Addison Goro
Electronic commerce, defined as the process of buying, selling, or exchanging products, services, and information over the Internet, has become a key aspect of modern business. Initially, electronic commerce was characterized by the use of Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT) in the 1970s. Credit cards, ATMs, and telephone banking became widespread in the 1980s, and the Internet boom of the late 1990s and early 2000s transformed the way businesses and consumers transact online.
The e-commerce landscape has evolved significantly in Ghana. However, the sector still faces challenges including poor website design, limited browser compatibility, inadequate customer service, security concerns and an underdeveloped communications infrastructure. These issues hinder the widespread adoption of e-commerce despite its potential benefits.
A recent survey of 100 Ghanaians (58 men and 42 women) provided insights into current e-commerce trends and awareness. Findings revealed that e-commerce usage is dominated by the younger demographic, with 78% of users aged between 20 and 45 years, and only 18% above 45 years. There was a significant correlation between length of banking experience and awareness of e-commerce, with 72% of respondents having been bank customers for 6 to 10 years, and most of them being familiar with e-commerce. In contrast, only 10% of respondents who had been banking for 3 years or less were aware of e-commerce.
Banks and mass media are the main sources of e-commerce awareness, followed by referrals from friends and shopping malls. Among those familiar with e-commerce, 82% use at least one bank or payment card, highlighting the link between card usage and e-commerce awareness. However, only 42% have used a card for online purchases, and 22% do so regularly. Nevertheless, 78% of respondents who have never used a card for online purchases expressed a desire to do so in the future.
Popular online purchases include groceries, bill payments, airline tickets, subscriptions, etc. Respondents view online shopping favorably, with 91% approving of online shopping and recognizing its benefits to the Ghanaian economy. Respondents stressed the need for government and financial institutions to promote e-commerce through supportive policies and infrastructure development.
Recent trends highlight the transformative impact that mobile money services are having on e-commerce in Ghana. Characterized by accessibility, convenience and security, mobile money has significantly improved the e-commerce landscape. Mobile money has closed the financial inclusion gap, enabling previously underserved populations to participate in the digital economy. The widespread adoption of mobile money services, driven by partnerships with e-commerce platforms, has streamlined the payment process and improved the overall shopping experience.
The integration of mobile money with e-commerce is increasing usage and adoption. Promotional incentives and discounts offered by mobile money providers further motivate users to adopt mobile payments for online purchases. Additionally, new payment methods such as QR codes, contactless payments, and digital wallets are becoming more prevalent, offering consumers more choices and enhancing the convenience of online transactions.
Despite these advancements, challenges remain. Security concerns, especially those related to fraud and data privacy, need to be addressed to build trust among users. Improving the quality of e-commerce websites and enhancing customer service options are also key to a fulfilling online shopping experience. Additionally, investments in communications infrastructure are needed to meet the growing demand for reliable Internet connections.
Ghana's e-commerce potential is enormous. By addressing existing challenges and leveraging technological advances, Ghana can position itself as a leader in the African e-commerce market. Collaboration between government, financial institutions, and private sector players is essential to create an enabling environment for e-commerce growth. This includes implementing supportive policies, investing in infrastructure, and promoting digital literacy among the population.
Looking ahead, we expect further growth in e-commerce to come from the continued expansion of mobile money services and adoption of new payment methods. As technology evolves, mobile money will remain the foundation of the e-commerce ecosystem, driving innovation and inclusion in the digital age. Harnessing the potential of e-commerce will position Ghana to achieve sustainable economic growth and participate more actively in the global digital economy.
The author is a digital payments and fintech consultant. His areas of interest include using predictive modelling for bank stress testing, payments risk and compliance, AI, NLP, LLM and data storytelling.
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