How SMBs can harness e-commerce in this era of COVID-19


E-commerce, known as e-commerce or e-commerce, is the business model of buying and selling goods and services over the Internet.

Until the beginning of e-commerce, many businesses used a physical (brick and mortar) business model, where customers could walk in and transact business.

However, with the growth of the internet, a whole new channel for doing business without physically interacting has emerged.

Globally, e-commerce accounts for approximately 14% of all retail sales. However, with the advent of Covid-19 or Covid-19 pandemic from December 2019, e-commerce has gained new importance. The pandemic has seen the imposition of lockdowns in many countries, limiting physical interactions. This, coupled with self-imposed social distancing to avoid contagion and strict enforcement measures in many countries, has led to a decline and, in some cases, a temporary halt in physical trade.

“In the United States, retail and foodservice sales between February and April 2020 fell 7.7% compared to the same period in 2019. However, sales increased for grocery and non-store retailers (mainly e-commerce providers), 16% and 14.8% respectively. In the EU, retail sales by mail order or on the Internet in April 2020 increased by 30% compared to April 2019”, reveals a study by the global policy forum, the Organization for Economic Co-operation and Development (OECD).

The research further stated: “Although official statistics are not available for most other countries, estimates suggest that online orders increased in several regions during the first half of 2020, including Europe, North America and Asia-Pacific.”

Although online retail channels are currently growing in Africa, the pattern is no different. A study by global payments company Visa found that 71% of respondents in Nigeria and 64% in South Africa bought groceries online for the first time due to the Corona virus pandemic. “During the first half of 2020, pan-African online retailer Jumia also reported increased demand from sellers across the region to grow their business on its platform, as the Covid-19 crisis further established e-commerce. as an important route to market”, the investigation showed.


In Ghana, official e-commerce statistics are not readily available, but anecdotal evidence suggests that e-commerce is picking up, especially among start-ups operating in fashion, food, electronics, technology and personal care. Reasons for the growth of e-commerce in Ghana include: macroeconomic growth in recent years leading to the emergence of a middle class with disposable income, growth in internet usage and internet speeds , a young and tech-savvy population, an increase in the use of mobile phones and devices (smartphone penetration) and others.

According to Statista, the market and consumer data company, Ghana is the 11th highest internet user out of the 54 countries in Africa and second only to Nigeria in the West African sub-region. This high internet penetration rate, coupled with the fact that Ghana has one of the most progressive telecommunications regulatory regimes in Africa, has opened up unlimited opportunities for small and medium-sized enterprises (SMEs) to operate and grow their activities.

Although Ghana is not as advanced as countries in the developed world in terms of e-commerce, the sector has seen steady growth over the past decade. Companies with an online presence allow payments to be made through mobile money wallets operated by mobile phone companies like MTN. Others allowed customers to use bank-issued debit cards with VISA or Mastercard to make payments. This phenomenon opened up the possibility for Ghanaian start-ups to introduce integrated payment platforms such as Slydepay, expressPay, Hubtel, WopeDigital and Zeepay (which later received the first dedicated e-money issuer license from Bank of Ghana).These apps serve as an interface between online businesses and payment platforms, creating seamless payment opportunities.This provides an opportunity for these young financial technology (fintech) entrepreneurs to grow their brand and their size. For example, Slydepay was developed by local startup DreamOval and it has
Stanbic Bank Ghana Limited and Enterprise Insurance, two major financial companies in Ghana.

Unique hybrid

E-commerce as it relates to Western countries has its unique hybrid forms in Ghana. Some other SMBs that don’t have websites or a web presence use social media posts to showcase their products and services to their targets. Typically, an SME without a physical office might post merchandise such as clothing and shoes on social media platforms such as Instagram or Facebook. Interested customers can shop and make purchases through their mobile money wallets or pay cash on delivery. In the latter case, the transaction begins online, but the payment (cash on delivery), is completed when the delivery person brings the products to the customer.

This hybrid mode of e-commerce is used by SMBs, which may not even be registered to do business from the comfort of their homes.

This emerging trend is opening up business opportunities in website development, digital marketing skills training, payment platform development, setting up delivery services, and more. to enterprising SMEs.

Regulation normally follows innovation, as it does all over the world. This means that entrepreneurs innovate, and then regulators issue rules to guide the innovative ideas of these entrepreneurs. Key laws and regulations in the e-payment industry, which impact e-commerce, include the Digital Financial Services Policy, a government-initiated policy that aims to create a resilient, inclusive and innovative digital financial services ecosystem. that contributes to social development and robust economy; The Payment Systems and Services Act A987, an act to regulate institutions that conduct payment and electronic money services, continues to drive online payments and thereby create opportunities for e-commerce.


Initiatives such as the introduction of QR codes (Ghana being the first in Africa to introduce a universal version) continue to play an important role in the development of e-commerce and electronic payments in Ghana. The booming e-commerce sector could be leveraged to promote job creation and economic development. Relevant agencies could do a lot to stimulate the growth of e-commerce and provide job opportunities for young people, who make up the bulk of the population. These include the creation of funds allowing startups to access financing for their businesses.

Physical infrastructure could boost e-commerce. A major issue for online businesses is the ability to identify and locate their customers for delivery of purchased items. The current digital addressing system deployed by the government should be aggressively pursued to facilitate GPS delivery.

The cost of internet data should be reduced to make it affordable for people who use the internet. This can be done by the government by giving tax breaks to telecommunications service providers. Taxes on imported cell phones should also be reduced to make them cheaper for citizens. Indeed, according to research, the majority of online traffic in major digital markets in Africa comes from mobile devices rather than traditional desktop or laptop computers. This is partly because mobile connections are much cheaper and don’t require the infrastructure needed for traditional desktop computers with fixed Internet connections. In addition, institutions such as the National Information Technology Agency (NITA), which is responsible for providing Internet to rural populations, where commercial telecommunications providers do not consider viable, should be adequately funded. to carry out their mandate.

The government can also stimulate the growth of e-commerce by providing technology hubs across the country, offering digital training, mentoring and support to young people who want to learn, while providing support to existing institutions.

A major challenge that calls for attention is the increase in cybercrime in Ghana. The passage of the Cybersecurity Act of 2020 (Act 1038) is a step in the right direction, but requires additional efforts from relevant stakeholders to secure e-commerce and other uses of the Internet.


With a growing population, especially young people taking advantage of globalization and technological trends, the emergence of fifth-generation (5G) wireless technology and other developments, the future of e-commerce can be described as very bright and promising. This is especially the case considering that the growth in adoption of Microsoft Teams, Zoom, Google Meet and Skype and other online meeting platforms due to the Covid-19 pandemic has given impetus addition to e-commerce.

The relatively low cost of running businesses online holds great potential for SMEs, especially as businesses continue to grapple with the effects of slowing economic growth caused by the COVID-19 pandemic, which is ironically become an engine of business growth in the commercial e-space. Are you planning to start an e-commerce business as an SME? It’s still the best time.


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