ABSTRACT

In recent decades with development of internet, the e-commercehas been recognized as an instrument for establishing business models. in applying the e-commerce, the large firms generally face lower financial and infrastructural barriers while the small to medium enterprises face with resource limitations, particularlythe financial resources in applying this tool. Hence, this study set out to assess the effect of E-commerce on the performance of Small and Medium Size Enterprises in Cameroon.

CHAPTER ONE

1.1 INTRODUCTION

E-commerce refers to a commercial transaction which takes place over the internet. With the development of the internet in the past, e-commerce has been recognized as a vital part of how organizations function and their business models. When it comes to applying e-commerce in organizations, larger firms face less financial and infrastructural barriers while small and medium size enterprises are face with limitations financially to apply the tools.

This study is out toassess the effects of E-commerce adoption on the performance of Small and Medium Size Enterprises (SMEs) in Buea Cameroon. It consists of 5 chapters, chapter one being the general introduction, chapter 2 the literature review, chapter 3 the research methodology, chapter 4, the presentation of the findings and chapter 5, the discussion, conclusions and recommendations.

1.2. Background of study

E-commerce has witnessed a true revolution and it became a very vital way for easy and quick trade. The first sales were made through the internet in 1991. During the late 1990s, a lot of organizations started adopting some forms of E-marketing such as emails and E-payments. This was mostly done by large organizations and financial institutions. Small and medium size businesses started adopting this in the early 2000s. In the 21st century, the world market has been supported by a market system that uses electronic infrastructure. By the end of 2007, e-commerce sales accounted for more than 3 percent of total sales. In 2016 online shopping became one of the most popular online activities worldwide but it depends on the region, for instance 19% of all retail sales in China occurred through the internet (2muchcoffee,2019).

Compared to other global regions, internet penetration in Africa remains low. Mobile is the main means of internet connection, as fixed connection makes up of less than 10% of the total internet subscription in many countries in Africa. According to Statista forecasts, the number of internet users in Africa increased to 565 million in 2022, six times more than 2010. The figure might come close to 700million by 2025. This would have shown a steady 17% annual growth rate (CAGR) of online consumers for the market. Compared to other regions, as of 2021 the African continent leads mobile internet usage than Asian region markets. This should indicate a “mobile-first” approach to any business looking to sell online to the various African markets.

The rise of the internet, the strong mobile penetration and the development of mobile money solutions are gradually transforming the habits of African consumers and making e-commerce in Cameroon to flourish. Sales generated in the e-commerce sector have continued to grow in Cameroon. The study estimates that 70% of shoppers are men and 30% women, one of the reasons to justify this is cultural as women go to the market daily feel less need to shop online as compared to men.

The number of actors on this promising sector is hard to define. The most popular, which happen to be marketplaces are Jumia, Cameroon-shopping, Lazoto, Nodis Cameroon.  There is an endless number of criteria which could be used to compare these super heroes of Cameroonian e-commerce. However, at this infant stage, the most interesting criteria are the structures of their websites and their operating modes. 

In an attempt to promote e-commerce and e-business activities in Cameroon, some organizations (ASAFE, Cameroon Business Forum, and Africa Business Forum) have implemented certain training programs and conferences to educate local businesses on how to integrate e-commerce into their activities. Another emerging trend that will increase ecommerce usage in Cameroon is the coming in of online payments systems. A couple of local and intentional companies are now providing online financial services to Cameroon. The local companies include Mobile Money Cameroon SA (www.mymoneysa.com), BICEC E-Pay Box (www.bicec.com), Afriland First Bank’s I-Card (www.afrilandfirstbank.com) while the international companies include Virtual PayCash (www.virtualpaycash.net) and BelCash (www.belcashcameroon.com).

In 2009, internet prices in Cameroon reduced by about 90% when the two telecom operators (MTN and Orange), the State telecom operator (CAMTEL) and new internet services provider (ISP) Ringo and about 20 other small ISPs started offering internet services by use of wireless modems. Mindful of these drops in prices, Cameroon still has some of the highest internet rates when compared to other African countries with similar economic profiles.

  1.3. Statement of the problem

Several studies have examined the effect of E-commerce on the performance of Small and Medium Size Enterprises around the world. But there is a lack of studies on the effects of adopting E-commerce on the performance of small and medium size enterprises in Cameroon. Businesses rely heavily on the internet to gain competitive advantage so its important for business men to adopt E-commerce so as to sustain and grow their businesses. There are a lot of challenges with E-commerce especially in developing countries and under developed worlds which makes the its practice and activities to be very difficult in those areas. Also the rate of E-commerce is still low in Cameroon as compared to other countries in the globe.

