CHAPTER ONE

                                         INTRODUCTION

1.1 Background to the Study

Recently, enterprises across the globe have experienced significant change in their business information system. Huge investments were made in enterprise resource planning system implementation but most of them struggle to get timely information that is needed to make effective business decisions and to ensure continuous growth of enterprise. E-commerce and its various models such as business to consumer (B2C), Business to business (B2B), consumer to business (C2B) are what we will be looking at in further chapters. Internet for example is becoming one of the most popular medium in transmitting various data. Users can find any kind of information within a shorter time compared with conventional method that consumes more time.

 In 2001, eBay has the largest user base of any e-commerce site (Bunnell 2001). In the same year, Alibaba.com achieved profitability in December 2001. In 2002, eBay acquires PayPal for $1.5 billion. Niche retail companies, Wayfair and Netshops are founded with the concept of selling products through several targeted domains, rather than portal. In 2003, amazon.com posts first yearly profit. In 2004, DHgate.com, China’s first online B2B transaction platform was established forcing other B2B sites to move away from the yellow pages model (Wang, 2012).

Away from timeframe trend, it is imperative to look at some of the Global trends of electronic commerce in some countries data. In 2010, the United Kingdom (UK) had the highest per capita electronic commerce spending in the world (Robinson 2010). As of 2013, the Czech Republic delivers the biggest contribution to the enterprises total revenue (TR). Almost a quarter (24%) of the country’s total turnover is generated through the online channel (Eurostat 2013). Among emerging economies, China’s e commerce presence continues to expand every year. With 668 million internet users,  China online shopping sales reaches $253 billion in the first half of 2015, accounting from 10% of total Chinese consumer retail sales in that period (Olsen, 2010).

Electronic commerce has transformed business processes in a number of organisations and will continue to do so in future (Al-Qirim, 2009).A number of scholars(Abraham Maslow) hold the view that innovations have positive impact on business operations and bring with them substantial benefits. Some of the benefits widely associated with innovations include the following: improvement in operational efficiency, access to a wider range of markets, greater potential for partnership with suppliers, improved customer services, accessibility and flexibility in administration, and partnership among others (Vaithianathan, 2010). Unfortunately, micro, medium and small esnterprises (MSMEs) in Africa are lagging behind most of the world’s economies in tapping into the possibilities linked to the emerging technologies and have, in effect, failed to realise the full potential benefits of e-commerce . Internet and e-commerce have the capacity to support all types of businesses and provide the capability for tremendous growth within and across borders to a seemingly unbelievable extent.

Although it may appear as a relatively recent innovation, e-commerce has been around for several decades with its first application being in the early 1970s through the Electronic Funds Transfer (EFT) that enabled electronic re-routing of funds between financial institutions. The development of Electronic Data Interchange (EDI) in the late 1980s and of the Automated Teller Machines (ATM) for undertaking financial transactions over computer networks followed soon thereafter. Later in the 1990s, the Internet and World Wide Web (WWW) technology were commercialized leading to the introduction of the term “e-commerce”. Since then, the technology has experienced tremendous growth within and across business enterprises (Turban et al., 2005; Heng, 2003). Over the years, especially from the late 1980s, the adoption of e-commerce and related ICTs has shifted from using it merely as a means of creating a sustainable competitive advantage to being an essential competitive weapon for business survival.

Hinson and Sorenson (2006) affirms that in the earlier years for instance, business-to business(B2B) e-commerce figures soared with estimates ranging between $200 and $600 billion globally for the year 2000 and was predicted to reach $12 trillion by 2006 (UNCTAD, 2004). The swift and incessant growth of e-commerce reportedly brought with it enormous benefits to organisations including small businesses by providing them with the ability to access international (UNCTAD, 2004).

The emergence of the internet is a medium in doing business as well as people lifestyle. In fact, internet is the essential prerequisite for the existence of e-commerce and when covid 19 break out,its made the world to get more connected through the internet. With the outbreak of the Corona Virus Disease of 2019 (COVID-19), online retail websites have made strong traffic gains as large part of the population are staying at home and ordering goods online which they usually would purchase in-stores. Amazon.com had almost 5.22 billon visitors in June 2020 followed by ebay.com with 1.52 billion visits (Clement, 2020).

 In developed economies such as Europe, America, China, Japan and Korea electronic shopping is part and parcel of people daily lifestyles. The growth of the internet and the sudden outbreak of the COVID-19 pandemic has accelerated, electronic commerce. Moreover, the growth of social media devices and e-search engine networks such as Facebook, Skype, Whatsapp, You Tube, Instagram, Google, and Emails has greatly facilitated consumers and online shoppers to research information about a product online before making purchases on an electronic stores or offline store. Infact, brafton.com states that 62% of people research products on Facebook before buying and 58% of these consumers who plan to buy products in the convention or physical stores visit Facebook page of the enterprise that they plan to buy from. Most of the consumers are looking for reviews of the products from previous buyers before making a purchase (Gavin, 2021).

