largely due to the
busy and rowdy nature of our sample location, it was very difficult to get people to fill out
our questionnaires, as people were busy transacting different businesses. Our aim was to
get a wide opinion of the consumers views in other to be able to get as much and varied
opinions as possible thus our choice of Broad Street, as it is a meeting point for people
from different walks of life and varied background.
33
CHAPTER 4
DATA ANALYSIS, FINDINGS AND DISCUSSION
4.1 Analysis of Data
Table 2. Demographic profile
Gender Frequency Percent

Male 81 54.0
Female 69 46.0
Total 150 100.0
Fig 1: Age Group of Respondents
Above 50 yrs
2%
40 - 50 yrs 18 - 30 yrs
24% 32%
30 - 40 yrs
42%
From Table 1, it could be observed that majority (54%) of the respondents were males while
females represented only 46%. Also, from fig. 1, 98.0% of the respondents were between the
ages of 18 to 50 years.
34
Table 3: Which E-Commerce platform do you frequently use?
Frequency Percent
Valid E-Banking Platforms 142 94.7
Transaction E-Commerce 3 2.0
Portal or Media Platforms 3 2.0
Others 2 1.3
Total 150 100.0
Almost all the respondents used E-Banking as the dominant E-commerce platform represent-
ing 94.7% of the respondents. This shows that E-banking platforms are the most popular form
of E-commerce amongst respondents in Nigeria.
35
Table 4: Relationship between Age Group and the medium of E-Commerce plat-
form frequently used
Which E-Commerce platform do you frequent-

ly use
Portal or
Age Group Total
Transaction Media
E-Banking E- Plat-
Platforms Commerce forms Others
18 - 30 yrs Count 47 1 0 0 48
% within Age Group 97.9% 2.1% .0% .0% 100.0%
% within Which E-
Commerce platform do 33.1% 33.3% .0% .0% 32.0%
you frequently use
% of Total 31.3% .7% .0% .0% 32.0%
30 - 40 yrs Count 59 2 2 0 63
% within Age Group 93.7% 3.2% 3.2% .0% 100.0%
% within Which E-
Commerce platform do 41.5% 66.7% 66.7% .0% 42.0%
you frequently use
% of Total 39.3% 1.3% 1.3% .0% 42.0%
40 - 50 yrs Count 35 0 1 0 36
% within Age Group 97.2% .0% 2.8% .0% 100.0%
% within Which E-
Commerce platform do 24.6% .0% 33.3% .0% 24.0%
you frequently use
% of Total 23.3% .0% .7% .0% 24.0%
Above 50 yrs Count 1 0 0 2 3
% within Age Group 33.3% .0% .0% 66.7% 100.0%
% within Which E-
Commerce platform do .7% .0% .0% 100.0% 2.0%
you frequently use
% of Total .7% .0% .0% 1.3% 2.0%
Total Count 142 3 3 2 150
% within Age Group 94.7% 2.0% 2.0% 1.3% 100.0%
% within Which E-
Commerce platform do 100.0% 100.0% 100.0% 100.0% 100.0%
you frequently use
% of Total 94.7% 2.0% 2.0% 1.3% 100.0%
36
We observe from the above table that there is a relationship between age group and the
medium of E-commerce used. The table shows that those who are between the ages of
30 and 40 years had the highest percentage of e-commerce usage, followed by those
who fall between the age group 18-30 years This could be because majority of the
working class group in the country falls within that age range and the computer literacy
level amongst them is high compared to those that were within the age range 40-50
years and above 50 years. Though they might fall between the working class, but the
computer literacy level amongst them is low.
Table 5: Do you experience difficulty or obstacles when using the E-commerce plat-
forms?
Frequency Percent
Valid Yes 63 42.0
No 87 58.0
Total 150 100.0
Findings from this table show that more than half of the respondents (58%) had not experi-
enced difficulty or obstacle when using the E-commerce platform while 42% of the respond-
ents claimed to have experienced difficulty.
37
Table 6: Age Group * Do you experience difficulty or obstacles when using the E-
commerce platforms Cross tabulation?
Do you experience diffi-

culty or obstacles when
Age Group using the E-commerce Total
platforms
Yes No
Count 15 33 48
% within Age Group 31.3% 68.8% 100.0%
18 - 30 yrs % within Do you experience difficulty or
obstacles when using the E-commerce 24.6% 37.9% 32.4%
platforms
% of Total 10.1% 22.3% 32.4%
Count 32 30 62
% within Age Group 51.6% 48.4% 100.0%
platforms
% of Total 21.6% 20.3% 41.9%
Count 14 21 35
% within Age Group 40.0% 60.0% 100.0%
platforms
% of Total 9.5% 14.2% 23.6%
Count 0 3 3
% within Age Group .0% 100.0% 100.0%
Above 50 % within Do you experience difficulty or
yrs obstacles when using the E-commerce .0% 3.4% 2.0%
platforms
% of Total .0% 2.0% 2.0%
Count 61 87 148
% within Age Group 41.2% 58.8% 100.0%
Total % within Do you experience difficulty or
platforms
% of Total 41.2% 58.8% 100.0%
38
From the table above, it can be observed that respondents who fall between the age group of
30-40 years are the ones who have experienced the most difficulty while using the e-
commerce platforms. This is expected based on the findings in table 3.
39
Table 7: Sex * Do you experience difficulty or obstacles when using the E-
commerce platforms Cross tabulation?
Do you experience diffi-