 Although multinational companies like Jumia, Afrimalin and young Cameroonian entrepreneurs drive ecommerce in Cameroon, consumers have challenges getting their goods and services properly handled and delivered. This issue makes it difficult for ecommerce to perform at the level it could.

Many Cameroonians also do not believe in buying online. They worry about transactions being fake and the risks that comes with these transactions. The number of people buying on Jumia, Afrimalin, Amazon and Ebay is rising in the country but it will to fully penetrate the market like other nations. There is a need for advertisements and education of clients on eCommerce’s advantages and safety in this sector (Exports news).

One of the biggest obstacles to eCommerce in Cameroon is the lack of payment methods. Many Cameroonians do not have bank accounts or debit cards. And for those that have accounts, not every financial house in Cameroon issue cards. This is extremely limiting because one can’t pay for goods and services online without having cards (Exports news).

Internet speed, access and costs in Cameroon also serve as a factor limiting the use of eCommerce. Reports show that 50% 0f Cameroonians have access to the internet and the number reduces as we move to rural areas where few users have access to smart phones. Broadband can cost 20 dollars a month which is about a quarter of what people earn. Added to this are risks of internet shutdowns. However, access to the internet is growing in the urban areas leading to increase in eCommerce in Douala, Yaounde, Buea and Bamenda where young people with internet access are increasing, he growth of eCommerce (Exports news).

Transport and infrastructure systems are poor in the country. The postal systems which eCommerce relies on is limited to a few alternatives to move parcels to remote areas. Although Jumia has signed a partnership with Cameroon postal service, bad roads and poor infrastructure are still a problem. This leads to delays in product delivery, this goes a long way to destroy the trust of consumers in eCommerce systems (Exports news).

 It was therefore against this background that the researcher was prompted to investigate and find out whether the low level of e-commerce adoption in Buea municipality is due to high cost associated with e-commerce activities or is it because there is still little knowledge of its importance to business world by business owners and users. This new way of doing business requires staff with expertise in new technologies and SMEs will not necessarily have dedicated IT staff to enable them to gain the necessary competitive advantage. Unlike large organizations, who may have specialized IT staff, SMEs may have difficulties first in meeting the initial costs and then the on-going expenses of maintaining the operation. Small organizations will not take up new technologies unless they perceive an advantage to do so, or an immediate disadvantage in not taking them up.

1.4. Research Questions

1. What is the adoption level of E-commerce in Small and Medium Size Enterprises in Cameroon.
2. What are the challenges in adopting E-commerce in small and medium sizes in Cameroon?
3. How does adopting E-commerce affect the performance of small and medium size enterprises?

1.5. Objectives of the study

1. The main objective of this study is to investigate the effects of adopting E-commerce in small and medium size enterprises Cameroon.
2. To identify the problems that small and medium size enterprises face when adopting E-commerce.

1.6. Research Hypothesis

H1: The adoption of E-commerce has an effect on the performance of SMEs in Cameroon

H2: the adoption of e-commerce has no effect on the performance of SMEs in Cameroon

1.7. Scope of the study

This study is carried out in the south west region of Cameroon with case study precisely in small and medium size enterprises in the Buea, Fako division. E-commerce is the independent variable and the performance of SMEs is the dependent variable. All other factors that can affect the performance of SMEs like capital invested, external environment are held constant for the purpose of this study.

1.8. Significance of the study

To Business Practices:

 The findings from this study may contribute to the effective practice of business through efficiency improvements in business processes and transaction in firms that implement e-commerce systems. The use of e-commerce can lead to improvements in business processes, cost savings, and productivity gains the findings may also have the positive effect of improving e-commerce knowledge within the business community, further contributing to the improvement of business practice. Owners and managers of firms that are yet to implement e-commerce systems may learn from the experiences and strategies of the SME business owners who have successfully implemented e-commerce systems, thereby acquiring the strategies necessary to implement e-commerce for their organizations.

To the society:

The potential contribution of this study to positive social change may include employment and wealth creation opportunities for the businesses, their employees, and the host communities.

Academic contributions:

The objective of this study was to explore the strategies that SME business owners may use to achieve successful e-commerce systems implementation. A fundamental motivation for this study was to raise the level of e-commerce adoption among SMEs in Cameroon.