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Breakthrough of E-commerce in Ghana

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Thu, 19 Feb 2015 Source: Prince Boakye Boampong

As the internet revolution continues to sweep the globe, e-commerce companies continue to spring up in different parts of the world. It may be safe to say e-commerce in Africa is on the rise with the especially with the emergence of various platforms open to internet users to buy and sell.

The successes of companies such as Ebay, Asos, Amazon, and Kalahari.com have proven that the internet is a veritable tool for business. However, whether e-commerce has gained popularity in Ghana as it did other larger nations is pertinent issue to consider.

For the avoidance of doubt, e-Commerce is the buying and selling of goods and services over the internet facilitated by payment systems such Cash on Delivery, Wire Transfer, and Use of Credit Cards.

There is a ready market to be tapped in Ghana for online sales (especially to those living in diaspora), a country where traditional wears, beads, sculptures; paintings are a delight to tourists and foreign visitors. As of 2010, ecommerce was at its lowest ebb in the country a result of a plethora of drawbacks such as lack of necessary infrastructure like internet and inadequacy of shipping and payments process.

Ecommerce in Africa did not have much recognition let alone patronization. A reliable shipping service was not in place and people didn't bother to buy online since they were not assured that goods bought will be safely delivered to their doorsteps.

The issue of payments is also one that cannot be easily dismissed as insignificant being one of the major setbacks to the implementation of web shopping in the country.

Financial malpractices popularly known as 'Sakawa' created lack of trust in Ghanaians making it difficult and unsafe to purchase goods online.

The absence of a secure and reliable system of payment in place for Ghanaians made the dividends of e-commerce come across as mirage.

However, by 2013, when Jumia was launched in Ghana, the story changed and established a platform for the likes of Kaymu and Zoobashop in their struggle to change the negative impression about establishing a trustworthy buy-sell online relationship via Ghana’s ecommerce platforms.

According to statistical reports by internetlivestats.com, South Africa is said to leading in rank in number of internet users with about 46.88% of its population, Nigeria rivals with about 37.59% and Kenya not being left out has around 36.70% of with access to the internet.

The growing number of technologically inclined people have contributed massively to this advancement and that is the reason Ghana even though not there yet has an impressive 5,171,993 internet users of the more than 26 million of her population, a 19.56% irrespective of the nation's low per capita income and technology constraints which has prompted the hike in money expended on internet use.

E-commerce in Ghana is taking an impressive turn and making its mark, shopping online is easier, safer and convenient for the technologically savvy citizens, resulting in less crowded malls and the elimination of stampede at points of sale.

With continued rise of the middle income earners in Ghana with a GDP of $48.14 billion according to World's Bank Statistics there is hope for the future.

The greater the number of the middle class, the larger the number of Ghanaians with disposable income, a remarkable development for ecommerce platforms.

The rapid increase in the number of classifieds websites in Ghana has also helped to popularize the use of the web to buy and sell.

Hence, it’s not exceptionally amazing that Kaymu and Jumia, few of the most reputable ecommerce platforms in Africa with presence in 8 African countries has presence in Ghana. Nevertheless, this is a welcome improvement for ecommerce in the country.

Ghanaian President, John Dramani Mahama has also promised to invest about $5.2 billion into building an IT city in Accra to further boost the country’s ecommerce platforms.

As the use of the internet continues to grow continent wide with proper infrastructures in place consumer behavior will change and ecommerce in Ghana will take an upward leap raking in huge profit enough to conveniently support the nation’s economy.

Columnist: Prince Boakye Boampong