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E-commerce can change the economies of developing countries. It can integrate them into the global market which in turn improves and strengthens the economic well-being of these nations. However, e-commerce practices in these countries are at an early stage and there are major challenges that can halt its growth. I categorize them into two main parts as follows;

Cultural issues

1. Lack of online culture

The electronic way of doing business is a new concept for the societies of developing nations. People usually buy and sell face-to-face. They see and touch (physically) what they want, negotiate the best deals, and shop. This is a type of business activity that they are familiar with that is completely different from the online way of doing business. The idea of ​​buying goods and services that cannot be seen and physically influenced is not the type of risk they can afford. Nor are they sure if online marketers are reliable enough to deliver the products and services as promised.

And retailers are afraid to sell their products online. Considering the lack of social habits of buying online and the reason that the electronic way of doing business is not well known, they consider the business to be high risk. They are usually reluctant to invest in online ventures. Therefore, this greatly damages the growth of e-commerce in these countries.

2. Lack of confidence

Basically, trust is a major issue in an online business environment. As mentioned earlier, people in developing countries are unsure of the online way of doing business, which is why trust is one of the main reasons. Because e-commerce is not a practice in these countries and business is usually done face-to-face, people usually ask trust questions. Are they obligated to think that they can trust people they cannot see and who may have found thousands of miles away? In addition, because e-commerce policies and laws do not exist in most developing countries, they fear where to go in the event of a dispute.

Infrastructure issues

1. Limited access to telecommunications infrastructure and high internet costs

Ecommerce requires technological basics. One of the main ones is internet access. Running an online business requires a stable and high speed internet connection. However, most types of Internet connection in developing countries are dial-up, which is very limited and slow. In addition, the cost of owning it is high. This is another challenge that e-commerce faces in developing countries.

2. Limited access to personal computers

Another major technological importance that e-commerce requires is personal computers. Owning computers is expensive in developing countries because they are mainly imported products from developed countries; which is another major challenge for e-commerce growth in these countries.

3. Absence of electronic means of payment to allow funds to be transferred

Banking is another major feature needed to do e-commerce. And in most cases, developing countries lack this great asset. Internet marketers in these countries are required to use offshore banking facilities if they are going to do business online.

4. imperfect legal system and obstacles in politics

E-commerce requires a complete legal system and policy. Without them, it is impossible to do business online. However, these nations often lack these major systems, which in turn could make e-commerce difficult.

However, while doing business online in developing countries is difficult, it is not at all impossible. This can be done given the circumstances. Still, it may take more effort to be successful. In addition, the industry needs time to tap into its potential.

Therefore, recognizing the potential of e-commerce in developing countries, there are concerned bodies where their cooperation can bring about a major change. These are government, professionals, network merchants, banks and customers. If they can work together and collaborate, they can completely avoid all of the above obstacles and can benefit their countries from the results of e-commerce.

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by Hanna Shiferaw




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