The world continues to witness a revolution in the way business is conducted, and the uncharted area of e-commerce presents many opportunities and challenges to a newly emerging world economy. Apparently, the importance of e-commerce technologies in the development of international trade is immense and has a tendency to grow: under modern globalization circumstances, the application of information and telecommunication technologies has become a crucial factor of development in both international trade and economy in general Aurelija, E-commerce benefits internationalization in two ways.
First, as noted in PricewaterhouseCoopers there is a direct substitution of e-business technology and processes for physical locations, manual processes, or other expediting function. Second, e-commerce reduces coordination costs. Regardless of the above benefit it offers not all countries are equally beneficial from this new technology. Research shows that the associated benefits of information technology have been under-realized in most developing countries. In most developing countries, business face severe limitations in terms of connectivity, ability to pay, deliveries, willingness to make purchases online, infrastructure accessibility Straub, However, since e-Commerce is important tool for development, Poor countries can exploit rapidly expanding opportunities for profitable commercial ventures on the Internet.
It is known that, although the cost of using information and communication technologies for economic development is high, the cost of not doing so is likely to be much higher. Thus all sectors of a given economy should aware themselves to application of ICT. Import sector as part of trade subsector of Ethiopian economy should be competitive not only at home but also internationally.
To this end this sector should aware about ICT and e-commerce to efficiently and effectively carry out the business operation. E-commerce managers should understand that e-commerce offers sustained growth and profitability. ICT is growing, but is still in its infancy.
Very few private sector companies have established business-to-business websites and internationally accepted credit cards is none existent. The researcher believes that the aforementioned country wide problems are also exist on import sector, specifically on general imports.
General importers in Ethiopia are not fully utilizing their capacities to introduce this new paradigm, to be competitive internationally and to exploit the benefit it offers. Additionally, the author argues that this technology is not yet applied in optimal way. At present there is low adoption of e-commerce, As well as the fully-fledged e- commerce has not yet been achieved by Ethiopia B2B commerce.
In other words, 7 days a week, 24 hours a day have not yet implemented. These situations call for better understanding by the researcher. Thus the aim is that, by understanding opportunities and problems associated with e-commerce, will contribute to filling the gap identified, and thereby lay the foundation for a coherent body of knowledge, in the field.
In attempting to investigate the opportunities and practical challenge of electronic commerce activity of general importers in Addis Ababa the researcher coined the following leading questions. What are perceived benefits and risks of e-commerce adoption? What are the main opportunities to adopt and implement e-commerce?
What are the main challenges that hinder the development of e-commerce? Objectives of the study The main objective of this research is to assess the current Practices, opportunities, and challenges of E-commerce in Addis Ababa city particularly on general imports.
The specific objectives of this research are: i. Identify the main opportunities available to adopt and implement e- commerce. Identify the main challenges that hinder the development of e-commerce iii. Review the existing e-commerce practice of the sector.
Significance of the study The researchers aim is to investigate the current situations as well as the prevailing problems and to come up with possible, attainable and relevant solutions. In general the study will have the following significance. Additionally, it enables government organizations and trade associations to develop companies e-commerce assistance programmes that are designed to address the factors identified by this research.
So apart from providing a useful insight, is strongly expected to instigate other researchers to undertake a meaningful investigation by enlarging the scope of the issue. Delimitation of the study In order to ensure that the research project is manageable, it is necessary to demarcate the research.
Although this research was limited to the general imports category in Addis Ababa city, it does not imply that research on the same topic is not needed in other cities and business sectors. With given the limited time allocated and budget constraints, the study did not cover all importers.
Thus the scope of this study is confined to assess the current, opportunities and challenges of e-commerce in Addis Ababa city particularly on general imports. Business-to-business B2B e-commerce is by far the largest category of e- commerce, and accounts for the lion's share of web transactions today Corritore,et. Thus the study focused on business to business aspect of e-commerce. Limitation of the study While undertaking this study, researcher had encountered some limitations to mention some absence of well organized and documented information with regard to e-commerce in Ethiopia.
Shortage of reference materials about e- commerce practice in Ethiopia enforced the investigator to depend largely on foreign countries experiences. Moreover, inconsistency of some historical data kept by different institution is another limitation that affects the research. Organization of the paper The research is organized in to five chapters.
The first chapter deals with the introductory part of the research in which back ground of the research, statement of the problem, objectives of the study, significance, scope and limitation of the study , organization of the paper and Operational definition are incorporated.
Chapter three incorporate research design and methodology, which describes the methodology undertaken in relation to justification of the research design, questionnaire design, sampling process and data collection, administration and the intended analysis strategy. Chapter four discusses survey results presentation, analysis and interpretation.
Finally, conclusion and recommendation are presented in the chapter five. Operational definition General Imports: is the trading activity that the company import different types of product rather than sticking in to only one types of product. Importer: means any person who imports goods from abroad via land or sea or air into Ethiopia federal negarit gazeta, E-commerce: refers to the application of ICT to undertake trading activity which include from simple information searching using web, e-mail to electronic payment and full digitization.