culty or obstacles when
Sex using the E-commerce Total
platforms
Yes No
Male Count 31 49 80
% within Sex 38.8% 61.3% 100.0%
% within Do you experience diffi-
culty or obstacles when using the E- 50.8% 56.3% 54.1%
commerce platforms
% of Total 20.9% 33.1% 54.1%
Female Count 30 38 68
% within Sex 44.1% 55.9% 100.0%
commerce platforms
% of Total 20.3% 25.7% 45.9%
Total Count 61 87 148
% within Sex 41.2% 58.8% 100.0%
commerce platforms
% of Total 41.2% 58.8% 100.0%
From this table, it could be observed that the gender of the respondents is not a determining
factor in whether they would experience difficulty or not while using the e-commerce plat-
forms.
40
Fig 2: To what extent do you trust the service of the E-Commerce Platforms?
Unacceptable
Excellent
3%
9%
Satisfactory
34%
Needs Improvement
54%
Findings from this table show that only a few of the respondents rated their trust in the ser-
vices of the E-commerce platform as excellent. Also, majority of the respondents rated their
trust in the services of the E-commerce platform as needing improvement. This is expected
because the internet facility in Nigeria is not so good.
Table 8: Do you feel safe using bank/credit card information for online transaction
through E-Commerce platforms?
Frequency Percent
Valid Yes 114 76.0
No 36 24.0
Total 150 100.0
From Table 7, it can be seen that majority (76%) of the respondents felt safe using their
bank/credit information for online transaction through E-commerce platforms while only 24%
of the respondents did not feel safe using their bank/credit card information for online trans-
action through the E-commerce platforms.
41
Table 9: If No, Reason
Frequency Percent
Debiting account without payment 5 13.9
Fraud 31 86.1
Total 36 100.0
Fraud was the major reason (86.1%) given by the respondents for not feeling safe when using
bank/credit card information for online transaction through-commerce. This is expected be-
cause the rate of internet fraud in Nigeria is very high while, only few (13.9%) of the re-
spondents experienced debiting of account without payment as their reason for not trusting
the E-commerce platforms.
Fig 3: What benefits/difficulties have you derived/faced in using the E-Commerce Plat-
forms?
Others
1%
Epileptic
10% Convenient
Rigorous 31%
20%
Ease
38%
From the graph above, the benefits derived in using the E-commerce platforms includes ease
and convenience while the biggest difficulty faced by the respondents in using the E-
commerce platforms is because of it rigorousness followed by epileptic supply.
42
Table 10: Has E-Commerce platforms been able to help improve your level of business
transaction
Frequency Percent
Valid Yes 74 49.3
No 26 17.3
Not sure 39 26.0
I don’t know 6 4.0
N/A 5 3.3
Total 150 100.0
Most (49.3%) of the respondents agreed that E-Commerce platforms had been able to help
improve their level of business transaction by making their transactions faster and convenient
and also providing ease of transaction.
Table 11: How would you rate your confidence in internet facilities vis-à-vis E-
Commerce in Nigeria?
Frequency Percent
Valid Excellent 7 4.7
Satisfactory 56 37.3
Needs Improvement 81 54.0
Unacceptable 5 3.3
N/A 1 .7
Total 150 100.0
It can be observed from the table above that most (54%) of the respondents rated their confi-
dence in internet facilities vis-à-vis is E-Commerce in Nigeria as needing improvement while
about 42% of the respondent rated their confidence as either excellent or satisfactory.
43
Table 12: Obstacles Faced in using E-Commerce platforms
Frequency Percent
Valid
Long queues 3 15.0
Network Problem 8 40.0
Posting wrong amount of money after
7 35.0
using ATM
Retaining ATM cards by the machine 2 10.0
Total 20 100.0
Network problem accounted for the biggest obstacle (40%) faced by the respondents in
using E-commerce platforms. This is as a result of the bad internet facility in the coun-
try. Another obstacle faced the respondents is Posting wrong amount of money after us-
ing ATM which accounted for 35% response rate followed by long queues and retaining
of their ATM cards by the machine which accounted for 15% and 10% response rate
respectively.
44
Table 13: Sex * Reasons for not feeling safe using bank/credit card information for
online transaction through E-Commerce platforms Cross tabulation
If No, Reason
Sex Total
wrongful
debiting
Fraud of account
Male Count 9 2 11
% within Sex 81.8% 18.2% 100.0%
% within If No, Reason 40.9% 66.7% 44.0%
% of Total 36.0% 8.0% 44.0%
Female Count 13 1 14
% within Sex 92.9% 7.1% 100.0%
% of Total 52.0% 4.0% 56.0%
Total Count 22 3 25
% within Sex 88.0% 12.0% 100.0%
% of Total 88.0% 12.0% 100.0%
As the table above shows, fraud was the major reason given by the respondents as the reason
for not feeling safe using their credit card information for online transaction, but from the
table above, it could be seen that more females were scared of being defrauded than males.
45
Table 14: Age Group * Reasons for not feeling safe using bank/credit card infor-
mation for online transaction through E-Commerce platforms Cross tabulation
If No, Reason
Total
wrongful
Age Group
debiting
Fraud of account
18 - 30 yrs Count 3 0 3
% within Age Group 100.0% .0% 100.0%
% within If No, Reason 13.6% .0% 12.0%
% of Total 12.0% .0% 12.0%
30 - 40 yrs Count 14 3 17
% within Age Group 82.4% 17.6% 100.0%
% of Total 56.0% 12.0% 68.0%
40 - 50 yrs Count 5 0 5
% within Age Group 100.0% .0% 100.0%
% within If No, Reason 22.7% .0% 20.0%
% of Total 20.0% .0% 20.0%
Total Count 22 3 25
% within Age Group 88.0% 12.0% 100.0%
% of Total 88.0% 12.0% 100.0%
From this table, it could be observed that there is a relationship between age group and rea-
sons for not feeling safe using bank/credit card information for online transaction. Those who
were between the age group of 30 – 40 years had the highest percentage of those that were
scared of being defrauded. This could be because they tend to use their credit cards more
frequently. Those who were between the age group of 18 – 30 years had the least frequency
of those who were scared of being defrauded. This is also expected because most of them do
not fall in the working class group in the country.
46
Table 15: Age Group * Obstacles Faced in using E-Commerce platforms
Cross tabulation
Obstacles Faced in using E-Commerce platforms

