How SMEs can tap into E-commerce in this COVID-19 Era

How SMEs can tap into E-commerce in this COVID-19 Era

Electronic commerce, which is known variously as E-commerce or ecommerce, is the business model of buying and selling goods and services over the internet.

Until the onset of e-commerce, many businesses operated a brick-and-mortar (physical) business model, where customers could walk in and undertake business transactions.


However, with the growth of the internet, a whole new channel of doing business without interacting physically was birthed.

Globally, E-commerce accounts for about 14 per cent of all retail sales. However, with the advent of the Covid-19 or Covid-19 pandemic from December 2019, e-commerce has gained a new prominence. The pandemic saw 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, led to a decline, and in some case, a temporary halt in brick-and-mortar trade.

“In the United States, retail and food services sales between February and April 2020 were down 7.7 per cent compared to the same period in 2019. However, sales increased for grocery stores and non-store retailers (mostly e-commerce providers), by 16 per cent and 14.8 per cent respectively. In the EU, retail sales via mail order houses or the Internet in April 2020 increased by 30 per cent compared to April 2019”, research from the global policy forum, the Organisation for Economic Co-operation and Development (OECD) reveals.

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

Although online retail channels are now developing in Africa, the pattern is no different. A study by global payments company Visa, found that 71 poer cent of respondents in Nigeria and 64 per cent in South Africa bought groceries online for the first time because of 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 expand their business on its platform, as the Covid-19 crisis further established e-commerce as an important route to market”, the survey showed.


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

According to Statista, the market and consumer data firm, Ghana has the 11th largest users of the internet 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 Ghana having one of the most progressive telecommunications regulatory regimes in Africa, has opened up unlimited opportunities for Small and Medium Scale Enterprises (SMEs) to tap into and build their businesses.

Although Ghana is not as advanced as countries in the developed world in terms of e-commerce, there has been a steady growth in the sector over the last decade. Businesses with online presence allow for payments to be done via mobile money wallets operated by mobile phone companies like MTN. Others have made it possible for customers to use bank-issued debit cards with VISA or Mastercard to make payments. This phenomenon has opened the opportunity for Ghanaian start-ups to introduce integrated payment platforms such as Slydepay, expressPay, Hubtel, WopeDigital and Zeepay ((which subsequently received the first Dedicated Electronic Money Issuer License from Bank of Ghana) on the market. These apps serve as the interface between the online businesses and payment platforms, thus creating seamless opportunities for payments. This offers opportunity for these young financial technology (fintech) entrepreneurs to build their brand and size. For instance, Slydepay was developed by local startup DreamOval and it has
Stanbic Bank Ghana Limited and Enterprise Insurance, two major financial companies in Ghana on it.

Unique hybrid

E-commerce as pertains in Western countries have its unique hybrid forms in Ghana. Some other SMEs that do not have websites or web presence, make use of social media posts to showcase their products and services to their targets. Typically, an SME without a physical office could post wares such as clothes and shoes on social media platforms such as Instagram or Facebook. Interested customers can buy and make purchase via their mobile money wallets or pay cash on delivery. In the case of the latter, the transaction starts online, but the payment (cash on delivery), is completed when the delivery person takes the products to the customer.

This hybrid e-commerce mode is used by SMEs, which may even be unregistered to do business from the comfort of their homes.

This emerging trend opens up business opportunities in website development, training on digital marketing skills, development of payment platforms, establishment of delivery services, and so on to enterprising SMEs.

Regulation normally follows innovation, as is the case around the world. This means, entrepreneurs innovate and then regulators issue rules to guide the innovative ideas of these entrepreneurs. Major laws and regulations in the electronic payment sector, which have a bearing on e-commerce include the Digital Financial Services Policy, a policy initiated by government that seeks to create a resilient, inclusive and innovative Digital Financial Services ecosystem that contributes to social development and robust economy; Payment Systems and Services Act, A987, an act to regulate institutions which carry on payment service and electronic money business, continues to drive online payments and thus 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 significant roles in the development of e-commerce and electronic payments in Ghana. The fast-growing e-commerce sector could be harnessed to promote job creation and economic development. The relevant agencies could do a lot to boost the growth of e-commerce and offer job opportunities to young people, who form the bulk of the population. These include the establishment of funds for startups to access to fund their businesses.

Physical infrastructure could boost e-commerce. A major problem for online businesses is ability to identify and locate their customers for delivery of items purchased. The current Digital Addressing System being rolled out by the Government should be aggressively pursued to make GPS-enabled delivery easier.

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 giving tax rebates for telecommunication service providers. Taxes on imported mobile phones should also be reduced to make it cheaper for citizens to afford. This is because according to research, the bulk of online traffic in leading digital markets in Africa originates from mobile devices instead of traditional desktop or laptop computers. This is partly due to the fact that mobile connections are much cheaper and do not require the infrastructure that is needed for traditional desktop computers with fixed-line internet connections. Additionally, institutions such as the National Information Technology Agency (NITA), which is tasked with providing internet in rural populations, where commercial telecom providers do not see as viable, should be adequately funded to carry out their mandate.

The government can also spur the growth of E-commerce by providing technology hubs across the country, offering digital training, mentorship and support to young people who would want to learn, while lending support to existing institutions.

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


With an increasing population, especially young people who are tapping into globalisation and technology 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 so when one considers the growth in the adoption of Microsoft Teams, Zoom, Google Meet and Skype and other online meeting platforms due to the Covid-19 pandemic has provided additional impetus to e-commerce.

The relatively low cost of running businesses online holds a high potential for SMEs especially as businesses continue to face the effects of slower economic growth brought about by the  COVID-19 pandemic, which has ironically become a driver of the growth of businesses in the e-commerce space. Are you thinking of starting an E-commerce business as an SME? This is the best time yet.



Connect With Us : 0242202447 | 0551484843 | 0266361755 | 059 199 7513 |

Like what you see?

Hit the buttons below to follow us, you won't regret it...