Perceived Benefits of E-Commerce: refers to the gains or improvements derived from existing ways of operating business transactions using e-commerce applications. Perceived Barriers of E-Commerce- refers to perceived obstacles in adopting, using or extending use of e-commerce technologies. The sources considered in the review include books, past articles journals, previous thesis, and some documents from the government agencies and international institutions related to current e- commerce and ICT issues.
Electronic commerce is a growing aspect of the business community. In the past decade, the most decisive phenomenon is observed with the growth of internet and World Wide Web. Advances in the Internet and other telecommunications technologies have opened new frontiers in communications, commerce, medicine, politics, and almost every other aspect of private and public life.
It is not an embellishment to suggest that the Internet is among the most influential forces shaping the end of twenty century on ward. The Internet with its open environment, and other networks have made it possible for the organization to access and exchange enormous amounts of electronic information both inside the organization and around the world with minimal time resulting in lower communication and coordination costs Alter, Zwass , ; Turban et al.
Development of e-commerce highly depends on the levels of technical, managerial, economic, social, cultural and political aspects. Particularly its development directly correlated with the development of information communication technology. The main vehicle of e-commerce remains the Internet and the World Wide Web. E-commerce has gained growing attention in many countries, particularly since the s from both entrepreneurs and consumers.
In , the Internet had less than 3 million users around the world, and its application to e-commerce was non-existent. Definition of e-commerce Although e-commerce is widely discussed and studied, the definition is somewhat arbitrary. Besides, a single, clear definition delineating all the dimensions of e-commerce does not exist in the literature. This section lists some of the various definitions present in the literature. E-commerce is usually associated with buying and selling over the Internet, or conducting any transaction involving the transfer of ownership or rights to use goods or services through a computer- mediated network.
Different international organizations also define e-commerce. It encompasses many diverse activities including electronic trading of goods and services, on- line delivery of digital content, electronic fund transfer, electronic share trading, public procurement. From a business process perspective, E- Commerce is the application of technology toward the automation of business transactions and workflow. From a service perspective, it is a tool that addresses the desire of firms, consumers, and management to cut service costs while improving the quality of goods and increasing the speed of service delivery.
From an online perspective, E-Commerce provides the capability of buying and selling products and information on the Internet and other online services. The common points that different e-commerce definitions stress are Gunes, : v E-Commerce is applied via open or closed networks.
E-commerce, via the internet or the next generation of internet protocol, will change business institutions, operations, and products and services, as we know them today, just as the telephone, television, fax, and e-mail have changed the way businesses and consumers communicate. Figure 2. Academics have already drawn up a number of frameworks for classifying e-commerce but each one tends to explain it from a particular perspective.
Two of these frameworks are discussed in more detail below. Classification of e-commerce by transacting partners E-Commerce can be between business and business, or between business and consumers, or can be between business and government, and can be many more.
It is the largest form of e-commerce involving business of trillions of dollars, and accounts for the lion's share of web transactions today Beverly and Cynthia In this type, the buyers and sellers are both business entities and do not involve an individual consumer. Generally, this includes procurements of raw materials and supplies, liaison with contractors, sales channels, servicing customers, collaborating with partners, integrated management with data and knowledge.
First is the reduction of search costs, as buyers need not go through multiple intermediaries to search for information about suppliers, products and prices as in a traditional supply chain. In terms of effort, time and money spent, the Internet is a more efficient information channel than its traditional counterpart. Through B2B, suppliers are able to interact and transact directly with buyers, thereby eliminating intermediaries and distributors. Moreover, among the more evident benefits of B2B is the increase in price transparency.
The gathering of a large number of buyers and sellers in a single e- market reveals market price information and transaction processing to participants. Furthermore, the bringing together of a significant number of buyers and sellers provides the demand-side economies of scale or network effects. Each additional incremental participant in the e-market creates value for all participants in the demand side. More participants form a critical mass, which is a key in attracting more users to an e-market en.
Classification of e-commerce by degree of digitization Choi et al. Three main dimensions can be isolated as: Traditional e-commerce: where products or services are physical, the process of the transaction is physical and the delivery agent is physical. For example, software update services of companies like Microsoft, Cisco, and Symantec; downloading of electronic books; peer-to-peer file sharing. Partial e-commerce: where either one or two of the dimensions are physical.
For example in the case of booksellers Amazon, the products books are physical, the process is digital and the delivery agent is physical. By identifying the areas that could potentially be digitized, organizations can re-engineer their business processes to improve efficiency, reduce costs, access global markets and benefit from the advantages presented by e-commerce and e-business Choi et al. Developed and developing countries differ in terms of the level of IT investment, the degree of IT diffusion, and the economic return to technologies.
Moreover, the extent of technology usage and performance impacts depends on a variety of economic, social, and political factors, including income, education, technology policies, cultural norms and access to formal and informal communication networks. E-commerce poses challenges to developing countries, but at the same time offer opportunities. The commercialization of information communication technologies has been widely recognized as an important tool for economic growth.
Most developing countries have yet to significantly benefit from the vast resources and opportunities made possible by information technology and benefits of information technology have been under realized in most developing countries. By and large, businesses in developing countries, because of managerial, organizational, and environmental constraints, face substantially greater risks in implementing e-commerce than businesses in developed countries Alemayehu and Linker , Odedra characterize developing countries as having poor telecommunication, poor transport systems, poor electronic payment systems, no security, and no skilled workforce.
