Ecommerce has largely been defined as the trade of data, information and goods and services using digital media. With Lesotho being one of the top internet users in Southern Africa, and top smartphone buyers as well, what is the state of ecommerce in the country?
Ecommerce should be viewed on one key philosophy;
“Be patient with me, learn from me, and ultimately, you will profit from me”.
In the developing world, ecommerce is largely practised by corporates and financial institutions meaning its growth implies an imbalanced distribution of benefits between corporates and SMEs. The main concern has been on how it will benefit SMEs in developing countries where they suffer the greatest market access and business growth constraints.
Before we get into the benefits of ecommerce for SMEs, we must first assess the dimensions for the establishment and development of Ecommerce for Ecommerce. These are many, but have greatly been summarized by Richard Duncombe and Alemayehu Molla into five (5) key categories;
Organizational Readiness
This is defined by the availability of technological, human and financial resources that the SME possesses. They formulate the input competencies required for the SME to deliver the goods and services to the consumer. Majority would, depending on the economy, argue that Tech and Financial resources are the key indicators of organizational readiness.
Organizational Capabilities
The tangible resources mentioned above depend on the intangible resources such as contracts, the know-how, skills and experiences and SME reputation built over time to define the Organizational Capability required for the effective use of Ecommerce technologies.
It is one thing to have resources, but the other to know HOW to use them, when to use them and most importantly, how to maintain them. SMEs need to be able to build these capabilities for them to effectively benefit from ecommerce technologies.
Ecommerce Capabilities
This dwells more on the evolution and growth of the ecommerce technologies from less to more sophisticated applications and emphasis on the external communication to internal business process integration. These capabilities are critical features of organizational readiness and capabilities combined and feature web presence, interactive websites, business process integration and a number of digital applications.
Ecommerce Motivation
Put simply, this is about the readiness for change and development, and highly depends on the SME’s founder, or manager to actually adapt, learn and adapt the business processes to digital media devices.
Commodity Chain Position
The commodity chain is a process by businesses to gather the required resources, transform them into finished goods and services and avail such goods and resources to the consumer or client.
Ecommerce has largely been believed to give SMEs greater access to commodity chains. Research on SMEs in developed countries indicates that drivers of innovation are established market networks, competitive and industry pressures through collaborative trading. Ecommerce can largely be used to speed up SME position in the commodity chain and therein put them in a position to collaborate and partner and drive innovation as in the developed economies.
Having understood these dimensions, it is then very important for SMEs to conduct an introspection and be in a position to ultimately understand the benefits of Ecommerce for their operations and growth. These benefits are;
- Reduction in Operational Costs
- Reduced Time Processing
- Extended Market Reach and increased Customer loyalty
- Diversification (and increase) of sales
- Reduced costs of purchasing and procurement
- Improved External Communication
- Improved Employee productivity & Brand Image
The Realities of Ecommerce for Lesotho (Past, Present and the Future)
The belief that Lesotho has a poor economic activity in the private sector is inadequate, and remains to be seen. Fact of the matter is that there is an active private sector, it is just not registered, not digital and lack the financial means to be legally recognized.
These range from the informal sector trading to menial business activities. This means there is a small network partnering, strategic partnerships and therein a bridge between corporates and SMEs.
Currently, according to Lesotho Communication Authority (LCA), 78% of Lesotho’s residents have access to smartphones, meaning in the SADC countries, Lesotho is ranked fifth (5th) having a mobile subscription rate of 100.94. About 63% of internet users access the internet every day. Lesotho’s SMEs need to do more to be more recognized in order to be more ready and capacitated.
Strategic collaborations and partnerships need to be more established for Organizational Readiness and Capabilities. Ecommerce technologies are present amongst SMEs in the developing countries, just largely used for marketing purposes. This is understandable and is required, but limited. Startups such as Black Hair, and Doorstep Deliveries have taken notable strides for ecommerce trade and incentivize followers and consumers to use their websites.
Offline and online collaborations need to be established to push local SMEs higher up the commodity chain and give them trading advantage. The future of the growth ecommerce in Lesotho highly depends on this, and usage of social media platforms as communication and marketing tools to drive traffic to websites.
Change agents are required to mobilize stakeholders to establish improved IP Laws and promote strategic partnerships and collaborations between entrepreneurs and IT skilled personnel to make brands more visible online.