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ABSTRACT
The study was carried out to examine the strategies adopted by E-commerce companies to ensure market penetration and sales promotion. Jumia and Konga e-commerce companies were considered in the research. The researcher used descriptive type of research and literature was reviewed to know what other actors and practitioners have done in relation to the topic. The population of staff from different fulfilment centres and customers were selected. In selecting sample size, simple random sampling formula was employed. The simple random sampling method was used to select the sample size. Data collected was presented using tabulation, simple percentage was used to analyse the data collected while chi square (x2) was used to test the statement of hypotheses. The researcher found out that the success and any e-commerce venture depends on the strategies adopted to ensure adequate market penetration and sales promotion. Therefore E-commerce companies should realise that consumers are becoming hitech savvy as a result utilize various platforms to compare products and make informed purchase decision. Therefore, adopting the right attention catching strategy is critical for the success of any e-commerce business.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF STUDY
E-Commerce is nothing new. It’s just a 500-year-old service repackaged: the latest way to sell goods and services. Recall back to the days when merchants had to pack their goods on carts pulled by horses or donkeys and travelled to their customers to show off their offerings.
Internet can be the modern day cart — except that you will not have to travel anywhere and customers can buy from you at any time. Today’s “Internet cart” is much more powerful. Every day it presents millions of goods and services to tens of millions of customers — anywhere, anytime. A shop owner can be fast asleep and still sell online by allowing his customers to add goods to their shopping carts.
Electronics Commerce is a methodology of modern business which addresses the need of business organizations, vendors and customers to reduce cost and improve the quality of goods and services while increasing the speed of delivery. E-commerce refers to paperless exchange of business information using following ways.
According to the online researcher and e-marketer, while e-commerce across the rest of the world is growing at 16.8 per cent, Africa’s e-commerce space is growing at a rate of 25.8 per cent, making it the fastest growing in the world. By 2017 e-Marketer estimates that there will be $440 billion in sales for a compound annual growth rate (CAGR) of 13.8 percent. The question is how small businesses can capture their share of the e-commerce explosion.
Today, Nigeria is witnessing an impressive growth within the e-commerce space, with pioneers such as Konga and Jumia. This has expanded the market for Visa/MasterCard, while providing a real time platform that connects wholesale and retailers without the hurdle of space and time.
New study by Terragon Group released for the second quarter of 2014, has revealed tremendous growth in the state of digital media and users’ online behavior in Nigeria over the past twelve months. Interesting to note were the insights presented for e-commerce which showed that there had been a 15 per cent increase in users’ purchases online from results in 2013.
By end of June 2014, 63 per cent of Nigerian internet users had bought at least one item online. 60 per cent of these buyers claimed to have used their mobile phones for these purchases.
Considered to have influenced this increase in e-commerce activities, are increase in internet penetration through mobile, increase in data bundle purchases and online activities such as search, social media interaction, downloads and emails, within the period.
Big internet companies like, Jumia, Konga, Dealdey, Irokotv, Jobberman, and a few others might be setting the pace for internet business in Nigeria. In the last 7 months, Jumia has grown from a company of 15 employees to over 200 and there is still room to grow more over the years. While for Konga, it grew from 10 to 70 in less than 4 months.
The question is what strategies have these big players adopted to ensure rapid development within Nigeria e-commerce landscape.Accordingto report by Forbes on 12 e-commerce strategies that helps grow business dated January 2014 written by Michael Evans; typical strategies for effective e-commerce that should be considered includes;
Micro-Target an Online Audience
Personalize
Create Content to Build Stickiness
Tailor the Browsing Experience to Target Segments
Integrate Across Channels
Invest in Mobile
Bypass the Middlemen
Offer a Seamless Experience Across Channels
Sell Internet-Only Merchandise
Using Social Media
Shopping Cart Analysis
Using Video
Free shipping
Onsite product reviews
Updates.
In order to be successful in the highly competitive retail industry, it’s imperative that independent retailers adopt some of the successful strategies utilized by top tier ecommerce sites like Amazon, Jumia or Konga.