This lead to lack of knowledge on the benefits from ecommerce and if knowledge is present, the implementation of e- commerce projects for marginalized communities is still not undertaken for lack of resources. The level of education, the availability of IT skills, the level of penetration of personal computers and telephone within the society hinders adoption of ecommerce.
The cost of accessing the infrastructures also influences the growth of ecommerce. The priority for most developing countries is to put in place the necessary infrastructure and a competitive environment and regulatory framework that support affordable Internet access. The monthly connection cost of the Internet far exceeds the monthly income of a significant portion of the population.
The geographical separation of buyers and sellers, often coupled with a lack of real-time visual or oral interaction, creates a barrier to ecommerce adoption in developing countries. Most people in developing countries are illiterates and uneducated. Moreover, English is a primary language used in many Western countries where new technologies originate. It is the predominant language for development of IT and ecommerce and it is the main language used on the Web. The most common are unfavorable economic condition , the poor state of educational system , Lack of ICT skills and business skills ,un reliable and non secure payment infrastructures , the inefficient logistics and distribution system and the lack of good transport.
Organizational obstacles: Access of most the telecommunication channels are controlled by state monopolies and conclude that monopolized situation in developing economies is the one of major obstacle. Financial obstacles: many countries in Africa have low gross domestic products , low GDP per capita and no financial autonomy in operating entities and poor state of banking system usually faces the financial obstacles in the development of infrastructure Meso et al.
Technology obstacles: Mbarika, explained that technological issues are the major concerns in the growth of teledensity, most of the telephone system is placed to serve the need of the government which tend to be confined to major cities.
Moreover the use of outdate equipment and poor maintenance of equipment is also creating hindrances. Hence such areas are not an ideal place for private investors Mbarika, Additionally, it also creates barriers that the Libyan society has to find ways to solve by adjusting their business practices to accommodate them.
He concludes that E- commerce in Libya is still in its infancy stages of development. Another researchers, Ziad et al. Ziad et al. The economic obstacles include several factors that affect the diffusion of e-commerce such as slow internet diffusion, unavailability of credit cards, unavailability of a physical delivery system, and low bandwidth availability. Finally, the cognitive hindrances contain a number of factors which lead to a negative cognitive assessment of ecommerce of individuals and organizations like inadequate awareness, knowledge, skills, and confidence; a lack of awareness and understanding of potential opportunities; lack of confidence in service Providers and the postal network; and computer illiteracy.
Sherif and Maha identify number of challenges that face the growth of e-commerce in Egypt. According to them awareness is a critical challenge for e-commerce implementation in Egypt from the consumer and the corporate perspectives. Beside this e-commerce infrastructure is not yet fully in place.
The non-existence of an appropriate and secure e-commerce enabled environment is a disincentive to the sector. Telecommunications Infrastructure is growing but still lagging behind in terms of being capable of providing the required infrastructure for the Internet. It is perceived that the cost of the telecommunications services is rather expensive. Lack of trust remains challenge for e-commerce diffusion.
In their latter studies Sherif and Maha relate e- commerce challenges in Egypt in to a variety of social, technical, financial and legal challenges. With respect to the technological challenges, there is the problem of relatively weak resources with respect to the telecommunications infrastructure.
This includes bandwidth cost that is almost two and half times more expensive than the international tariff with low capacity level, which is extremely modest, leading to long waiting time for access and downloading. With respect to the financial challenges, there is the lack of electronic payment systems. For e-commerce to succeed, electronic payment systems should be available, efficient and secured.
However, to date the electronic payment system is non-existent in Egyptian banks. With respect to the legal challenges, the non-existence of an Egyptian certificate authority is a major problem. Zeinab also undertake research and Analyzed Barriers that Face Egypt in Implementing E-commerce and forward the following major hindering factors.
Key hardware and software used in major e- Commerce application and engineering projects are dependent on foreign companies. System integration and information service level has lots to improve, while IT application and ecommerce standardization awaits lots of work for solutions. Wide band connection and quick response on line have been so far a luxury. Three problems have been haunting Chinese companies in their acceptance and application of e- Commerce: a.
National credit rating system for both companies and individual consumers not yet completed. Electronic payment means on line not up to security expectation c. Logistically underdeveloped distribution and delivery system to conclude the demand and supply chain v Human resources issues One of the outstanding issues is Chinese companies have very few access to personnel familiar with both IT technology and the business sector the companies are involved. It is a problem of education system not yet responding to the market demand, combined with lack of financial incentives for training and preparing such type of engineers.
There has been no adequate training of employees, including senior management, on application and significance of e- commerce, which may be one of reasons for lack of motivation towards e- business in lots of Chinese companies. Ethiopian experience and nature of Ethiopian e-commerce environment 2.
Nowadays, information communication technology is one of the most decisive factors to achieve, economic development. Information and communication technologies can be an extremely powerful enabler in efforts to bring positive and sustainable socio economic and political development to countries around the globe.
Information communication technologies facilitate the delivery of basic social services: health, education, agricultural extension services, and good governance. Conducting old businesses in new ways and embracing new business opportunities has now become part of any economic transformation Assefa and Wubalem, As show in the table 2. Skills sub-index: reflects the high level of achievement in developed countries as well as the nature of the proxy indicators employed. Ethiopia sits at the bottom of skill sub index indicator, which lags behind even by African standard.