Posting
Age Group wrong Retaining
amount of ATM cards
Long Network money after by the ma-
queues Problem using ATM chine Total
18 - 30 yrs Count 0 3 0 0 3
100.0
% within Age Group .0% 100.0% .0% .0%
%
% within Obstacles
Faced in using E- .0% 37.5% .0% .0% 15.0%
Commerce platforms
% of Total .0% 15.0% .0% .0% 15.0%
30 - 40 yrs Count 1 3 2 2 8
100.0
% within Age Group 12.5% 37.5% 25.0% 25.0%
%
% within Obstacles
Faced in using E- 33.3% 37.5% 28.6% 100.0% 40.0%
Commerce platforms
% of Total 5.0% 15.0% 10.0% 10.0% 40.0%
40 - 50 yrs Count 2 2 5 0 9
100.0
% within Age Group 22.2% 22.2% 55.6% .0%
%
% within Obstacles
Faced in using E- 66.7% 25.0% 71.4% .0% 45.0%
Commerce platforms
% of Total 10.0% 10.0% 25.0% .0% 45.0%
100.0
% within Age Group 15.0% 40.0% 35.0% 10.0%
%
% within Obstacles
100.0
Faced in using E- 100.0% 100.0% 100.0% 100.0%
%
Commerce platforms
100.0
% of Total 15.0% 40.0% 35.0% 10.0%
%
From this table, we observe that network problem was the commonest obstacles faced in
using the E-Commerce platforms across the various age groups apart from those who were
47
between the age group of 40-50 years who felt Posting of wrong amount of money after using
ATM was the major obstacle they experienced.
Table 16: Sex * Obstacles Faced in using E-Commerce platforms Cross tabulation
Obstacles Faced in using E-Commerce platforms
Posting Retaining
wrong ATM
Sex Long Network
amount of cards by Total
queues Problem
money after the ma-
using ATM chine
Male Count 2 7 1 0 10
% within Sex 20.0% 70.0% 10.0% .0% 100.0%
% within Obstacles
Faced in using E- 66.7% 87.5% 14.3% .0% 50.0%
Commerce platforms
% of Total 10.0% 35.0% 5.0% .0% 50.0%
Female Count 1 1 6 2 10
% within Sex 10.0% 10.0% 60.0% 20.0% 100.0%
% within Obstacles
Faced in using E- 33.3% 12.5% 85.7% 100.0% 50.0.%
Commerce platforms
% of Total 5.0% 5.0% 30.0% 10.0% 50.0.%
% within Sex 15.0% 40.0% 35.0% 10.0% 100.0%
% within Obstacles
Faced in using E- 100.0% 100.0% 100.0% 100.0% 100.0%
Commerce platforms
% of Total 15.0% 40.0% 35.0% 10.0% 100.0%
Also, from this table, network problem was the major obstacles faced in using E-Commerce
platforms by the males while, the major obstacles faced by the females was posting wrong
amount of money after using ATM.
48
Table 17: Sex * How would you rate your confidence in internet facilities vis-à-vis
E-Commerce in Nigeria Cross tabulation?
How would you rate your confidence in internet facil-
ities vis-à-vis E-Commerce in Nigeria
Sex Needs Not
Satisfactory Improvement Acceptable Total