1.2 STATEMENT OF THE PROBLEM
The advent of e-commerce has no doubt created enormous opportunities; however new entrants into e-commerce are faced with tremendous problem of understanding adequate strategies to be adopted to ensure success.
These problems include:
What are the best strategies to adopt for new entrants?
How effective are the various strategies?
How to source item at competitive price to beat bricks morter shops?
How to handle security challenges associated with online payment?
How do e-commerce companies determine future profitability?
What are the best websites or application available in the market?
1.3 OBJECTIVES OF THE STUDY:
The study examines the effective e-commerce sales strategies of Jumia and Konga.
The specific objectives of the study includes:
- Identify the role of e-commerce in today’s economy.
- Identify the various model of e-commerce.
III. Identify the benefits of e-commerce.
- Identify various strategies adopted by Jumia and Konga for effective order management.
- Identify the most effective e-commerce strategies that can be adopted by new comers.
- Identify some key features in a typical e-commerce website.
1.4 SIGNIFICANCE OF THE STUDY.
The research work, effective e-commerce strategies would be a guide to e-commerce entrepreneur or organization that wants to sell its product and services online. The understanding and application of this concept and principles will enhance organizations operation. It would also serve as a guide and source of secondary data for students and practitioners in the field and related ones.
To the researcher, in fulfilment of the course requirement for the award of Higher National Diploma (HND) in Ken Saro-Wiwa Polytechnic, Bori. In addition, the work has exposed the researcher to research processes source of information, analytical work and opportunities to meet new person (sample members).
1.5 RESEARCH QUESTIONS
- What role does e-commerce play in today’s economy?
- What are the various model of e-commerce?
III. What are the benefits of e-commerce?
- What strategies were adopted by Jumia and Konga for effective e-commerce service delivery?
- What strategies can new entrants into e-commerce adopt?
- What key features are typical in e-commerce website?
VII. Do e-commerce strategies improve sales and encourage customer satisfaction?
VIII. What are the problems associated with e-commerce in Nigeria?
- What intervention measures has government used to improve e-commerce in Nigeria?
1.6 RESEARCH HYPOTHESES
The stated hypotheses are;
H0: Effective e-commerce strategy does not result to increased sales.
H0: Well-designed e-commerce website does not promote sales.
H0: Appropriate e-commerce strategy does not promote the product.
1.7 SCOPE OF THE STUDY
The research work is centred on Jumia and Konga e-commerce in Nigeria with emphasis on its Port Harcourt customers.
The study embraces consumer behaviour as a result of different strategies adopted by these companies. The extent of the study is on the various strategies adopted to ensure customer confidence on online purchase as well as various promotional strategies adopted.
1.8 LIMITATIONS OF THE STUDY
In course of executing the research work, the researcher was confronted with many problems and constraints: below are some of the factors that delayed the progress and early completion of this work.
Time: This work would have been better than what it is if enough time was given to travel to different states and companies for collection of data.
Transportation: Due to high cost of transportation fares caused by bad road, fuel scarcity, it was not possible to travel to different part of the country to collect more data.
Lack of materials and funds: The unavailability of funds and up-to-date textbooks, journals etc. libraries and in accessibility of the internet to the common man also hampered the progress of this work.
Illiteracy: Due to varying level of education, some respondent were not able to adequately complete the questionnaire.
The management of Jumia and Konga could not release some essential information vital to the study due to sensitivity and confidentiality.
1.9 DEFINITION OF TERMS
Shopping Cart: A piece of e-commerce software on a web server that allows visitors to an Internet site to select items for eventual purchase
VISA/MasterCard: Worldwide credit card Corporation that works with financial institutions to issue credit cards.
Internet: A global computer network providing a variety of information and communication facilities, consisting of interconnected networks using standardized communication protocols.
Jumia/ Konga : An e-commerce company
Website-Location connected to the Internet that maintains one or more web pages.