Ethiopia sits at the bottom with global rank of out of countries. Internet users: Africa has the lowest number of internet users compared to the other continents which left behind in the ICT race. Ethiopia has small number of Internet users and very small Penetration even by African standard. Internet host: An Internet host is a computer connected directly to the Internet. The number of hosts is one indicator of the extent of Internet connectivity. Ethiopia ranked th in the world with total internet host ITU, Table 2.
In spite of recent liberalization and privatization in different sectors, the telecommunications industry has remained under Government control. For very long, the regulatory aspect was carried out by a single public organ. Fixed-line teledensity stands at1.
The market is characterized by excessive pricing, especially in the broadband and international direct dialling segment, poor quality of service, inefficiency, , and the absence of choice that had a detrimental effect on the revenue of the incumbent and the productivity of public and private enterprises. The country faces a substantial gap between interest in the ICTs and the policy and regulatory instruments available to enable its development.
In Ethiopia, , the low quality of services has been a common problem, is a result of the overall bad performance of the telecommunications regulatory environment. Despite improved network penetration over the last consecutive years, through a vendor sponsored loan programme, the incumbent monopoly did not have an incentive to improve the quality of service due to lack of competitive pressures and inherent inefficiency.
Recently, December 26, Meron Tekleberhan pointed out that a constant grievance heard in Addis Ababa has been the persistent problems experienced with internet connectivity. The telecommunication law that favors Government monopoly has adversely affected the development of the ICT infrastructure. The long waiting time for fixed lines and mobile telephones and the complaints of users about the quality of the services suggest that closed-market policies are inconsistent with the desire to expand the use of the new technology.
Two years latter other survey was made and identified the problems related to human resource in ICT. An overall shortage of ICT professionals at all levels is observed Frehiwot, et al. The sector faces a significant skilled human-resource shortage for planning, implementation and management of a modern next generation network and its regulation. The absence of technical, analytical, policy and regulatory capacity at all levels has been the major challenge in stirring the communication sector out of its low level development.
Pro- competitive policy intervention is important to deal with current poor service penetration, low quality of service and high cost of broadband access. Unfortunately, a lot of content on the Internet is in English, which creates a barrier to the Amharic speaking population Harry, The government is making high efforts to make information and communication technology ICT as a tool in its strategies of eradicating poverty.
It has been also considered ICT as a vital aid to solve the poverty issues with the effective application of the technology. It was with this aims that Ethiopian Information and Communication Technology Development Agency EICTDA has been established as an autonomous federal government public office having its own juridical personality with the proclamation no. EICTDA is also working with the aim of creating an informed and knowledgeable society as well as building a developed nation in line with the governments overall development goals and strategies have formulated various programs.
The possible realities in the near future regarding ICT Infrastructure indicate that there is a conducive environment for development of ICT applications. Some indicators for a promising future are that: To overcome the problem of ICT human resource requirements, there are several initiatives of establishing tertiary level learning institutions both by the private sector and the government. The council of ministers decided on March 5, , to establish the Information and Communication Technology Park Corporation with a capital of five billion Birr.
Various ICT companies will lease space in this park and conduct educational, service and production businesses. The park corporation will be critical for the success of these projects, which aim to interconnect all woreda, schools and universities in the country in an information network, which, according to the official, is the reason why the government has allocated a huge starting capital Addis Fortune, Even though the country may still have one of the lowest ICT development in the continent, there are signs that this situation will soon change.
The strategy is built on three main streams Dawit et al. Finally, the national ICT education, training and awareness initiative promotes ICT awareness and literacy, lifelong and adult education, and distance and virtual education and learning.
On 18 January Ethiopia and Egypt have signed a memorandum of understanding enabling them to work together in Information and Communication Technology. Mohammed Salamo held talks with its Ethiopian counterpart on ways of joining efforts for mutual benefit. January , an ICT association has been launched for the first time in the country, according to the Reporter.
On a financial liberalization index, this measures banking security and independence from government control on a scale of 10 to The sector is characterized by a shallow financial market, a closed nature, and strong government Control. With a growing number of import-export businesses, and increased international trades and international relations, the current banking system is short of providing efficient and dependable services Kiyota et al.
E-banking challenges in Ethiopia Banking and Finance is an important sector for establishing e-commerce. There are some roles of banking sector in ecommerce such as, online corporate banking, electronic fund transfer, automated teller machines ATM , debit card, credit card etc. Bank is the only authorized organization which can store and transact money.
Technological developments in banking sector make trading activities much easier and cheaper for customers. It provides convenience in terms of the capital, labour, time and all the resources needed to make a transaction Uppal, Banking in Ethiopia faces numerous challenges to fully adopt E-Banking. Ethiopia has not yet enacted legislation that deals with e- commerce concerns.
For citizens to fully enjoy the benefits of E-Banking, they should not only know how to read and write but also possess basic ICT literacy. Compared to the developed countries, there are higher costs of entry into the e-commerce market in Ethiopia. These include high start-up investment costs, high costs of computers and telecommunication and licensing requirements.