Male Count 34 44 3 81
% within Sex 42.0% 54.3% 3.7% 100.0%
% within How would you
rate your confidence in
53.6% 54.3% 60.0% 54.4%
internet facilities vis-à-vis
E-Commerce in Nigeria
% of Total 22.8% 29.5% 2.0% 54.4%
Female Count 29 37 2 68
% within Sex 42.6% 54.4% 2.9% 100.0%
46.4% 45.7% 40.0% 45.6%
% of Total 19.5% 24.8% 1.3% 45.6%
Total Count 63 81 5 149
% within Sex 42.3% 54.4% 3.4% 100.0%
100.0% 100.0% 100.0% 100.0%
% of Total 42.3% 54.4% 3.4% 100.0%
In rating their confidence in the internet facilities vis-à-vis E-Commerce in Nigeria, both
gender felt it needs improvement. This is not surprising, because generally, the internet facili-
ty in Nigeria is poor and it is a major cause of concern.
49
Table 18: Age Group * How would you rate your confidence in internet facilities vis-à-
vis E-Commerce in Nigeria Cross tabulation
How would you rate your confidence in internet facili-
ties vis-à-vis E-Commerce in Nigeria
Age Group
Excellent/ Needs Not
Satisfactory Improvement Acceptable Total
18 - 30 yrs Count 23 24 1 48
% within Age Group 41.7% 50.0% 2.1% 100.0%
% within rating of confidence
in internet facilities vis-à-vis 35.7% 29.6% 20.0% 32.0%
% of Total 13.3% 16.0% .7% 32.0%
30 - 40 yrs Count 24 35 3 63
% within Age Group 33.3% 55.6% 4.8% 100.0%
% of Total 14.0% 23.3% 2.0% 42.0%
40 - 50 yrs Count 16 19 1 36
% within Age Group 41.7% 52.8% 2.8% 100.0%
% of Total 10.0% 12.7% .7% 24.0%
Above 50
Count 0 3 0 3
yrs
% within Age Group .0% 100.0% .0% 100.0%
in internet facilities vis-à-vis .0% 3.7% .0% 2.0%
% of Total .0% 2.0% .0% 2.0%
% within Age Group 37.3% 54.0% 3.3% 100.0%
% of Total 37.3% 54.0% 3.3% 100.0%
50
Also, within the various age groups too, it could be observed that they all are of the opinion
that internet facilities vis-à-vis E-Commerce in Nigeria needs improvement. Though, some
felt it was satisfactory/excellent, but the general consensus was that it needs improvement.
51
Table 19: Age Group * Has E-Commerce platforms been able to help improve
your level of business transaction Cross tabulation
Has E-Commerce platforms been able to help im-
prove your level of business transaction
Age Group
Yes No Not sure Total
18 - 30 yrs Count 20 8 20 48
% within Age Group 41.7% 16.7% 41.7% 100.0%
% within Has E-Commerce
platforms improved your business 27.0% 30.8% 41.0% 32.0%
transaction
% of Total 13.3% 5.3% 13.3% 32.0%
30 - 40 yrs Count 29 11 23 63
% within Age Group 46.0% 17.5% 36.5% 100.0%
transaction
% of Total 19.3% 7.3% 15.3% 42.0%
40 - 50 yrs Count 25 7 4 36
% within Age Group 69.4% 19.4% 11.1% 100.0%
transaction
% of Total 16.7% 4.7% 2.7% 24.0%
Above 50 yrs Count 0 0 3 3

% within Age Group .0% .0% 100.0% 100.0%
platforms improved your business .0% .0% 2.6% 2.0%
transaction
% of Total .0% .0% 2.0% 2.0%

% within Age Group 49.3% 17.3% 33.3% 100.0%
transaction
% of Total 49.3% 17.3% 33.3% 100.0%
52
The general agreement amongst the various age groups was that the E-Commerce platforms
had been able to help improve their level of business transaction. With the introduction of E-
commerce, transactions could take place online, hence, improving their level of transaction.
53
Table 20: Sex * Has E-Commerce platforms been able to help improve your level
of business transactions Cross tabulation
Has E-Commerce platforms been able to
Sex help improve your level of business transaction
Yes No Not sure Total
Male Count 39 13 29 81
% within Sex 48.1% 16.0% 35.8% 100.0%
% within Has E-
Commerce
platforms improved 52.7% 50.0% 59.0% 54.0%
your business
transaction
% of Total 26.0% 8.7% 19.3% 54.0%
Female Count 35 13 21 69
% within Sex 50.7% 18.8% 30.4% 100.0%
% within Has E-
Commerce
your business
transaction
% of Total 23.3% 8.7% 14.0% 46.0%

