Namibia’s Ecommerce Challenges

The term eCommerce refers to the purchasing and selling of products online using various electronic methods to complete the transaction. While this form of online shopping has been quickly adopted in many countries throughout the globe, Namibia has however not fared so well. Many may argue that the main reason for this is the adoption rate of modern technology by local Namibian companies, but the reality stretches so much further.

Ecommerce Challenges
Ecommerce Challenges

There have been several Namibia-based eCommerce portals that’s been launched and that sadly failed, in many cases the platforms are even still available online with outdated content and payment systems that do not fully work. It almost seems like Namibia has started creating a graveyard of failed eCommerce sites.

The eCommerce portals or websites that do well work in Namibia are those companies who do not aim to only satisfy the Namibian market, but just add it as another destination in their global market. Those that only seek to satisfy the Namibian market has a lot more challenges to overcome than it might seem.

Earlier in 2017 I attended a 99FM Open Panel Discussion regarding the current economic situation in Namibia and one of the guest speakers mentioned that he attended a conference in a first world country where the speaker stated that if businesses are not planning on selling online they will not be able to compete in the future as eCommerce is becoming the norm. While this is great advice in first world countries like America or the UK, this advice in Namibia brings with a lot more challenges due to a range of both economic, social, legal and environmental circumstances of our country.

The main aim of this article is to touch on some of the issues Namibian businesses face in terms of eCommerce and its success within the Namibian boundaries.

You need to build trust

The one similarity found in Namibia when doing business is word-of-mouth or trust. Regardless of the village, town or city in Namibia if you ask someone where you can do or get something done they will say something like “… go to Joe Do at Company X, he is brilliant in what he does – I trust him…” It is rare that you will hear a local Namibian refer to a company because of their marketing efforts or business communication, most business is done on recommendations and word of mouth.

Due to the “smaller” population in Namibia, Namibians tend to create small communities and ensure to help one another within those communities. For instance, A couple of years ago I lived in a complex and within the complex there was a small local plumber who owns his own plumbing company. One day the lady working on the body corporate contacted me and said that we had a leak in our geyser and the water was streaming down the outside of our wall. By the time I got to the complex, they already switched off all of the water and the lady was standing outside my door with the local plumber ready to fix the leak. In a matter of minutes the problem was sorted out.

It is this way of doing business in Namibia that fascinates me. While this is a unique and amazing treat of Namibians, the downside is if you want to start a new business trying to penetrate a segment of a specific market. How do you build trust?

The flipside of the Namibian trust trait is if it is mixed with a limited knowledge of the internet and online purchasing. In many cases Namibian online users do not “trust” websites or do not “trust” providing the credit card details online. I have been asked if “….amazon can be trusted…” and those individuals who trust Namibian eCommerce sites are stuck with the graveyard of eCommerce sites that are no longer updated or used.

Understanding the Legal Challenges

One of the major legal challenges we face in Namibia is the fact that we do not have a law that governs the use of internet within Namibia, while there are several laws that can be transferred to the online realm there are several actions that cannot be conducted electronically due to the lack of an official law.

For instance, while there are several companies that would like to provide their clients with a complete online application form system (e.g. banks, insurance companies, etc.) they cannot as there is no law stating how digital signatures are handled and dealt with.

Another major limitation brought to light is the proper use of international services such as PayPal. PayPal is an internationally accepted and used form of online payment. Many online portals allow users to make and receive payments via PayPal; however in Namibia we are only allowed to make payments via PayPal and not receive them.

There so many online business opportunities that we as a country are missing out on, and this purely because of loopholes that can be found with the conduction of online business.

While this has been the case until date, Namibia is actively working on an Electronic Transaction and Cybercrime Bill. It has been recently announced that the Bill is open for public comments until 17 June 2017. The Electronic Transaction and Cybercrime Bill / Act will allow us to not only conduct business online, but might hopefully open up a variety of online payment solutions like PayPal.

The aim of the Namibian Electronic Transaction and Cybercrime Bill is aimed to:

  1. Promote e-Government services and electronic commerce and communications with public and private bodies, institutions and citizens;
  2. Develop a safe, secure and effective environment for the consumer, business and public agencies or bodies to conduct and use electronic transactions.

For more information about the Namibian Electronic Transaction and Cybercrime Bill you can contact Ms. Elizabeth Ujarura Kamutuezu via email (Elizabeth.kamutuezu@mict.gov.na) or via telephone on +264 61 283 3693 or via cellphone (+264 81 143 8414). Alternatively you can also click here to download the Bill or visit the www.mict.gov.na website (under the Billboard section).

Now it is true that the Namibian Government is currently working on tabling the Bill to convert to an Act and while this will help tremendously with the various online legal challenges faced, it is important to remember that the implementation of the Bill / Act will take a while. We’ve seen this happen with the Tobacco Act; while the act has been passed the implementation is still not 100% active as there are various challenges faced around the implementation.

So while the Bill is being discussed and it should be implemented in your e-Commerce site from the get-go, it is important to take the implementation time into consideration.

Payment Challenges

The e-Commerce sites that ended up in the Namibian e-Commerce Graveyard are generally those e-Commerce sites that only allow one or two forms of payment, which is generally Credit or Debit Card payments.