A payment is usually made in exchange for the provision of goods, services or both, or to fulfill a legal obligation. The simplest and oldest form of payment is barter, the exchange of one good or service for another. In the modern world, common means of payment by an individual include money, cheque, debit card, credit card, or bank transfer. Currently the usage of credit card in Ethiopia is very low. There is no issuer of local and international credit cards.
But there are some business firms e. Hotels, supermarkets, etc that accept international credit card. This payment system is mainly used by foreigners and Ethiopians residing abroad as they come to Ethiopia and want to get money using their credit card. Import Trade Mode of Payment An Ethiopian importer or exporter who is engaged in import or export business in Ethiopia should know what type of import and export payments in Ethiopia are possible while doing import or export trade in Ethiopia or with Ethiopian businesses.
The following section presents the methods of payment used in international import export business. The three methods of payment allowed by the regulation for import activities are listed below CBE, Cash against Document CAD With regard to the use of the CAD, importers have to submit purchase order for prior approval from banks in addition to those documents required for the LC mode.
Purchase order presented for prior approval by importers should include, among others, details of the place of cargo discharge. Importers who wish to import goods by effecting Advance Payment are required to submit a letter of undertaking to assure the entry of the goods into the country in addition to the documents required in the case of other modes of payment.
The amount that would be approved for advance payment cannot exceed 5, dollar. By reviewing the experience of different developing countries, number of benefit and challenges of ecommerce were identified in the literature. Identifying such specific opportunities and challenges specifically to current Ethiopian business environment gained more and more attention of researcher.
Thus, study in this area is necessitated. An appropriate research design is essential as it determines the type of data, data collection technique, the sampling methodology and the budget Hair et. In an attempt to assess e-commerce practices, opportunities and challenges of general importers in Addis Ababa, the researcher used descriptive type of research design.
Descriptive statistics analysis is used in the interpretation and discussion. Descriptive research is a type of research that is mainly concerned with describing the nature or condition and the degree in detail of the present situation. Creswell stated that the descriptive method of research is used to gather information about the present or existing condition. Data measurement In addition to other close ended and open ended questions, the questionnaires also included likert scaled questions.
So the data measurement for the questions used likert method, a self report techniques for attitude measurement in which respondents were asked to indicate there degree of agreement or disagreement with each of a number of statements churchil, In relation to the number of scale points, there is no clear rule indicating an ideal number. However, researchers acknowledge that opinions can be captured best with five to seven point scales Aaker et al.
In fact, researchers indicate that a five-point scale is just as good as any other Malhotra, ; Parasuraman, Target population and sampling technique To undertake this research the sampling process included several activities: define the population, establish the sampling frame, specify the sampling method, determine the sample size and select the sample. Therefore target populations of this research were all general importers that are found in all sub cities, Addis Ababa.
For this study, lists of general importer in each sub cities were got from ministry of trade and industry data base as a readily available list of population elements ministry of trade and industry data base, Sampling frame: To establish the sample frame, a list of general imports was obtained from ministry of trade and industry of the ten sub cities, from Akaki Kality sub city, Kolfe, Gulele, Lideta, Nefas Silik , Arada, Yeka, Adis, and Bole , Kirkos sub city. Sampling method: two stage sampling was used to undertake this research.
In the first stage the researcher select three sub cities in which samples were taken and then select the required sample size from each sub cities in stage two. This method of sampling often is more convenient when the population is much dispersed. It is more manageable because of time, expense, and convenience. First, Judgmental sampling is used to select the three sub cities that are considered for the study. Accordingly, those sub cities which has the highest number of general importer were first considered and selected.
There by kirkos has total of general importers , Bole has total of general importers, Addis sub city 94 general importers were selected during first stage for further investigation. To do this the researcher went to the above sub cities major trading centers and distributed the questionnaires to the general importers who are available and meet at the time when the researcher went to their business area during work hour.
In order to get this areal much dispersed sample and in order to save time and cost, those respondents managers who are not available when researcher distributed the questionnaires were not considered. So the sampling was based on their availability and questionnaires were distributed until the required number of sample was reached for those who are willing to complete the questionnaire.
Finally, E-commerce is a strategic issue which should be handled by top management of an organization, thus the questionnaire purposely administered to the top managers of the organization. Sample size and selection: sample size is a process of selecting a sufficient portion of the population for the purposes of generalizing the findings. The aim of using sampling method according to is to adequately manipulate the large number and reduce the cost of producing the questionnaire to the entire population.
This research use the formula for estimating the sample size provided by Yaro Yamane which was cited in Obasi and Ekwueme Out of importers the researcher had selected total of general importers from the above chosen sub cities to be included as a sample.
Method of data collection, Data gathering instrument and data sources In order to conduct this research basically primary were collected on a number of companies involved in general imports category. In addition secondary data were used in support of primary data.
Survey questionnaires Questionnaires are appropriate for gathering the views of a large number of people about a Particular phenomenon Stroh, Questionnaires were used to gain general picture of ecommerce practices, opportunities and challenges. To achieve the aim of this research, twenty two questions were designed and administered to managers of the company in two parts. The first part of questionnaire was used to collect demographic data such as gender, age, level of education and experience.