% within Sex 49.3% 17.3% 33.3% 100.0%
% within Has E-
Commerce
your business
transaction
% of Total 49.3% 17.3% 33.3% 100.0%
From this table also, it could be noted that both gender felt the E-Commerce platforms had
been able to help improve their level of business transaction.
54
4.2 Interpretation of Data
From the analysis above, it could be observed that among the available E-Commerce plat-
forms, E-Banking is the most frequently used in Nigeria. Other E-commerce platforms such
as transaction e-commerce, portal or media platforms are not very popular in the country.
The acceptability of the E-banking platform amongst respondents stems from the fact that it
had been able to improve their business transaction by making it faster and convenient and
also providing ease of transaction. Gone were the days when customers would queue up for
several hours at the bank to make transaction. With the introduction of E-commerce, transac-
tions could take place online, hence, improving their level of transaction.
Also, it could be observed from the responses of the respondents that the service of the E-
Commerce platforms in Nigeria needs improvement, this is because majority of them felt they
were not getting quality services as a result of bad network and inter-connectivity issues, long
queue at the Automated Teller Machine (ATM) machines, debiting of their account by the
ATM machine without dispensing money.
And finally, though, doing transactions online via the E-commerce platforms is relatively new
in Nigeria, most of the respondents felt safe with using their bank/credit information for
online transaction. However, the level of internet fraud in the country is a cause for concern
because fraud was the major reason why some of the respondents did not feel safe with using
their credit cards for online transactions.
It could be established that E-commerce has been generally accepted by majority of the re-
spondents in Nigeria.
55
CHAPTER 5
RECOMMENDATIONS, SUMMARY AND CONCLUSIONS
5.1 Recommendations
Consumer attitude to E-Commerce goes a long way in determining its survival and sus-
tainability in developing markets and economy at large. According to Andrew Groves in
his book “High Output Management” written in 1983, he posited that “In the future, all
companies will be internet companies”. In this framework, E-Commerce symbolizes the
future and the future is here now, as business have moved from the traditional brick and
mortar era to primarily business over the internet , this is of course apart from digital
platforms and tools that are used for E-Commerce transactions discussed in the earlier
chapters of this research work. If the future mentioned by Andrew Groves many years
ago is already here, then the usage of E-Commerce and the attitude of consumers to-
wards E-Commerce is a vital aspect of a developing economy that pursue relevance
among other economies around the world.
The absolute fact that of the issues and challenges associated with E-Commerce in de-
veloping countries is a great reality; this is mainly because of the environment, these
challenges however should not be a reason to jettison this game changing platform but
rather business and firms should devise appropriate strategies that will help in overcom-
ing these challenges which will in turn make consumers more open to using these plat-
forms to transact business. In the light of the above, we would want to make the follow-
ing recommendations.
1. A lot of attention should be paid to infrastructural issues that will culminate in

