Pitfalls and solution e-commerce Cameroon/Sub-Sahara Africa
Cameroon e-commerce industry might be lagging behind most North African and a sub-Saharan country such as Kenya, Ghana and Nigeria but it is growing very fast and will eventually catch-up with other nations. This represents a great opportunity for entrepreneurs and foreign companies to invest now.
Several local and foreign companies are already expanding their e-commerce activities in Cameroon. There are great opportunities in Cameroon for these companies though these new entrants will be faced with intense competition; the major problem will be local challenges.
For those companies looking forward to establish an e-commerce business in Cameroon or Sub-Sahara Africa, we have put together a list of 9 major pitfalls and solutions.
Some of the major challenges faced by e-commerce companies in Cameroon
- Competition: there are several companies struggling to establish a viable e-commerce business in Cameroon. You can find a bunch of Amazon, Alibaba and EBay look-alike struggling to make a breakthrough. Though bigger foreign companies have also started to make an entrance, according to our analysis there is still no major player. The Cameroon e-commerce sector is still in its early stages leaving enough room for growth and development.
- Low number of internet users: Cameroon has approximately 1.5 million internet users; this represents 6.4% of total population with an 8% penetration rate (2013) up from 1.4 % back in 2006. The high penetration rate shows that the future is bright for those who invest now in their e-commerce ventures but will have to target the long-term to expect substantial financial gain in Cameroon. Low percentage of internet user simple means, clients will be difficult or expensive to get, thus lesser revenue.
- Insufficient security and low adoption rate of new online technologies: must e-commerce customers around the world worry at one point about their personal and financial information they share online and doubt the general security of many online shops. This is even more pronounced in Cameroon due to several reported online frauds making it difficult for many people to trust any online business. Many Cameroonians prefer a cash and carry system. Buying online in Cameroon is still and adventure for many, even the most educated.
- Lack of third party infrastructure to deliver goods: e-commerce is more profitable when there is already an efficient and reliable local postal and transport network in place (see fig 1 below). The simple delivery of a package can greatly affect the final price of a particular item. Cameroon still lacks the necessary infrastructures that allow companies to operate at low cost and let customers benefit from lower prices.
- Lack of ICT infrastructure: the lack of high speed internet connection necessary to surf online and make purchases is absent in most parts of Cameroon.
- Underdeveloped third part online payment systems: e-commerce goes hand in hand with online payment systems often developed by third parties as demonstrated in figure 1 below. There has to be an acceptable level of secure online payment methods to let e-commerce flourish but this is not the case yet in Cameroon. Though a handful of banks are issues credit cards and the increase presence of online and mobile payment system such as PayPal, MTN mobile money, BICEC E-Pay, Afriland Bank I-card , Union Bank of Africa credit card and a host of many other solutions, the wider part of the population still have to be aware of the benefits of these services and given the fact that less than 5% of Cameroonians have access to a bank account.
Fig 1 Major stakeholders in the e-commerce industry in Cameroon. E-commerce is very dependent on services provided by third parties.
- Insufficient website maintenance and promotion: to develop, maintain and market an e-commerce solution require a lot of capital. Clients need to be able connect and shop at their convenience, website need to be up and running 99% of the time, Search engine optimization(SEO) techniques most be heavily deployed and other online marketing strategies should constantly be carried out to build and maintain the momentum throughout the existence of the website. However apparent this might seem, many e-commerce website especially local start-ups have the right idea but their business is usually slowed down due to lack of maintenance of the websites, hence frequent broken links thereby discouraging already hard to get clients.
- Difficulties in reaching the right demographic and low purchasing power: Internet technologies are easily adopted by the younger population (14-30) but they have a lower purchasing power since a majority of them are still students depending on their parents. The older generation is skeptical about making purchase online since the concept is still relatively new to them yet they are the ones that make up majority of Cameroons workforce and middle class with a reasonable disposal income.
- Number of personal computers (PC) per 1000 inhabitants: Back in 2005 Cameroon had 11.39 personal computers per 1000 inhabitants up from 3.19 in 2000
If we follow the above PC acquisition rate there should be about 31 per 1000 inhabitants in 2015, or even more due the increase availability of cheaper PC both new and second hand. Though Cameroon has the highest number of PCs per 1000 inhabitant in central Africa it is still far from the average in Africa and very far from the world average. More to that, increase number of PC per household does not mean they have high speed, secured internet connection necessary for e-commerce type of activities.
Solution to the above challenges
- Companies should not be scared to invest in the e-commerce industry in Cameroon; instead they should be more prepared and find creative ways around the many challenges. No matter these challenges electronic commerce is slowing becoming the new way of doing business in Cameroon. Companies that are capable of hanging in there for a long time will reap the biggest benefits the growing Cameroon economy and middle class has to offer.
- No matter the present competition, the Cameroonian e-commerce industry does not really have a leader yet, this leave room for ambitious e-commerce companies to step up and fight for a market share.
- The very small number of internet users should not discourage e-commerce companies, but it is important to understand the demographics and the consumer behavior of those people likely to have access to the internet and the type of products and services they might be highly demanded. Besides, the internet penetration rate and the number of PC per household is increasing drastically, this might be one of the best times to move into this market. However, more than one person can use a computer to make a purchase and there is an abundance of cyber cafés in Cameroon.
- The lack of high speed internet and ICT infrastructure makes it necessary to develop lighter website and use simpler image formats to reduce download time, making it easier for users to surf through websites thereby improving the user experience and reduce the bounce rate. In short, your web store must be as user friendly as it can get. All the fancy and unnecessary pages, heavy files and widgets that could increase the page load time should be avoided. Besides the ICT and internet infrastructure is rapidly developing and you don’t have to wait until it is fully established before you come in. Lack of online payment systems can be compensated by providing different payment options such as, payment upon delivery, bank transfer payment methods, partnership with banks and reputable mobile payment companies.
- Lack of a reliable shipping, transportation and delivery network invites companies to look for creative solutions such as creating partnerships with local shops to serves as pick up points, creating a physical store in some strategic locations and investing more in their own shipping, transportation and delivery network.
- One of the main challenges in Cameroon that e-commerce ventures face can be solved by frequent, consistent and resilient marketing and promotion efforts. To target a wider audience, family type publicity should be done encouraging families to make purchase together; this will encourage the younger generation to help the older generation with a higher purchasing power to connect to the internet. Workshops, seminars and conferences should be organized to educate potential customers how to surf and buy online, inform them about the security measures in place to safeguard their sensitive information.
To serve valuable time and money, A54 Marketing Group can assist you in developing your e-commerce business; introduce your products in already established e-commerce websites and super markets and other retail and wholesale outlets in Cameroon and Sub-Sahara Africa.
We go above and beyond to market your products and services.
Source: www.a54marketinggroup.com white papers