The second part of the questionnaire was designed with the purpose of collecting data about e-commerce practices , opportunities and challenges of general importers in Addis Ababa as shown in Appendix A below. In order to ensure the comprehensiveness of data, these questionnaires consist of open ended and close ended statements, some of which are statements evaluated on a Likert scale. Closed questions obtain responses by selecting from a given set of options such as yes or no, agree or disagree, or by checking preferred answers.
Open ended part of the questionnaire consists of questions where the respondents were asked to describe the answers on the space provided for additional explanation and comments. Questionnaire designing Questionnaires were designed after reading a number of literatures extensively.
Some of them are adapted from prior studies and previously designed questioners but with certain modification to feet with Ethiopian context and the objective of the research. For instance likert scale survey about Barriers of using e-commerce technology adapted from Zou and Seo, ; Kapurubandara , ; Kapurubandara ,and Lawson , , likert scale survey about benefits of using e-commerce technology adapted from Dube et al.
Document analysis Documentary analysis was also conducted to obtain broad, in-depth and specific information, from secondary data mainly about Ethiopian current ecommerce practices. To this end, various statistical reports, published and unpublished materials were examined.
This provided a broader view and a deeper understanding of the research Problem and findings. Data analysis and presentation Data analysis involves selecting the appropriate data analysis strategy, coding the responses and screening the data. Data screening Data collected under the above stated methods have been used for analysis and further interpretation of the survey. It has considered verification for completeness , editing, grouping and classification of raw data. Data analysis strategy Selecting the appropriate statistical analysis technique is very important to achieve the intended objectives of this research.
To do this, research elements, namely the research problem, objectives, characteristics of data and the underlying properties of the statistical techniques are considered Malhotra After completion of data collection , in order to meet the objectives stated in the above section, , descriptive method of data analysis used by the researchers. Detailed Explanation and interpretation of the collected data was made by presenting the data in the form of tables, frequency distribution, percentage and other suitable Forms of data presentation with the help of Microsoft Excel software packages.
A likert scale of 5 has been used where 1 is used as a lowest value and is assigned to the lowest or worst option were as 5 is the highest value, assigned to highest or the best option. To make easy the interpretation, the following values are assigned to each scale, which was used to interpret the total responses of all the respondents for likert scaled survey question by computing the weighted mean: Range interpretati Range interpretat Range interpre on ion tation 1.
These two hundred three respondents constituted the units used for analysis. The chapter has three sections. The first section of the chapter focuses on presenting information about e-commerce in Ethiopia which obtained from secondary sources. The second section presents demographic characteristics of the respondents.
The third section of the chapter presents major findings related e-commerce practices, opportunities and challenges of general importers in Addis Ababa. E-commerce in Ethiopia Ethiopia still has a highly regulated telecommunications infrastructure.
There is only one ISP state-controlled and demand for Internet services far outstrips supply there are approximately 2, subscribers with a waiting list of a further Although the ETC has promised to provide such services, they seem unable to do so, or are slow to meet the demands of the community. Many Ethiopian entrepreneurs are based outside the country, selling various unique Ethiopian- content products online.
Foreign-based Ethiopian websites market Ethiopian art, music, designs, geez Font software etc. Despite regulatory and infrastructure problems, there are a few Ethiopian companies identified as e-commerce operations. A poor banking infrastructure, the absence of credit cards and stringent exchange control regulations are significant barriers to development and the growth of e-commerce. There is Low quality of Internet access in terms of number, reliability, capacity, cost and range of services of Internet Service Providers.
It seems to be the cost of internet is small relative to other neighboring states but it is expensive relative to per capita income of majority of the population. According to this report, there is no policy framework or specific regulations in place that deal with e-commerce. But these problem solved very recently, when Ethiopia draft e-commerce law on February There are a few initiatives by the private sector and donor community to promote e-commerce.
The Addis Ababa chamber of commerce has taken an interest in e-commerce and has organized a few workshops to highlight the benefits of e-commerce for business and to encourage government to liberalize this sector. E-books of different categories are available for sale. Articles are also available for reading. The buyer can pay using Dashen Bank ModBirr or in person. After the company receives the money, send back an email containing the download id and link ebirana.
Ethiogift EthioGift is a gift giving service in Addis Ababa during multiple occasion including anniversaries, wedding, New Year, cultural holidays and much more. Its main objective is to rebuild the family ties among families separated by the expatriation of millions of Ethiopians all around the world due to war and other economical problems.
As of today, ethiogift is the only successful E-commerce initiative in one of the poorest countries of the globe, Ethiopia. The gifts range from sheep, cakes, liquor, flowers and chocolates on a commission basis, all of which are typical gifts given on certain holidays and birthdays. For example, during Easter Ethiopians living abroad order sheep to be delivered to their relatives in Ethiopia. Most Potential business opportunities for this site is, there is an Ethiopian Diaspora of around one million people living mainly in Europe and the United States.
Ethiogift basically face the following obstacles: v Poor local banking infrastructure has obliged ethiogift to bank in the United States. The consequence of this is that Ethiogift is subject to United States tax laws. In-house procedures take an hour or two to respond to an online order received correctly, which then takes two days to leave the country. Urgent changes cannot be made. In house procedures take an hour or two to respond to an online order received correctly, which then takes two days to leave the country.