its rapid development as that is the very foundation of E-Commerce. The issue
of epileptic internet coverage, bandwidth and appropriate technology that can
help overcome the limitations of the local environment should be given a lot of
priority. This can be done by linking up with the developed world where possi-
ble to have a back up for the limitations that are associated with the locally
available infrastructure and where possible, it can be used as a substitute when
what is available locally is grossly inadequate.
56
2. While the issue of infrastructural challenge in most developing nations is a reali-
ty though there have been some improvements over the years, the fact is that
some infrastructure required for E-Commerce have developed more than others
in developing nations. Recent statistics according to Internet World Stat 2013,
internet penetration as at 2012 was 28.4%, and also according to the Nigerian
Communications Commission 2013 communiqué, mobile phone penetration is
estimated at 50% at the end of 2015, these figures are massive considering the
total population of Nigeria. It is therefore recommended that E-Commerce strat-
egy should be crafted around mobile platforms in order to achieve a good mile-
age in the interim and a substantial level of market penetration in developing na-
tions.
The success story of mobile money in the east African country of Kenya (Busi-
ness Day Report 2012), and its recent introduction in Nigeria as well as increas-
ing awareness of increasing awareness of mobile advertising in Nigeria are all
pointers to the fact that more can be achieved by using mobile phones platforms
in developing nations.
3. Literacy level in most developing nations is still very low and this is the first
level that is a pre-requisite to computer literacy which is also very core to effec-
tiveness of E-Commerce and has adverse effect on consumer attitude in any so-
ciety. However, this can be overcome by ensuring that most of the processes are
not complicated so as to serve as incentives for switching from cash based trans-
actions to electronics based transactions. The fact is that there are many literate
people in the developing nation that are not computer literate and simplification
of transactions process will encourage them to try E-Commerce. This is con-
firmed by the analysis of data in the previous chapter that shows that the young-
er generation are more disposed to E-Commerce than the older generation.
4. Understanding the socio-cultural dimension of the challenges is very important
to changing consumer attitude to E-Commerce in developing nations. The fact is
that, most of the transactions are still largely cash based and switching to elec-
tronics based transactions will require a change which can only be achieved
through enlightenment and incentives that will encourage a cultural, mental and
attitudinal change. The attendant cost associated with this will be offset by the
cost savings that will be made when there is a substantial shift from cash based
57
transactions to electronic based ones.
5. Investment in trainings and other enlightenment programs is a very vital to atti-
tudinal changes of consumers to E-Commerce transactions in developing mar-
kets. While it is a known fact that such trainings might not be readily available
in developing nations, they are however available in developed nations. Coun-
tries like Sweden, Finland and the United States who have facilities for trainings
and development especially when it comes to E-Commerce can be partnered
with by bringing their expertise to the developing markets.
6. Adequate attention should be paid to risks and security, which is a major issue
why consumers shy away from using E-Commerce in general. In as much as ex-
perts belief that E-Commerce may not be totally void of fraud as it is still possi-
ble even in developed economies, more secured platforms are being introduced
on a daily basis and this should extend to developing markets coupled with a
good risk management system. This is where the government should play an ac-
tive role.
7. The challenge of cost development and finance which makes E-Commerce not
to be cost effective to end users should be improved on. Collaborations between
organizations through infrastructural sharing, joint negotiation is vital to cut
down on deploring cost which will in turn reduce cost on the consumer end. A
joint negotiation by Nigerian banks with manufacturers of POS terminals result-
ed in 30% discount which was a substantial cost reduction strategy, this re-
sulted in lowering the financial barrier in the deployment of POS terminals for
E-payment systems and this has also drastically reduced the end user cost. More
of this kind of strategies is needed to sustain end user.
Conclusively, we have seen that the global economy is becoming digital with most
transactions nowadays partially or completely digital, both in developing and developed
markets and economies at large. The few recommendations above can go a long way in
helping to improve consumer attitude in developing markets despite the issues and chal-
lenges that abound.
58
5.2 Summary of Thesis
The introductory chapter of this thesis looked at the overview of E-Commerce in devel-
oping nations focusing on the different definitions of E-Commerce by various authors,
historical background, types as well as different E-Commerce platforms so as to have a
clear understanding of what E-Commerce is about. Also the issues and peculiarities of
developing nations was also extensively discussed in other to have insights as to the
system differs from the developed nation.
With this as a background, the next chapter reviewed some papers by different authors
that are related to the project topic. These papers were carefully selected to capture a
general perspective of developing nations, the Africa perspective because of the unique-
ness of African environment among developing nations and also, the Nigerian market
perspective. Though there were a few variances from the reviews; nevertheless, there
was a high level of consistency in the conclusion of the authors in relation to issues and
challenges of E-Commerce in developing nations.
Subsequent chapters focused on the Nigerian market and how consumers who are the
user end of the divide has been able to react to the use of E-Commerce products using
the different platforms available in the Nigerian market. We tried to analyze how well
and otherwise respondents of different genders and age groups have reacted to using
different E-Commerce platforms. This included the research methodology which de-
tailed exactly what and how we made our findings in addition to the analysis of findings
from research questionnaires used in our evaluation.
The last chapter made a number of recommendations on how to mitigate the challenges
associated with consumer attitude regarding E-Commerce in developing economies as
this might help foreign business that intend to take advantage of the vast and enormous
market available in developing countries set up online businesses there.
5.3 Conclusion
E-Commerce dominance has been on the increase and the growth worldwide has been
phenomenon. While may be impossible to completely eliminate brick and mortar busi-
ness, the reality is that E-Commerce is the future of commerce globally and developing
nations been part of a world that has been reduced to a global village have no option
59
than to flow in the direction of the tide or they will be left behind. It is also imperative
the consumers who are the end users of the E-Commerce products are continually en-
couraged so as to ensure attitudinal changes so that they can become more disposed to
using these products and platforms.
The developing nations are not immune from the fact that E-commerce rightly rides on
a technology that causes boundaries of nations to collapse, a platform that has made dis-
tance no much of an issue in trade and commerce. It is high time that the developing
nations embraced this phenomenon holistically.
While issues and challenges of E-Commerce in developing nations are factual, consum-
er attitude to E-Commerce is changing, as we have seen in the data analysis chapter of
the rise in the usage of different platforms by consumers in developing markets. The
developing nations are becoming more dominant in the global economy as they are the
terrain where growth opportunities for businesses now exist if this is juxtaposed with
the realization that E-Commerce represents the future of commerce worldwide, it can
therefore be concluded that for developing economies to keep developing, consumer
attitude to frequently be checked by regularly feeling the pulse of the consumers that
uses there E-Commerce products and platforms as it wouldn’t make too much sense to
invest so much into making these products and platforms available and consumer atti-
tude as not moved away from the brick and mortar ways.
60
BIBLIOGRAPHY
Aghaunor L. & Fotoh X. (2006) ‘Factors affecting the adoption of E-Commerce in

Nigerian Banks’. Jonkoping International Business School, Jonkoping Uni-
versity. June, 2006.
Esselaar P. & Miller J. PhD. (2001), ‘Towards Electronic Commerce in Africa: A

