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THE EFFECT OF MOBILE PHONE ON THE GROWTH OF E-COMMERCE IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

E-commerce is the use of the internet for marketing, identification, payment and delivery of goods and services. Through the e-commerce technology, the internet has revolutionized the mode of business transactions by providing customers with the ability to bank, invest, purchase, distribute, communicate, explore and research from virtually anywhere, anytime where there is internet access (Anup, 1997; Ayo, Adewoye & Oni, 2011). Economics offers a level playing ground for large businesses, as well as small and medium-scale enterprises (SMEs) to operate in the global marketplace, and for regional businesses and communities to participate in social, economic and cultural networks seamlessly across international boundaries (Mary-Anne, 1988). However, with the paradigm shift in the mode of operation occasioned by the advent of the internet, global corporations now operate with much consistency and at reduced cost of transactions as if the entire world were a single entity. In Nigeria, the internet business is taking on a serious dimension in the country especially within the more commercial states of the nation.

A lot of start-ups are springing up within the cyber space and each one is targeting the over 40 million internet users in the country. At present, Jumia and Konga are the ‘Beasts’ of e-commerce in Nigeria (Babatunde, 2013). In the business-to-business world, buyers previously faced a number of obstacles to getting the best deal: suppliers were distant, research time was scarce, and intermediaries controlled most of the information. Presently, Web-based companies are becoming the new intermediaries, the conduit between producers and buyers. The benefits of e-commerce include customer loyalty, the speed of access, reduced costs of operation, transformation of traditional market chain, acquisition of a niche market, business efficiency, increased automation of process, retained and expanded customer base, enhancing well-being and education of customers. However, the growth of e-commerce in Nigeria is affected by accessibility, privacy and confidentiality, establishing cost, data security, network reliability, credit card threat, citizens’ income and education, authenticity, cyber crime, poor technological infrastructures and fear of inadequate security in online environments (Ayo, 2011). This study therefore aims at two major objectives, first to examine to benefits of e-commerce in Nigeria and second its challenges. Also, the study recommends among others the need for adequate publicity on e-commerce with emphasis on e-shopping, e-banking and e-business.

1.2 STATEMENT OF THE PROBLEM

Despite the increasing penetration of mobile phones in Nigeria, there remains a gap in understanding the specific impact of mobile technology on the growth and development of e-commerce within the country. While mobile phones offer potential avenues for expanding access to e-commerce platforms, facilitating transactions, and enhancing market reach, there is limited empirical evidence on how mobile usage patterns, technological infrastructure, and consumer behavior intersect to influence the e-commerce landscape. This study aims to address this gap by investigating the extent to which mobile phone usage contributes to the expansion and sustainability of e-commerce in Nigeria, identifying barriers and opportunities, and providing insights for policymakers, businesses, and stakeholders to optimize the integration of mobile technology into e-commerce strategies.

1.3 OBJECTIVES OF THE STUDY

The main objective of this study is to determine the effect of mobile phone on the growth of e-commerce in Nigeria

Specific objectives include;

1. To examine the role of mobile phone usage in facilitating access to e-commerce platforms in Nigeria.

2. To assess the impact of mobile technology on consumer behavior and purchasing patterns in the Nigerian e-commerce market.

3. To explore the challenges and opportunities associated with integrating mobile phones into e-commerce strategies for businesses in Nigeria.

1.4 RESEARCH QUESTIONS

1. How does mobile phone usage contribute to the adoption and utilization of e-commerce platforms among Nigerian consumers?

2. What are the key factors influencing consumer behavior and purchasing decisions in the context of mobile-driven e-commerce transactions in Nigeria?

3. What are the main challenges faced by businesses in Nigeria when integrating mobile technology into their e-commerce strategies, and what opportunities does mobile e-commerce present for growth and expansion?

1.5 RESEARCH HYPOTHESES

1. H1: Increased access to mobile phones leads to higher rates of e-commerce platform adoption among Nigerian consumers.

2. H2: Mobile-driven e-commerce transactions in Nigeria are positively correlated with convenience, accessibility, and personalized shopping experiences.

3. H3: Businesses that effectively leverage mobile technology in their e-commerce strategies will experience higher levels of sales, customer engagement, and market competitiveness compared to those that do not.

