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E-Commerce in Ghana: Sailing or Failing

Looking through my wardrobe this morning for what to wear to work, I realized that I didn’t have enough shirts. Long sleeved shirts in particular. Instantly, like the way my brain works, I had to find a solution. I had options; go to a boutique to buy an over-priced shirt, go to Kantamanto to find a high-end store-reject or faux shirt or shop locally online. I had to choose between convenience and making the right selection. The day is almost over and I haven’t done any of these. I have been behind a PC with internet all day. I still need some shirts (mind you, this isn’t a piece about procrastination).

We can’t deny, the recent emergence of many internet-based companies in Ghana (and Africa) has a lot to do with the growing internet penetration on the continent. Internet users in Africa rose from 2% in 2005 to 19% in 2014. E-Commerce is bidding to take center stage on a continent where trading has been the go-to business for thousands of years. In Ghana, 18.9% of the population have internet access but it raises so many questions. How likely are the online population to adopt the e-commerce culture? Are these figures heavily skewed by Facebook and WhatsApp? Are e-commerce platforms taking advantage of these figures?

As a seller myself, I have the option to sell on e-commerce websites like Tisu (established in Ghana in 2011), Tonaton, Jumia Market (formerly Kaymu), Jumia and StoreFoundry or classified websites like OLX. All these websites have different modes of operations with their own pros and cons. My choice of website boils down to what will bring me the most money regardless of page views, conversion rates etc. But operators of e-commerce websites care about these things. Inevitably, every website wants traffic first, which is a major selling point. Next, they want that traffic to convert to sales (orders) and then the money can roll in. Strategies to increase page views and conversion rates among others are employed while doing their best to reduce the bounce rates. Would I want to create my own website (have a store in front of my house) or sell on a popular website (a store in a mall)? I’ll rather sell on a popular platform so it’s not surprising e-commerce platforms focus on what they focus on.

Buyers look at e-commerce websites as just another option. A means to an end. Now in looking for that shirt that I need, with my budget of 30ghc to 60ghc for 1, I’m most likely going to go to Kantamanto for 2 reasons; the option to try that shirt on for the perfect fit & the number of options I have available to make a bargain for. I could use 2 minutes to make a choice online but am I ready to wait for a possible 5 to 10 days to receive a shirt that might not fit perfectly or not hear from the platform/seller at all? Don’t get me wrong, not all e-commerce websites are ‘poor’. I’ve had items (not shirts) delivered to me a day after ordering and it was perfect. I have to be able to trust that what I see is what I’ll get. Buyers need to trust to buy. So until e-commerce platforms can create or maintain trust, buyers’ culture of taking time off their busy schedule to go out and look for items won’t change. In areas like Madina, there’s a shop every 50 to 100 meters that sell items ranging from clothes to TVs. This is no hyperbole. So until I can trust what’s online and appreciate the service, I will take that walk and cop that watch. Furthermore, it’s common knowledge that most e-commerce platforms charge commissions or add their percentages in order to make something small from sellers’ sales online. This means it’s possible to get the items for cheaper somewhere (Shhhhh! Don’t tell anyone).

One challenge most e-commerce websites face is deliveries. A lot of logistics companies are springing up to support the growth of e-commerce. I mean, who wouldn’t set up a logistics company to meet this high demand for convenience to make some more money. However, in Ghana stating and giving directions are not the best. If the orange seller isn’t at that junction, the delivery rider will probably miss it. One delivery may involve multiple calls between buyers and sellers before the transaction is complete. Once again, it’s not a bad thing. It’s working.

Ghana has been blessed with smart people. People who have what it takes to take the country to the next level. Some of which have set up wonderful e-payment platforms like Express Pay, Slyde Pay and Mazzuma. This, coupled with the increasingly popular mobile money payment methods being employed by our top Telco’s provide buyers and sellers easy ways to make secure transactions while shopping online. Cash-on-delivery however is the most used mode of payment in our e-commerce ecosystem. Buyers prefer this. They want to see what they’re buying before they pay. The few who prepay are mostly from other regions. Because without payment, their items may never reach their locations. Imagine sending an item to Bawku just to have a buyer reject it.

Over the years, what I’ve learnt is that most of the processes involved from a buyer placing an order to the buyer receiving it are cumbersome. I’ve also learnt that most people in e-commerce think that long processes are necessary for better tracking and record keeping. Processes that inevitably give old buyers bad experiences and new buyers’ reasons not to come back. Some websites are feared for fraudulent sellers, others are avoided because of bad pricing while a few are still trying to make customers happy.

Being profitable should be the main aim of every business. If an e-commerce company can make enough money from order volumes and the sale of ad spaces on websites to sustain the business daily while paying their staff, way to go! Obvious isn’t it? But you’ll be surprised to know it’s not always the case. Most platforms are struggling to make enough money to cover costs. A lot are still in the trial-and-error phase. To be honest, it’s not a major concern. Amazon, until recently, though revenue figures kept rising, have had net profits at the same level for over a decade.

The Ghanaian consumer is hard to please but easy to keep once pleasing is done the right way. Once a brand gets me, I’ll make sure my friends and family join the brand-wagon. The market is there for the taking. Internet penetration figures and estimates in Ghana means there’s big potential. People are online. There’s no Ghanaian based e-commerce website in the top 20 visited sites in Ghana but Facebook is a great tool for businesses to take advantage of. The market is there for the taking. The future looks bright. But there’s no bright without right.