Perspective from Three Country Studies’ .Miller Esselaar & Associates.
Fruhling, A.L. & Digman, L.A (2000) ‘The Impact of Electronic Commerce on
Business Level Strategies. Journal of Electronic Commerce’ Research, VOL
1, NO 1.
Gebrezigabiher A. (2001) ‘Classification of E-Commerce’. [Online]. Available at:

www.authorstream.com/Presentation/gerieadiet-297943-classification-
commerce-ais-education-ppt-powerpoint. (Accessed 31 March 2011).
Horst S. The World Economy. [Online]. Available at:

http://books.google.com.ng/books. (Accessed on 31 March 2013).
Howard M. (2008). ‘Six Global Trends Shaping the Business World. Emerging
Markets Increase their Global Power’. [Online] Available at:
http://www.ey.com/GL/en/Issues/Business-environment/Six-global-trends-
shaping-the-business-world---Emerging-markets-increase-their-global-
power.(Accessed 30 March 2013).
Olatidoye, O. (2004). Cyber-Security and E-Commerce. [Online]. Available at:

http://www.edc.org/GLG/gkd/2004/Sep/0750.html (Accessed 4 March 2013)
Poon, S. & Swatman, P.M.C. (1998) ‘A combined method study of small business
Internet commerce’. Intl. J. Electronic Comm., 2: 31-42.
Rainer R.K., Cegielski C.G., Introduction to Information Systems: Enabling and

Transforming Business. [Online]. Available at: Google books.
http://books.google.com.ng/books. (Accessed 1 April 2013).
Singh S. (2005) ‘Electronic Commerce Technologies Management- ELECTRONIC

COMMERCE, Types of EC, Classification According to Participations,
Classification According to Tasks, E-Shopping’. [Online]. Available at:
http://encyclopedia.jrank.org/articles/pages/6600/Electronic-Commerce-
Technologies-Management.html (Accessed 1 April, 2013).
Singh, A.D. (2000) Electronic Commerce: ‘Some implications for firms and workers
in developing countries’. International Labor Organization. (International In-
stitute for Labor Studies). [Online]. Available at
http://www.ilo.org/public/english/bureau/inst/publications/discussion/dp123
00.pdf (Accessed 6 March 2013).
61
The Internet Coaching Library, (2013) Internet World Stats, Usage and Population
Statistics [Online]. Available at:
http://www.internetworldstats.com/africa.htm. (Accessed 30 October 2013)
Turban, E., King, D., Mckay, J., Marshall, P., Lee, J., Viehland, D., (2008), Elec-
tronic Commerce: A managerial Perspective. New Jersey: Prentice Hall.
Turban, E., Lee, J., King, D., & Chung, H.M. (2000). Electronic commerce: A man-
agerial perspective. New Jersey: Prentice Hall.
UNCTAD (2001) E-commerce and Development Report.
Vadapalli A. & Ramamurthy K., (1998) ‘Business use of the internet: An analytical
framework and explanatory study of International Electronics Commerce’,
2: 71-94.
Weisman J. (2000) ‘The making of E-Commerce: 10 Key Moment Part II’. [Online].
Available at: http://www.ecommercetimes.com/story/4097.html (Accessed
30 March 2013).
Weisman J. (2000) ‘The making of E-Commerce’: 10 Key Moments. [Online].

Available at: www.ecommercetimes.com/story/4085.html. (Accessed 30
March 2013).
Woherem E. (2000), ‘Information Technology in the Nigerian Banking Industry’

Spectrum Books Ltd.
Zorayda R.A., (2003) ‘Common Characteristics of the Developing Countries’.

[Online]. Available at: www.economypoint.org/developing-country/p2.htm.
(Accessed 31 March 2013).
Zwass V. (1996) Electronic Commerce: Structures and Issues. International Journal

of Electronic Commerce Volume 1, Number 1, fall, 1996, pp. 3 - 23.
Zwass V. (2000) ‘The E-merging E- Commerce Culture’. [Online]. Available at:

www.fdu.edu/newspubs/magazine/00fw/e-com.html. (Accessed 30 March
2013).
62
APPENDIX
Bio Data
Sex: (a) Male (b) Female

Age bracket: (a) 18-30yrs (b) 30-40yrs (c) 40-50yrs (d) Above 50yrs.
Research Questions
1. Which E-Commerce platform do you frequently use?
E-Banking Platforms- Online Banking services, Cards/ATM services, Funds

Transfer
Transaction E-Commerce- Online Retail Stores services
Portal or Media Platforms- Yahoo business, MSN
Brand Building Platforms
Service Oriented Platforms
Others- Please specify
2. How often do you use this E-Commerce Platform?
Frequently Once Week More than once a week