1.6 SIGNIFICANCE OF THE STUDY

The significance of the study lies in its potential contributions to both academia and industry within the context of e-commerce development in Nigeria. Firstly, the study addresses a significant gap in the literature by providing empirical insights into the specific impact of mobile phone usage on the growth and sustainability of e-commerce in the Nigerian market. Understanding this relationship is crucial for policymakers, businesses, and stakeholders seeking to harness the potential of mobile technology for economic development and digital inclusion.

Secondly, the findings of the study can inform strategic decision-making for businesses operating in the Nigerian e-commerce landscape. By identifying key factors influencing consumer behavior, purchasing patterns, and the integration of mobile technology into e-commerce strategies, businesses can optimize their operations, enhance customer engagement, and capitalize on emerging market trends.

Moreover, the study contributes to broader discussions surrounding technology adoption, digital transformation, and economic growth in Nigeria and similar emerging markets. By shedding light on the challenges and opportunities associated with mobile-driven e-commerce, the research provides valuable insights for policymakers and industry practitioners seeking to foster innovation, entrepreneurship, and sustainable development in the digital economy.

Overall, the significance of the study extends beyond academic research to practical implications for business strategy, policy formulation, and economic development in Nigeria and other regions undergoing rapid technological change and digital transformation.

1.7 SCOPE OF THE STUDY

The scope of the study encompasses several key dimensions within the context of mobile-driven e-commerce in Nigeria:

1. Geographic Scope: The study focuses specifically on the Nigerian market, considering variations in mobile phone usage, e-commerce infrastructure, and consumer behavior across different regions and urban-rural divides within the country.

2. Technological Scope: The study examines the impact of various mobile technologies, including smartphones, feature phones, and mobile applications, on e-commerce adoption, usage patterns, and transactional behavior among Nigerian consumers.

3. Market Scope: The study explores the e-commerce landscape in Nigeria, encompassing diverse sectors such as retail, banking, logistics, and telecommunications. It considers both business-to-consumer (B2C) and business-to-business (B2B) e-commerce models, as well as emerging trends such as mobile payments, m-commerce, and digital marketplaces.

4. Consumer Scope: The study investigates the attitudes, preferences, and behaviors of Nigerian consumers towards mobile-driven e-commerce, considering factors such as demographics, socio-economic status, digital literacy, and cultural influences.

5. Business Scope: The study assesses the strategies, challenges, and opportunities faced by businesses operating in the Nigerian e-commerce sector, with a focus on the integration of mobile technology into marketing, sales, and customer engagement initiatives.

6. Policy Scope: The study examines the regulatory environment, policy frameworks, and government initiatives shaping the development of mobile-driven e-commerce in Nigeria, including issues related to consumer protection, data privacy, cybersecurity, and digital infrastructure development.

1.8 LIMITATIONS OF THE STUDY

The limitations of the study include potential challenges in generalizing findings beyond the Nigerian context due to variations in e-commerce infrastructure and consumer behavior across different countries. Additionally, the study may face limitations in accessing comprehensive and up-to-date data on mobile phone usage, e-commerce transactions, and business operations in Nigeria, which could impact the depth and accuracy of the analysis. Furthermore, the study's reliance on self-reported data and survey methodologies may introduce biases or limitations in capturing the full range of factors influencing mobile-driven e-commerce dynamics in the Nigerian market.

1.9 DEFINITION OF TERMS

1. E-commerce: The buying and selling of goods and services conducted electronically over the internet or other digital platforms, encompassing activities such as online shopping, electronic payments, and digital marketing.

2. Mobile phone usage: The extent to which individuals utilize mobile devices, such as smart phones or feature phones, for communication, internet access, and various applications, including accessing e-commerce platforms and conducting transactions.

3. Consumer behavior: The actions and decision-making processes of individuals or groups when purchasing and using products or services, including factors such as preferences, motivations, perceptions, and attitudes towards e-commerce activities.

4. Business strategy: A plan of action designed to achieve specific goals or objectives within a business context, including decisions related to product development, marketing, distribution, pricing, and customer engagement in the e-commerce sector. 

5. Digital inclusion: The process of ensuring that all individuals and communities, regardless of socio-economic status or geographical location, have access to and benefit from digital technologies and online services, including participation in e-commerce activities.

6. Market trends: Patterns or shifts in consumer behavior, technology adoption, regulatory frameworks, and competitive dynamics that influence the development and evolution of the e-commerce market in Nigeria, including emerging opportunities and challenges for businesses and stakeholders.

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