While this may be the ideal solution for many, there is still a large percentage of the Namibian population that do not make use of banking services. Unfortunately the only data I could find in regards to this in from a FinScope Consumer Survey from 2012 which indicated that only 29% of Namibians have a Bank- or Nampost- account, with 66% of the population receiving their income cash-in-hand and only 60% of the nation received income on a monthly basis.

While the information is 5 years old, it is important to consider the reality of this situation. In terms of payment, it is important to remember that not everyone in Namibia owns a bank account, thus by purely allowing Credit or Debit Card payments you might be eliminating a large percentage of the Namibian population.

Distribution Challenges

Namibia is truly an astonishing country. To think Namibia’s entire population is approximately 5% of that of South Africa. In addition to that of the small population only 29% has access to bank accounts and they are scattered over a surface area half of that of South Africa.  These users are scattered kilometres apart with limited (or no) access to town due to the lack of Civil Development in certain areas of the country. We cannot be blind to the fact that Namibia is still a developing country who faces several issues which is not found in the Windhoek or other larger towns like Swakopmund, Walvis Bay, etc.

In 2012, according to the FinScope Consumer Survey, many people within Namibia had to travel up to three hours to get to basic necessities like medical services (40%), banks (34%), post offices (33%), and markets (30%). Distribution has always been a challenge in Namibia.

It is true that a large percentage of e-Commerce will occur in Windhoek and other larger towns scattered throughout Namibia; however it is always important to take the distribution and use into consideration when calculating the rate of your e-Commerce success.

Device Compatibility Challenges

This is a challenge that many are already aware of. Due to the range of devices available allowing visitors to access the internet it is important to ensure that your e-Commerce portal is compatible with a large percentage of devices used in Namibia. It does not help you build an e-Commerce site that only functions on desktop computers while in fact a large percentage of internet activity in Namibia is conducted via mobile devices.

Maintenance and Visual Challenges

The biggest challenge of any e-Commerce portal is the product maintenance of the portal. If you are planning on selling a couple of hand-made products, the maintenance is less of a challenge; however it still remains crucial that the e-Commerce portal only displayed up-to-date information, stock availability and pricing.

In cases where larger companies want to setup an e-Commerce portal to promote their thousands of products maintenance of those products are obviously a challenge. It would not make sense for a large company to make use of manual updating as the resources required for such updating will end up being more costly for the company than finding another method of updating the e-Commerce portal.

With larger companies automation between the internal systems and website used is most definitely a solution; however this within itself holds a couple of challenges. In most cases internal systems do not make provision for the maintenance of images, thus it is important that the automation process ensures that both the product information and images are updated at the same time.

Don’t adopt an e-Commerce Strategy, but rather a Business Strategy

With the various challenges faced in Namibia it is clear that we cannot blindly jump on the e-Commerce train, but instead develop a solid Business Strategy depicting the goal and objectives of the e-Commerce portal, ensuring that both the risk and rewards are measured against each other.

It is important to remember that each industry has its own unique challenges which should be taken into consideration. For instance, when an e-Commerce portal is opened by a company it is important that the employees are properly trained on the portal prior to its launch, ensuring that they can not only promote the portal but also provide assistance to customer when and where needed.

When planning your e-Commerce Business Strategy a great approach to consider is an Adaptive e-Commerce Approach in which you develop the e-Commerce portal in such a way that it can quickly and easily adapt to new challenges and technologies available, ensuring that you do not spend thousands in the constant re-development of the portal.

Don’t stop when you think you’ve succeeded

The one thing that makes the internet amazing is the fact that it is ever changing. As we speak people are working around the world to improve the already existing intelligence behind the e-Commerce idea. So if the internet is ever changing why keep your e-Commerce portal the same forever?

Even if it seems like you have made a success don’t stop improving on your portal, make sure that you keep on improving on it to provide your visitors with the best online shopping experience keeping you ahead in the game. Again you don’t have to re-develop your website every time you can add a couple of minor add-ons to improve your visitors experience like adding a product suggestion, most viewed products, etc.

Why stop there, what about an Artificial Intelligence (AI) approach? Sure this may seem like something from a Si-Fi movie, but it is quickly becoming a reality. In fact both Microsoft and Google announced in their respective 2017 Development Conferences that they are heading from a Mobile-First to an AI-First approach. While AI technologies are not readily available to the public, you can start implementing predictive marketing techniques to start collecting enough data about your consumers to quickly and easily implement machine learning techniques (AI) in your website to improve on its overall experience, ultimately improve sales.

Final Thoughts

With that said I am not at all saying that it is impossible to start and run a successful e-Commerce business in Namibia as long as the portal is being treated like a national store and not a quick software installation.

If you are considering building a successful e-Commerce portal targeted purely to satisfy the Namibian Market, it is important to build it for the Namibian market and not simply implement first-world solutions in a third-world country.

Consider all of the factors both from a rural and urban perspective. Ask the important questions like how will your consumers access your online business, how will they pay, how will you deliver the products. There is so much to consider that you cannot expect to successfully launch an e-Commerce portal overnight.

While I’ve mentioned several obvious challenges you are more than welcome to contact me via LinkedIn to discuss your industry and the challenges you might face.

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