More Local Businesses Launch Websites

More Nigerian Small And Medium Businesses Launch Websites

Growing Evidence That More SMEs Are Seeing The Value Of Online Presence

One sore index of our 'arrested' national development - prize for past years of military misrule, some would argue - is the backward state of the country's technological base. In this context, information and communications technology (ICT), which has proved a powerful driving force for economic development across the globe, is yet to gain space and bring any profound impact. Granted that banks and some other companies have deployed a significant level of ICT support to drive their services, it's still clear that the kind of pervasive application of technology across sectors of the economy, which can unleash a heightened economic momentum, is still not there.

As it is, the small and medium enterprises sector is the worst hit. Part of the problem is with affordability of relevant technology - many can't meet the cost of the all-imported IT equipment and applications. Another is the challenge of knowledge - not many know what tools are available and what benefits they stand to gain. So, while India, for instance, is having a boom in the use and export of ICT products, we lag painfully behind. Today, even the internet that is largely a free resource, with all its acclaimed commercial and other benefits, remains for many businesses a foreign concept that they are slow to embrace. The loss is to our economy, which has failed to benefit from the huge (projected 2006 online retail spending: $95 billion - Forrester Research) global online economy. Big pity, because the internet is perhaps the only vehicle that readily accepts each person or business as a free member of one global family and market.

It is against this background that we applaud the noticeable, though still insignificant, growth in online presence for Nigerian companies and institutions, especially small and medium businesses, our main focus. Information from ISPs shows a fast-growing pace of domain registrations and hosting of websites. Clearly, the message is penetrating, albeit slowly, that the internet has something great to offer and should not be ignored.

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Further analysed, most 'local' sites today would be categorised as what is at times referred to as 'online brochure' or 'information website', designed to provide general corporate information: who you are, what you do, where to find you, and how to contact you. This is still of great value, except that many are not packaged to pull in the audience that will access those information. Perhaps with time, many of these site owners will have the opportunity to access improved design and promotion techniques that will enable their sites really achieve the purpose and value they were developed for.

A few other sites have zoomed forward to implement full e-commerce storefronts, actually selling online. This is the way of the future and it is gratifying that Nigerian card companies are providing e-payment debit cards to facilitate online transactions. Interswitch's debit cards are presently accepted at a number of these sites and, from all indications, this has worked satisfactorily.

The issue now is for more Nigerians and Nigerian businesses to realise the impact online retail alone is making to global commerce. Let's give an insight by quoting copiously from an article, "E-Retailing: The 25% Growth Phenomenon" by Jack Love, published February 2006 by Internetretailer.com. Hear this:

"When our publishing team started this magazine seven years ago, we were encouraged by the growth of the e-retailing market, which was growing at the time at 30% per year-five times the growth of retailing overall. We felt certain the growth of online sales would continue exceeding the growth of store sales, but we assumed that growth rates for Internet retailing would slow as its base grew larger.

We were right on the first part but dead wrong on the second. In fact, Internet retailing has consistently achieved growth rates of 25% to 30%. While the definitive numbers for 2005 are not yet tabulated, analysts believe that thanks to another blistering holiday shopping season online, e-retailing last year again achieved its historic growth rate. ComScore Networks calculates a 24% growth rate for e-retailing in 2005 and Nielsen/NetRatings estimates 30%. Once again e-retailing grew at least five times faster than store retailing."

This is definitely instructive and clearly shows that more attention needs to be paid by local businesses to e-commerce. Granted that there are difficulties, we think the logical step is to confront these problems and either find a way around them or somehow survive with them. What is at stake in e-commerce would seem too huge to be sacrificed, even on the alter of infrastructural or other domestic challenges. It's also good to note that technology-driven changes have met with initial reluctance in other societies, including the USA, but when user benefits are unquestionable, it only takes some time for customer acceptance to build up. That article gives further insight:

"Experience with related technologies offers some clues. Our publishing group has been covering online customer service net-works for 24 years, beginning with our first publication, Bank Network News, which was launched in early 1982 to cover the ATM networks which at the time were just beginning to connect the automated teller systems of one bank with those of other banks so that depositors had broader access to ATMs.

The more I follow online retailing, the more I see similarities with the development of now ubiquitous ATMs. When we started BNN, the ATM market was early into its second decade-just about where online retailing is today. The country had about 12,000 ATMs online then, but only about a third of depositors used them. The rest were still devoted to weekly trips to the bank to stock up on cash, and plenty of supermarkets still cashed checks for regular customers with no purchase required. How quaint that seems today.

Most consumers back then avoided using ATMs for fear it would jeopardize the security of their deposits. Others did not trust the machines to accurately dispense cash and for the bank to properly record the transaction. Even though the ATM transaction was free (talk about quaint!), most consumers had grown comfortable with cashing checks for cash and did not rush to adopt the newer and more convenient technology.

But as more ATMs appeared in more convenient locations and were connected into national and global networks and as more consumers began relating their successful ATM experiences, the barriers to broad usage of the technology began breaking down. Add to that the cultural changes wrought by the development of the two-income household-and the disappearance of the housewife who picks up cash during banker's hours-and you got an ATM explosion. Today, there are 400,000 ATMs in the U.S. and we are so dependent on them that we have grown accustomed to paying $1.50 for the privilege to use them. And many depositors go for months-even years-without stepping inside a bank".

This sounds so much like the Nigerian experience with ATMs at this moment: still limited deployment by financial institutions and initial customer reluctance with growing signs of increase in usage. Relating the USA experience with ATMs to the current e-retailing trend, the author concluded by drawing an inference:

"What's the ATM lesson? I think it means that over time customer fears about a new technology disappear as that technology demonstrates reliability, that the demand for convenience is the most powerful motivator for the American consumer, that consumer lifestyle changes-and not the traditions or desires of traditional service providers-ultimately dictate the direction of consumer markets and that technologies that involve fundamental cultural changes often experience their greatest growth in their second, third or fourth decade, not their first. E-retailing may be headed in the direction of the ATM-and its 25% growth rates may not be over".

Again the message is simple: the potentials of e-commerce are too powerful to be ignored for too long by businesses that desire to grow their customer base and sales revenue. It's too important, too, not to attract the deliberate effort of the government to strengthen the needed infrastructure, given the urgent need to grow the economy and create jobs for the teeming mass of our unemployed citizens.

Copyright © 2006. Acceler8now.com. All rights reserved.

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