CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
New media technologies in this 21st century have witnessed tremendous breakthroughs especially in the area of commerce. Through the e-commerce technology, the internet has revolutionized the mode of business transactions by providing consumers with the ability to bank, invest, purchase, distribute, communicate, explore and research from virtually anywhere, anytime where there is internet access (Anup, 1997).
Access to the internet has become imperative for the advancement of online shopping and by extension e-commerce in Nigeria. Even with the grandest intentions to shop online, if there is no internet accessibility, it would be difficult to undertake any business online. The growth of the number of internet users in Nigeria from 2000 to 2010 is quite alarming as it recorded 21,891.1% growth rate! According to the Internet World Start (2010) (quoted in Ayo, 2011), there were 200,000 internet users in Nigeria in year 2000. This number is however less than 1% of the national population (precise 0.1%). In the year 2006 – the number has grown to 5,000,000 (again just 3.1% of the national population). This figure doubled in 2008 with 10 million people having access to the internet. In 2009, the figure went above double as 23,982,000 people used internet in Nigeria. By June 2010, the number of internet users in Nigeria has grown to 43,982,200, that is, 29.5% of the country’s population.
The potential of internet users’ growth in Nigeria is not unconnected with the increasing rate of access to internet enabled mobile phones, which appears to be the easiest and most common way to access the internet today. The growth of online shopping should inadvertently be sponsored by this growth in the number of internet users in Nigeria. Many online shopping sites are thriving with juicy offers to prospective customers. Some of the sites make the transaction process so easy that most buyers tend to forget about the traditional market setting. These sites are Konga.com, Jumia.com, Jiji.com, Taafoo.com and Slotlimited.com. A site like 234world.com allows buyers to pay to a designated bank account after making online purchases (Ayo, 2011).
Studies have shown that high level of education and increased personal income are two factors that can influence favourable perception of online shopping among prospective buyers (Ayo, 2006; Folrunso et al., 2006; Alley, 2010). Also, these studies pointed out that “Trust” and “Personal Constraints” are among the factors that restrict usage of online shopping in Nigeria. However, these scholars believe that “Trust” and “Consumers‟ perception of Technology” are among factors that are likely to encourage usage of online shopping among Nigerians. They also added that increased exposure to the internet increases favourable disposition to online shopping and development of favourable attitude towards it. Many Nigerians who wish to shop online face a number of challenges. The major aspect of these challenges is the stereotype of Nigerians as fraudsters. This leads to rejection of Debit/Credit cards with Nigerian addresses by some online shopping sites. Even when one’s Debit/Credit card is accepted, a long chain of verification process follows, especially when it is one’s first time of shopping online. This can be very frustrating to Nigerian online shoppers, but it is a cross we will have to carry for now unless of course we re-brand. Government efforts at re-branding Nigeria, especially as it concerns the general global perception was seen as a welcome development but was short-lived. The fluid nature of internet transaction or online communication raises the question of credibility of the source as well as that of the user (who can double as the source and the user at different times). This is in view of the fact that there is no “gate-keeper” to what goes in and what comes out of the web. Also the use of cyber-nyms or pseudo names in online communication makes it difficult to accept the real name of most users even when they appear to be sincere. However, amidst all these difficulties, studies have shown that some Nigerian online stores are doing quite well. They have been able to convince an increasing number of Nigerians to trust them and embrace online shopping (Alley, 2010; www.money.aabnigeria.com).
The top 5 online shopping stores (as at July, 2013) are:
Konga.com
Jumia.com
Taafoo.com
Slotlimited.com