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10 Problems Of E-Business In Nigeria And Possible Solutions

In this article, we will explain the meaning of e-business, ten problems of e-business in Nigerian and their possible solutions.

Meaning of E-Business

The key word in this article is e-business. What does e-business mean?

E-Business is an hyphenated word comprising of two words: e which stands for electronic and business which means to buy and sell products to make profit.

E-business otherwise known as electronic business is the use of the internet or web to do busness0. Sometimes, it is used interchangeably with e-commerce(electronic commerce).However, it is broader and more encompassing than e-commerce.

10 Problems Of E-Business In Nigeria And Possible Solutions
E-Business In Nigeria – Photo Source: https://ojasweb.com

E-business is more than buying, purchasing and selling of goods, products and services with the use of the internet. It is a combination of other business activities such as customer relationship management, processing of orders electronically, products and services demand, management of supply chain electronically.

Also, it involves other business activities such as digital/electronic marketing, content management, enterprise and resource planning.

Therefore, from the explanation above, it can be seen that the combination of all business activities and value chain addition is done on the internet.

To facilitate e-business, information and communication technology is used as the driving force. This is achieved with the use of the computer.

Simply, a company that transacted business online needs the computer to carry out business activities using the internet.

10 Problems of E-Business in Nigeria

E-business in Nigeria has been helped by the recent developments in information and communication technology. People don’t have to be physically present  to transact business.

Businesses are now transacted online; the activities of buying, selling and making payment are done electronically until the product is delivered to the customer.

E-business thrives on the internet  which is an important catalyst  for economic growth and development, and poverty reduction in Nigeria. It is also important in improving the standard of living of the citizens.

E-business is also seen as an important tool to create employment for the youth and also, to ensure that Nigeria earns high foreign exchange earn and make it have favourable balance of trade.

E-business has also ensured the increased  convenience of receiving payments online, maximising trade efficiency and reducing transaction costs.

However, despite the advantages explained above, the are problems facing e-business in Nigeria. In this article, we will explain ten problems facing e-business in  Nigeria and their possible solutions. The problems are explained below.

1. Poor Website Address

For e-business to thrive, there must be a website. Not just any website but a website with a verifiable address, phone number, e-mail address and customer care line. A lot of  websites owned by e-business owners fall short in this area.

Most e-business websites in Nigeria do not have verifiable physical addresses,  functioning phone numbers and e-mail addresses. Their customer care support platforms are either poor or non-existent.

2. Internet Fraud

Many Nigerians have not embraced  e-business totally. They are suspicious of transacting business online because of internet fraud and online scams.

By implication, people are reluctant and suspicious about putting their credit/debit card information online because of scams, fraud and phishing.

It is a common occurrence in Nigeria that people have been duped of their money by internet fraudsters running fraudulent e-businesses after putting their credit/debit card information online to pay for goods purchased online.

Hence, people prefer to pay cash when their  they receive their purchased item(s) to eliminate internet fraud and scams.

3. Illiteracy

Illiteracy is one of the major hindrances to the growth and development of e-business in Nigeria. A lot of Nigerians are illiterates.

By implication, they cannot participate directly on e-business website transactions because they cannot read and write.

The language of communication on most e-business platforms is English Language. Illiterates people  cannot sell and buy online because they cannot read and write in English.

Illiterate people  cannot buy and sell online because they cannot read and write in English Language. In simple words, they do not have the reading and writing skills to transact business online.

4. High Cost of Internet Broadband

Nigeria has witnessed a tremendous growth in the use of mobile broadband in the last few years. Despite this, it is known that the cost of using internet bandwidth is high.

This affects video and audio-based internet businesses. Such businesses struggle to thrive and grow, and may eventually be forced to close down.

5. Inability to Authenticate the Quality of  Items Purchased Online

This is true of  electronic companies that sell products like shoes, bags, phones, electrical appliances. The challenge here is that when one orders for any of these products on the internet, you may not be able to authenticate the quality of the products. This makes one to doubt the quality of the product(s)

6. Logistics

Logistics is an important part of any electronic business. Logistics is a very big challenge for most online businesses in Nigeria.

Many electronic businesses cannot deliver goods ordered online  to customers on time in most Nigerian cities and towns because of poor road networks. This hinders the efficient and timely delivery  of purchased products to customers.

Again, there is traffic logjam which causes the delay in the shipment of goods and products to the appropriate destinations.

Nigeria does not have a standardized physical address system because of poor urban and regional planning. This also makes it difficult for electronic business companies to locate customers and deliver their purchased products to them.

7. Knowledge

One of the reasons for establishing any electronic business is to ensure that customers can buy  any product conveniently from their homes and offices.

However, most Nigerians are not aware  about the possibility of buying products online at their own convenient time.

Consequently, this defeats the purpose of establishing any electronic business website. Such electronic business sites lack visitors to patronize them.

8. High Cost of Establishing Electronic Business

Most electronic businesses require high capital to establish them. Consequently, the cost of logistics, transportation, internet bandwidth, website maintenance, postal system maintenance is high.

9. Profitability

Most electronic business websites if not properly managed get little or no profit from their capital invested. Most investors are not patient for the business to grow and expand. They demand immediate profit for their effort. This is caused by the delay in logistics.

Also, most electronic businesses do not have good and efficient payment platforms. Consequently, customers can only pay for the products on delivery.

Sometimes, some of the products are rejected by  the customers on delivery to them. This makes electronic business companies to lose high profit.

10. High Cost of Shipping Products into Nigeria

When customers order for products online, they pay for the products. The products would need to be shipped into the country from foreign countries before they are dispatched to the customers who have paid for them.

By implication, electronic business owners incur  high shipping costs which is influenced by the high foreign exchange rate.

This is added to the cost of transporting the purchased products to the customers which makes the products to be more expensive.

Consequently, customers are forced to reject the expensive products and go for the cheaper products. This reduces the profit of  electronic business companies.

Possible Solutions to the Ten Problems:

1. The government should invest more on providing efficient and effective postal system, transportation networks, broadband companies.

2. The government should set up and empower institutions with relevant laws to checkmate fraud, scams and phishing and prosecute internet fraudsters and scammers.

3. Electronic business companies should use verifiable and authentic electronic payments platforms.

4. Electronic business owners should endeavour to use security certificates and encryption to protect customer’s credit/debit card information, passwords and login information from online theft, fraud and scams.

5. Electronic business sites should provide the customers with customised vouchers to retain customers. They could also run customer promos to sustain customer loyalty.

6. The government could come up with economic polices that would stabilize the foreign exchange rate, as this has a direct impact on the cost of shipping products into the country and consequently, the cost of selling these products to customers.

7. Owners of e-business websites should ensure that they have e-business websites that have easy-to-navigate platforms, verifiable e-mail addresses, phone numbers and active customer care support and platforms.

8. Owners of e-business websites should endeavour to educate and make people aware of the ease and importance of transacting businesses online

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Kolapo Babawale

Kolapo is a Content Developer at InfoGuideNIgeria.com. InfoGuide Nigeria is a team of Resource Persons and Consultants led by Ifiokobong Ibanga. Page maintained by Ifiokobong Ibanga. If you need a personal assistance on this topic, kindly contact us.

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