E-commerce draws on technologies such as mobile commerce (M-commerce), electronic fund transfer, supply chain management, internet marketing (e-marketing), online transaction processing, electronic data interchange (EDI), inventory management systems, automated data collection systems. Modern electronic commerce typically uses the World Wide Web (www) for at least one part of the transactions life cycle although it may also use other technologies such as emails, social media. Electronic commerce transactions involve the purchase of products and services such as online books, music purchases or download of music in the form of digital distribution such as iTunes store and You tube (Coppola, 2020).

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 like Senegal. The expected penetration rates in the telecommunication sector in Cameroon for mobile, fixed/wireless and internet are 43%, 4% and 5% respectively (Formunyuy & Neneh, 2011).

Electronic auction (online auction) is simply defined as an auction which is held over the internet (Wyld, 2012). In general, online auctions come in a variety of types such as English auctions, descending Dutch auctions, first priced sealed bid auction, vickrey auctions. moreover, online auctions includes: business to business (B2B), Business to consumers (B2C), and consumers to business (C2B) auctions with the largest online auction site known as eBay which became the first to support online person to person transactions. The scope and reach of these auctions has been propelled by the internet to a level beyond what the initial purveyors had anticipated. This is mainly because, online auctions break down and remove the physical limitations of traditional auctions such as geography, presence, time, space and a small target audience. This influx in reachability has also made it easier to commit unlawful auctions within an auction (Mirriam, 2008).

The market participants of e-business can take the form of Business to business (B2B), Business to Consumers (B2C) and Business to Administration (B2A). With B2B, both participants are businesses which can results in high volume and high value relationships. A good example is a manufacturer of gadgets that sources components online to manufacturers that uses them to create their own products. B2C are business entities that deal directly with the consumers. Companies like Amazon, Alibaba, when most people hear electronic commerce, they think of B2C. Eliminating the need for physical stores is the highest rational for B2C growth. Business to administration (B2A) deals with government and public entities. Countless branches of government depend on or use electronic services or products in one form to another, particularly in the areas of documents management, and human resources. Online businesses can supply these services electronically (Ajeet, 2019).

• Statement of the Problem

In the 21st century, majority of companies especially small businesses have been facing a lot of problems in their marketing strategies due to intensive competition which has caused some that cannot withstand the competition to close down while others have had significant drop in their sales volume, margin and business perfoamcne. One of the major problems faced by these companies is the problem of high transaction cost associated with physical stores for distribution. Setting up a physical store or traditional marketing go along with high cost of renting or constructing  a business premise, high taxation cost such as company tax, building permit tax, high utility cost such as light bills, water bills, cable bills, high salesforce recruitment cost, advertising cost just to name a few. Another major problem is the outbreak of the COVID-19 pandemic which has caused many governments in the world to restrict the movement of their citizens as a measure to curb the widespread of the pandemic. Hence, the citizens are left with no choice than to embrace electronic shopping which is being loved by many consumers worldwide. The pandemic has led to the closure of many physical stores and enterprises that depend solely on the traditional marketing philosophy to market their products through physical retail outlets have witnessed a drastic decline in sales volume and business performance. Inflexibility of business transactions (the analogue economy) has also creates a lot of inconvenience to the customers. For example, overcrowding of customers in brick and mortal retail outlets to make purchases which can be conveniently done online at the comfort of homes. Queuing of students in front of banks to pay registration and tuition fees. The practice of electronic commerce in the current digital economy can help to solve some of the mentioned problems and thus, the reason for the study.

1.3 Research Questions: The main Research Question is:

What is the effect of E-commerce on business performance in Bamenda?. The following specific research question are set out:

1.3.1 Specific Research Questions

1.To what extent does Business to Business (B2B) E-commerce affects the performance of businesses in Bamenda?

2.What is the contribution of Business to Consumer (B2C) E-commerce on the performance of businesses in Bamenda?

1.4 Objectives of the Study

The main objective of this study is to assess the effect of E-commerce on the performance of businesses in Bamenda?

1.4.1 Specific Objectives 

1.To evaluate the effect of Business to Business as a form of e-commerce on the performance of Businesses in Bamenda.

2.To examine the effect of Business to consumer as a form of e-commerce on the performance of businesses in Bamenda.