Also costly in terms of time and actual disbursement. The company works with a credit card clearing company in the United States; this is not legal but it has no choice. Ethiopia e-commerce law Although the country has an unskilled labor force and limited access to technology, by considering multiple benefits of e-commerce and the challenges associated with the absence of a regulatory framework, Ethiopia drafts e- commerce law on February The Ministry of Communication and Information Technology, Ethiopia is preparing a national draft law to govern electronic commerce.
In conclusion, electronic commerce plays a significant role in the development and economic growth of countries as well being a benefit for people applying technology in their daily. Table 4. The second item of the same table shows the age of the respondents. As shown in the table, And Lastly, 7. It can be understood that majority of the respondents are adults which is between ages years old. In most situation adults are very eager and have a good tendency to interact new technology and change.
People with the higher level of education have more exposure to computer skills than people with the lesser education. It can be deduced that education level is positively related to the adoption of e-commerce. Even though masters degree and above is put in highest academic rank among the other , holding first degree and diploma is better than from lower rank of holding certificate or less.
From this it can be conclude that on average majority of respondents have good academic backgrounds, so there is a tendency to make good managerial decision based on the knowledge they have. Based on the figure, So it can be said then, that the majority of the respondents of this study are somewhat experienced enough to see the trends of e-commerce and computer technology, as well as its opportunity and trait it offers.
Company information E-commerce involves business communication and transaction. This indicates exchanging and sharing of information across the network of organizations and participants. NB, for the first item, 3 respondents were not answered, so analysis was based on the remaining respondent.
Item 1 of table 4. A website is information resource that is suitable for any party who wants to get information about the company, accessed through WWW. Kaikake c. Tsudo 10 Usability 11 Testing 12 Reusable components Page 14 of 21 Browsing compatibility: Client needs to mention that which all browser and versions of the same to be compatible. A list to be prepared, points to be taken care during development phase.
Testing for browsers to be planned and conducted. Inverted V model is to be followed. Project plan is to be prepared and all the assignments to be included. It keeps on getting updated. Statistics for no. If site required to be Multi linguistic, it is apt to be designed using resource file h. Location for validations server side and client side or both to be discussed and defined apt i.
Adding products and their attributes to be easy j. Build on existing: check if client allows OS commerce - readymade shopping cart in php is proven cart management component Screen design and layout- a. Preparing screen design in html format b. To prepare a functional document c. To conduct brain storming sessions within team members, and improve on the gaps observed in proto type and FS.
Involve top resource in the discussions. To get both prototype and FS approved by client. Design: Following points to be checked a. Design pattern to be decided MVC. Project is to be spited into Front end, middle tier business rules and DAO layer. Base unit is to be decided for all future activities screen or class. Generally screen based design is simple. All communication to be based on base unit. Framework is to be decided like struts and hibernate. List of common classes is to be prepared.
List of other classes is to be prepared. Page 16 of 21 Output of design document is list of the screens, list of the classes, and list of tables. Primary and secondary keys of each table are to be reviewed. Subsequently it is to be approved by client. Never ever store the credit card number in DB i. There are few products which belong to more than one category. We need to handle categorization of the products appropriately. Low level design: a. There are two types of specification format.
Type 1 is pseudo code where all technical information like class, variable, parameters, their relationship, validations, business rules, etc is captured and type 2 is functional document for base unit where all business rules are captured in detail. Type 2 is generally preferred by developers. Review of specifications is to be conducted by two levels, a. Development a. If feasible important and complex screens to be taken for development prior to other screen development by forming a technical task team TTT.
TTT understands the issues much in advance than other team members. TTT learning to be shared with all team members d. Configuration management to be implemented and back up mechanism of configuration server to be implemented e.
Team is to be formed either as per module wise or tier wise based on the nature of the project. Reviews by self, Peer to peer and by PL to be planned and conducted. Unit testing to be conducted i. Review comments and defects to be uploaded in defect tracking system Testing: a.
White box testing and retrieval of data queries testing to be conducted c. For testing payment systems, either dummy server to be installed or separate dummy account to be operated with the help of third party payment system. Payments, delivery, various status order, shipped, delivered, payment are extremely important checks and to be verified by seniors. Currency conversion is most critical functionality Performance: It is most important points and needs to be taken care right from RA phase a.
Defining and agreeing with client the performance criteria b. Performance testing to be planned and to be conducted Page 17 of 21 Queries to be validated on edit-pad of database checking how much time it takes. Do nor try to create the same objects retrieved data in sub queries. One might need to shift the code from middle tier to stored procedure. Screen design and layout- a. Site navigation should be simple. We need to design user friendly and efficient screen flow. User wants quickly important and as much information.
Ensure that images are optimized for rapid download. Check if product is ready to sell or customizable. Screen flow differs in both the cases. Cart creation and retrieval are to be handled with at most care. It should give user friendly feel while navigation, and not of irritation.
Price should change after changing the quantity of the item and press of tab immediately. Visit of server becomes necessity f. Other related links to be given for reference just to next location. Important information like availability of stock, other products of nearest matching specification is to be readily given. Sales text must be grammatically sound and spelt correctly. Poor spelling loses credibility points straight away. Efficient integration of search engines at appropriate screens is important.
