SMEs fail to embrace e-commerce

By Issa Sikiti da Silva, Dakar, Senegal

Despite the rise of the Internet in poor countries, micro-enterprises have failed dismally to lift the profile of e-commerce in the developing world, according to the United Nations Conference on Trade and Development (UNCTAD).

For a Dakar-based dressmaker like Khadija Cissé, who has been in the business of making and selling beautiful clothes for the past eight years, and whose business is booming, there is no question to even contemplating selling her products online, as she believes that that area is ‘strictly’ reserved for big businesses, especially white-owned.

“Online? You mean selling via the internet, why would I do such an ambitious thing? That’s for white businesses and major companies. My customers know where I live and work, and have my phone number where they can contact me anytime,” Cissé told Biztechafrica.

Some analysts believe that many informal entrepreneurs in Africa, who have been at the forefront of putting food on the table for their families for years, have not made any significant move towards formalising their businesses.

Cissé, who never attended formal school and was taught to sew by her late aunt, says she cannot use a computer nor does she have a business bank account.

The UNCTAD says opportunities created by e-commerce have not yet had a major impact on micro-enterprises in low income countries, for the following reasons:

  • Few micro-enterprises in developing countries have their own website or information about their products posted online.
  • Secondly, various constraints have been identified for developing-country producers in using web-based transactions and marketing.

Both business-to-business (B2B) and business-to consumer (B2C) e-commerce have largely failed to deliver the considerable potential benefits predicted in the earlier part of the decade, the UN agency said.

“An assessment of benefits from e-commerce found little evidence of producers in developing countries selling significant amounts of goods directly to consumers online. The overall picture is one of slow progress for e-commerce directly benefiting poor producers,” it added.

“A website? That will cost me a lot of money. Besides, I don’t even know how I’m going to run it and hiring someone to manage it will put a heavy strain on my resources,” Cissé said, adding that she has not yet reached that ‘level’.

She continues: “I remember selling beautiful African dresses to some European women tourists last year in June. They gave me their business cards and asked for mine, I was embarrassed I just wrote my number in a piece of paper. And I never heard of them again despite making promises that they will contact me.

“You are right maybe I should have done a proper follow-up, like an email.”

The UNCTAD says even in countries with high internet usage, e-commerce impact by SMEs has not improved that much.

The UN agency cited the Namibia case study, where it said it found high internet usage among business support organisations, but very low levels of access to the Internet and little e-mail communication by their client enterprises.

“The latter continued to rely on informal information sources despite the existence of a wide range of business information services locally.

“Reasons included a lack of knowledge of formal provision (such as via the Internet), and a lack of skills to use the information, while the institutional providers of information were often badly attuned to enterprise needs.”

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