Sometimes Once a month Less than once a month
Seldom Occasionally When I don’t have a choice
Never Busy Don’t trust the services
Others Please specify …………………………..
3. Do you experience difficulties or obstacles when using the E-Commerce Plat-

forms?
Yes No
If Yes, Please Specify……………………………………..............................................
63
4. To what extent do you trust the service of the E-Commerce platform(s)?
o Excellent
o Satisfactory
o Needs Improvement
o Unacceptable
o N/A
5. Do you feel safe using your bank/credit card information to make transactions
online through the E-Commerce platform?
o Yes No
If No, please state the reason why

………………………………………………………………………………………
…
6. What benefits/ difficulties have you derived/faced in using the E-Commerce
platform(s)?
o Convenient
o Ease
o Rigorous
o Epileptic
o Others Please Specify……………………………………………………………
7. Has the E-Commerce platforms been able to help improve your level of business
transactions?
o Yes
o No
o Not sure
o Don’t Know
o N/A
If yes how?
………………………………………………………………………………………..
8. How would you rate your confidence in internet facilities vis-à-vis E-commerce
in Nigeria?
o Excellent
o Satisfactory
o Needs Improvement
64
o Unacceptable
o N/A
Please let us know (in a few words) other obstacles and difficulties faced in using the E-
Commerce platforms that was not covered in this questionnaire.
……………………………………………………………………………………………
……………………………………………………………………………………………
……………………………………………………………………………………………
…………………………………………………………………………………………..
Thank you for your time.
65

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E-Commerce in Developing Nations: Issues

and Challenges. Consumer Attitude In the

Programme: International Business

Identification number: 15448

CHAPTER 1: GENERAL OVERVIEW………………………………………………..5

1.1 Definition of E-Commerce………………………………………………………...7

CHAPTER 2: LITERATURE REVIEW…………………………………………….....17

CHAPTER 3: RESEARCH METHODOLOGY………………………………………..31

CHAPTER 4: DATA ANALYSIS, FINDINGS AND DISCUSSION………………....34

4.1 Analysis of Data…………………………………………………………………...34

Table 1: Price of sending 42 page document to Tokyo from New York………………20

Figure 1: Age Group of Respondents………………………………………………….34

A GENERAL OVERVIEW OF E-COMMERCE AND THE PECULI-

1.1 Definition of E-Commerce

1.2 History of E-Commerce

 Consumer to Consumer (C2C): This is a type of E-Commerce transaction that is

1. Government to Consumer (G2C): This can also be referred to as Government to

Others transactions according to Turban et al., (2008), includes, Government to Em-

a. Peer to Peer (P2P): This is a particular type of E-Commerce platform whereby

According to Turban et al (2005), the E-commerce classification types above is per-

1.4 E-Commerce Platforms

1.6 An Overview of Developing Nations Peculiarities

 Network growth will make distance irrelevant in communication costing

Table 1: Price of sending 42 page document to Tokyo from New York

Air Mail 7.4 5 days

Courier 26.25 24 Hours

Fax 28.83 31 Minutes

Internet E-Mail 0.095 2 Minutes

 While the image of the internet as a mirror is presumed to be accurate, it is still

 Info-structure including technology and standards: The term info-structure deals

 Policy Regimes: This relates to the monopoly provision of telecommunication

3.1 Sources and Collection of Data

3.2 Research Design

3.4 Validity and Reliability of Study Instrument

The questionnaires were administered to users of varied E-Commerce platforms, in the

3.6 Procedure for Processing Collected Data

3.7 Limitation of Methodology

DATA ANALYSIS, FINDINGS AND DISCUSSION

4.1 Analysis of Data

Table 2. Demographic profile

Gender Frequency Percent

Fig 1: Age Group of Respondents

Which E-Commerce platform do you frequent-

Do you experience diffi-

Do you experience diffi-

Obstacles Faced in using E-Commerce platforms

Satisfactory Improvement Acceptable Total

Above 50 yrs Count 0 0 3 3

Total Count 74 26 50 150

Total Count 74 26 50 150

RECOMMENDATIONS, SUMMARY AND CONCLUSIONS

1. A lot of attention should be paid to infrastructural issues that will culminate in

Aghaunor L. & Fotoh X. (2006) ‘Factors affecting the adoption of E-Commerce in

Esselaar P. & Miller J. PhD. (2001), ‘Towards Electronic Commerce in Africa: A

Gebrezigabiher A. (2001) ‘Classification of E-Commerce’. [Online]. Available at:

Horst S. The World Economy. [Online]. Available at:

Olatidoye, O. (2004). Cyber-Security and E-Commerce. [Online]. Available at:

Rainer R.K., Cegielski C.G., Introduction to Information Systems: Enabling and

Singh S. (2005) ‘Electronic Commerce Technologies Management- ELECTRONIC

UNCTAD (2001) E-commerce and Development Report.

Weisman J. (2000) ‘The making of E-Commerce’: 10 Key Moments. [Online].

Woherem E. (2000), ‘Information Technology in the Nigerian Banking Industry’

Zorayda R.A., (2003) ‘Common Characteristics of the Developing Countries’.