CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Electronic business (ecommerce) has ended up being a considerable issue with the development of the internet. Today, huge business activities are carried out online. People go on the internet to sell and buy both goods and services, and lots of deals cannot be completed without Internet technology. Electronic business is an emergent research discipline with a background of less than twenty years. The exploding growth of electronic business tasks in the last years has attracted considerable interest from practice in addition to academics in various areas (Wang and Chen, 2010).
In Nigeria, the road to socio-political, economic, and technological development began after the year 1999. The year marked the debut of democratic rule after lengthy years of military dictatorship, characterized black of vision, economic anxiety, looting and insufficient infrastructural development (Ayo et al., 2008). However, electronic banking is one area of-commerce that has shown successful in Nigeria. Practically all financial institutions in Nigeria offer online, real-time banking services (Economist Intelligence Unit, 2006). Likewise, the Automatic Teller Machine (ATM) is one of the most commonly used tools of e-payment in Nigeria, which is not really appropriate for ecommerce implementation (Ayo et al, 2008; Chiemeke and Evwiekpaefe, 2011).
The emergence of e-commerce and the effect of this new technological development have changed the method to business transaction and procedures (Tan et al., 2010). The growth of technology and the internet in Nigeria since 2001 has resulted in a significant increase and experiment of e-business designs with a view to selecting suitable type to replace the typical conventional (bricks-and-mortar or face-to-face) system of carrying out business (Ikemelu, 2012). Also, ecommerce has improved business efficiency with automation of transactions (Christopher, 2011).
The term e-commerce adoption according to Ochola (2013) is the level to which an innovation is viewed into organizational tasks. The adoption of ecommerce Technology (EcT) offers many benefits across a variety of intra-firm and inter-firm business processes and deals in Nigeria (Ongori & Migiro, 2010). E-commerce Technology (EcT) is likewise anticipated to provide companies with affordable benefit together with integration amongst supply chain trading partners. For that reason, with the increasing diffusion of ICTs, more particularly the Internet, the international business community is quickly moving to Business-to-Business (B2B) e-commerce (Abdul, 2016). The buyers gain a clear advantage when the Internet provides access to the global market whereby, they can contrast prices across regions, discover whether prices differ by order fragmentation and get awareness regarding alternative products (Abdul, 2016).
Other benefits of e-commerce according to Oluwatayo (2010) and Singh (2011) are enumerated as: open for 24 hours, extended reach (number of people); targeted reach (intended customers); reduced deal costs; information symmetry; fast reaction to customers' needs; richness of information (latest information); decrease deal costs; channel flexibility (how to reach); simplified communication with trading partners; simple and economical method of advertising and marketing; and reduction of ineffectiveness.
E-commerce has developed itself in the developed countries; however yet to make roots in the majority of the developing nations, like Nigeria. There is a huge gap in Internet and E-commerce adoption between the developed and developing nations (Licker & Motts, 2000); therefore, creating a digital divide (Aghaunor & Fotoh, 2006; Chiemeke & Evwiekpaefe, 2011). Likewise, a great deal of researches has been carried out in the developed nations to analyze the factors impacting E-commerce adoption. However, their findings might not be generalized because of the differences (such as available facilities, social, political and cultural problems) between developed and developing nations (Kapurubandara & Lawson, 2006; Taylor & Owusu, 2012). Nigeria is not left from this innovation as business sectors in the state are starting to adopt the technology as a result of its reach values and capacities. The nation is totally not excluded as the majority of the businesses and transactions are currently running past the conventional bricks-and-mortar, thus real-time i.e., online based. However, the majority of the businesses and transactions are online-based, several are still running in the conventional method usually described as bricks-and-mortar.
The key route whereby ecommerce impacts the economy at large is with its effect on productivity and inflation. Customers in developed nations using e-commerce have the benefit of reduction in expenses in regard to the time and effort needed to reach for goods and services and to complete transactions (Craig and King, 1993). A number of studies have noted factors that affect people and companies to embrace ecommerce (Rodríguez et al., 2008; Grandon and Pearson, 2004; Kurnia, 2006). These factors are technological qualities, social qualities, and environmental qualities, time, relative advantage of e-commerce, IT expertise, and ecommerce compatibility. Based on the previous studies, this study intends to examine factors affecting e-commerce adoption in Nigeria.
Statement of the Problem
In developing nations like Nigeria entrepreneurships are seen as a driven force of growth as a result of the opportunities for job creation and competitiveness in international markets. In other to achieve full potential in these area Nigeria entrepreneurs need to catch up with new trend in business. More Studies on problems facing entrepreneurs in adopting e-commerce technology are worthy in Nigeria due to recent technology development. The factors affecting e- commerce adoption by entrepreneurs has not been greatly explored in Nigeria. Studies in Nigeria focus more on appraisal of information technology and few on factors affecting ecommerce technology adoption and usage among entrepreneurs. This is because information technology is gaining wider acceptance in other sectors in Nigeria such as financial institutions, insurance and others. This study aims to examine factors affecting e-commerce adoption in Nigeria.
1.3 Objectives of the Study
The general objective of this study is to examine the factors affecting e-commerce adoption in Nigeria. However, the specific objectives are;
i) To examine the rate of e-commerce adoption in Nigeria
ii) To understand the benefits of e-commerce in Nigeria
iii) To study the barriers of the adoption to e-commerce in Nigeria
1.4 Research Questions
The following statements are the research questions that this study will provide an answer to:
i) What is the rate of e-commerce adoption in Nigeria?
ii) What are the benefits of e-commerce in Nigeria?
iii) What are the barriers of the adoption to e-commerce in Nigeria?
1.5 Significance of the Study
As postulated by (MacGregor 2011) Expansion of customer base is allowed by online transaction through global market penetration due to enhanced access to information on an international scale, resulting in improved business performance, internal efficiency and their operations. The economic benefits of e-commerce are; increased productivity, sales, and economies of scale across the operational business processes.
1.6 Scope of the Study
This study will be conducted in Lagos as it is the commercial hub of Nigeria. However, data will be collected from 100 selected entrepreneurs and will therefore be deemed pertinent for statistical analysis and comparisons.
1.7 Limitations of the Study
The challenges the researcher faced was the financial aspect involved especially during the data collection phase and other activities related to the study however, with proper planning and self-organization, it was accoutered. Secondly the respondents might have ended up giving socially correct answers, where they were to respond to questions in a way viewed favorably by the researcher.
On the other hand, some respondents were concerned with their privacy and confidentiality of the information they were giving. This meant that they might have been worried that the information could be leaked, resulting to their harassment. To counter this, the researcher came up with a budget to enable her keep track of the expenditure, secondly the researcher assured the respondents of anonymity and confidentiality of the information given through the questionnaires.
1.8 Definitions of Terms
Adoption of e-commerce is the innovation of conducting business online which cost-effective, with competitive advantage and ensuring sufficient resources and skilled-staff.
Cost of ICT: The technology, financial and human resources for instance computer, telephone cables and lines that show a very a big part in the adoption of new technologies.
E-commerce: Online trading of products, information and business procedures to cut cost and increase speed and quality of service delivery
Perceived benefits: these are the presumed or anticipated net gains (or losses) to be realized by the individual or enterprise that adopts and consequently utilizes new technologies, and more particularly e-commerce.