Ensure that there is plenty of well laid out textual content on the site to attract search engines as well as to inform prospective clients. Use keyword and key phrase rich text; that is, utilize copy that includes common phrases that people would enter into search engines when performing a query. Wish list like feature is very popular. A feature like live online chat with customer support is becoming popular and also can be integrated.
Sessions to be killed if secured web page is open without any action for more than stipulated time n. Copy and paste of url to other PC should not be working o. Check the IP address: It's important that each order processed from site also contains information regarding the IP address of the person placing the order. We need to understand type of payment requested by client.
In Japan they are generally: a. Credit card b. Mobile edy c. EZ and d. Cash on delivery. In each case we need to understand the flow clearly and accordingly interface t be developed. There are good specification documents available for each payment method. Page 18 of 21 To define few screens ssl layer https in consultation with client.
During these web pages, transmission of information b. Get the documents of each payment gateway system specification c. Understand login and authentication parameters, encryption and decryption of the parameter and at which point of transaction is to be processed. Build the code in line with above e. Multi currency site is a bit complicated unless payments are handled by third party. While utilizing payment gateways for credit card transactions, it is important to ask the gateway provider about their screening features this precedes actual credit card payment processing.
However transaction should not be approved when AVS fails. A CVV2 number is the three last digits located on the back of a credit card, or the four stand-alone digits on the front of an Amex card. There will be screens where registered and non registered users can access. There will be few screens where authentication of the users would be required or users need to be paid user.
Generally single sign-off is to be avoided if client agrees. Deployment: a. Deployment diagram is to be prepared. There is absolute necessity of redundancy for DB and application servers. Set of development server and live servers to be kept. Logs are to be maintained for all copy events. Watch the traffic continuously. There are lots of free tools available. We need to conclude peak hours of the visits. Back up process to be defined and followed for every day.
Incremental and complete back up methodology f. Use a standard merchant account. This small investment states that a bank has reviewed your credit history and found you a good candidate for above board transactions giving your buyer confidence to complete the purchase. Make sure your purchases are funneled through a secure payment gateway.
A secure gateway collects credit card data safely and prevents hackers from intercepting the information over the Internet. Provide good photographs and enlargements. In the absence of touching the product, buyers want to see excellent representations of what they are buying. Page 19 of 21 Invest in the aesthetics of the website. Beautiful websites with great products will sell more than unattractive sites with the same products.
First impressions are the most lasting, and on the web it is extremely important to impress visitors instantly to hold their attention. Avoid a database to display products. Dynamically generated pages --those created from a database--simply don't have the permanence that static or infrequently changing pages do. Therefore, they generally perform worse on search engines. How do you tell if a database is used? Dynamic pages normally show the domain name, with an appended string that uses a question mark and categories paired with product names or ID values using an equal sign.
Use static pages to display products for increased search engine performance. Software such as ThunderCart, a plugin for our editable websites, allows for very easy administration for the non tech savvy sellers. The intuitive interface allows you to easily upload products, descriptions, and pricing.
We created the plugin to improve search performance for online catalogs. Invest in search engine optimization or SEO. SEO concentrates on reaching the top pages of search listings for buyers looking for your products. It is not enough to be found by your business' name; some buyers will have no idea you exist. You need to be found for those who are interested in your products or services. Provide an online form to allow your customers to provide you with information you need in order to help them.
The more information you collect on an individual, the better prepared you will be when you respond. In addition, contact forms allow potential customers to request additional information at any hour of the day. One note: do try to make forms comprehensive but not cumbersome.
If you receive a contact form, follow up! This simple instruction is extremely important and one that many website owners tend to neglect. The faster your response time, the greater the chance you will have to make the sale.
Generally to avoid using green and orange colors. Each page layout shall be consistent. Selection of the images shall be done very critical.
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Abstract Trends show promising growth of the online e-Commerce industry. While the e-Commerce companies are aggressively moving towards digital sales and marketing, the customers are being bombarded with frequent and often irrelevant marketing communication from myriad sources. The thesis proposes understanding the digital purchase journeys of the customers from the lenses of both sellers and customers to make online sales and marketing efforts relevant and intelligent.
The thesis applies the improved customer journey framework to identify the needs of the customers and goals of the seller at various stages of customer purchase journey. It discusses the need to take an integrated view of the purchase journey to improve the customer experience at the journey level.
It illustrates with an example how to design end-to-end journeys - a starting point for consciously shaping the purchase journeys. Larger companies are using Machine Learning to improve marketing technologies and processes to create a competitive advantage and capture market share through digital presence. The thesis aims to understand and illustrate the applications of Machine Learning to digital sales and marketing ecosystem for the e- Commerce industry.
It first understands the e-Commerce touchpoints using which customers interact with the brands and delves deeper into the underlying technologies powering these touchpoints. Then it illustrates and analyzes the application of Machine Learning to the e-Commerce website which includes search, recommendation system, and Product Detail Page with an aim to improve conversion, and to the advertising ecosystem which includes Data Management Platform and Demand Side Platform in order to enable prospecting and customer targeting.
The thesis also illustrates and proposes the use of a framework called 'Machine Learning Canvas' to systematically apply Machine Learning to any system while keeping value proposition for the business in the center. Description Thesis: S. Date issued Department Massachusetts Institute of Technology.