Abstract

This thesis set out to examine and analyse the effect of poor internet quality and low internet penetration on e-commerce in Cameroon where the internet situation is in dire need of improvement, especially considering the fact that e-commerce works solely with the use of the internet for selling of products. It provides a thorough insight to the problems faced by e-commerce businesses in Cameroon as a result of this situation, with Sellam Quick as case study. The main of objective of this thesis was to assess the effect of poor internet quality and low internet penetration on the said institution. Data was obtained from various sources like the employees of Sellam Quick,its accounting archives, internet sources and published data. The research made use of two analytical tools mainly the growth rate and Pearson correlation coefficient.The study revealed that the poor internet infrastructure of the country as well as its low internet penetration rate have a linear relationship with the operations of Sellam quick. The effects of poor internet infrastructure on Sellam Quick were very glaring.  Poor internet quality was seen to have an adverse effect on the functionality of Sellam Quick website which in turn impacts sales, and how low internet penetration which impacts Sellam Quick visibility and profitability. As a result, the thesis concluded by makinga number of recommendations to both the government and the organisation including the speedy start and completion of the placement of major internet cables like Main One and West African Cable System to make way for good quality and affordable internet and to Sellam Quick, the creation of other profitable partnerships to boost revenue.

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

The Internet has revolutionised the way the world does business on both the local and global levels (smallbusinesses.chron.com August 2016).The development of the internet has significantly altered the day to day operations of businesses; including how they communicate with each other and their audiences and information can be easily transmitted to any destination in a matter of seconds (cns.-it.co.uk August 2016).The internet has thus become an important medium for information acquisition and knowledge dissemination across the globe which has in turn led to the emergence of digital economies and smart communities (Kamel 1995).The internet though initially created for political reasons in the USA, has been vulgarised and is now being used by almost everyone with access to an electronic device for social, economic and even political reasons (internetsociety.org July 2016). The commercialisation of this great invention in the 1980s, paved the way for the emergence of e-commerce in the 21^st century, as retail online enterprises saw their birth like Amazon in the USA, Alibaba in China and Jumia in parts of Africa(ventureburn.comAugust 2016). Its emergence has created fundamental changes to the way that business is conducted. These changes include the advertisement and sales of goods and services online.

In the course of the globalisation of e-commerce, Cameroon was not left out.The coming of the internet to the country in 1997 paved the way for the emergence of e-commerce in the 21^st century but has since been slow in growth, given the low internet penetration rate in the country (Wung 2015). This later on saw the emergence of retail online enterprises like Jumia, Sellam Quick and Kaymuin Cameroon. These online businesses, like the traditional business enterprises must market and sell their goods. Given the nature of the business, the use of the internet is primordial to its functioning. Unfortunately, this sector still largely remains unexploited due mainly to the low internet coverage and penetration of the country. The most recent statistics show an internet penetration of 18% in2016 for Cameroon (internetlivestats.com October 2016). This problem is further compounded by the poor band width that covers the national territory. The international bandwidth in Cameroon remained a low 340 gigabytes—a figure that lags far behind some of its West African neighbours according to Alliance for Affordable Internet (A4AA) 2014. The organisation cites Ghana in its write up as being one of the best connected countries in Africa. As of 2014, it was connected to four submarine cables, including the WACS and ACE, and has a bandwidth capacity of 12 terabytes for its population of nearly 26 million.Till 2014, Cameroon by contrast has been connected to only one cable that is the SAT-3 cable and it was not until 2015 that the government linked up the country to the WACS cable (budde.com October 2016).

Putting this situation into perspective, the research sought to determine how businesses are faring by looking into the impact of the poor internet quality Cameroon faces as well as the low internet penetration rates on online businesses. The research also sought to make inferences with the data gathered in the course of this research that could lead to coordinated conclusions and recommendations to improve this sector. To do this, the research shall be using Sellam Quick to examine this dilemma.

1.2 Problem Statement

Every business exists primarily to make profits no matter the sector. In order for these businesses to be profitable, they must have a substantial number of clients through whom income is generated. Also, they need to operate under the most favourable circumstances and in the case of Sellam Quick, an e-commerce organisation in Cameroon, it needs to have the most favourable internet band width and wide internet penetration coverage to operate successfully and to reach the maximum number of clients. The lack of high speed internet connection necessary to surf online and make purchases is absent in most parts of Cameroon (a54marketinggroup.com August 2016). Also, according to Ngangfen 2014, 54% of SMEs (Small and Medium size Enterprises) complain of the low internet penetration rate, 89.1% of them complain of poor ICT infrastructure and a host of other issues. The presence of a few e-commerce businesses has still not boosted the sector as barely 2% of Cameroonians made online purchases in 2015 (businesscameroon.com August 2016) and most fingers are pointing at the limited access to the internet by Cameroonians.

Successful e-commerce sites require a smooth, efficient system and the commitment to make regular improvements and maintenance (Ngangfen 2014). The CEO of Sellam Quick revealed that, their ideal internet specifications would be high speed broadband of about 10MB. Presently, they only have the standard CAMTEL broadband of 4MB, a far cry from what they hope for.

To further compound the problem is the low internet penetration rate of 18%, one of the lowest in the world. A low percentage of internet users simply means, clients will be difficult or expensive to get, thus lessening revenue (a54marketing group.com August 2016).This poses a huge problem for online businesses like Sellam Quick to thrive well given that most of its activities mainly marketing and sales and all other communication are done primarily with the use of the internet. Therefore, Sellam Quick must overcome this challenge not only to survive but to be profitable. For a thorough and effective examination to be carried out on this issue, the following research questions must be answered:

1. Does low internet penetration affect the website visitation rates and profitability of Sellam Quick?
2. If so how?
3. Does poor internet quality affect the daily operations of Sellam Quick?
4. If so how?
5. What are the strategies put in place by Sellam Quick to overcome this problem to meet its objectives?

1.3 Objectives

The objectives of this research are:

Main Objective

To identify the effects of poor internet quality and low internet penetration of Sellam Quick operations in Cameroon.

Specific Objectives

1. Identifying and assessing the impact of poor internet quality on the operations of Sellam Quick.
2. Determining whether low internet penetration affects the website visitations or online visibility of Sellam Quick.
3. Determining whether of low internet penetration affects the profitability of Sellam Quick.
4. Determining what Sellam Quick is doing to overcome the challenge of poor internet quality and low internet penetration in Cameroon.
5. Determining whether Sellam Quick is successful despite the poor internet quality andlow internet penetration in Cameroon in terms of its profitability and vision achievement.
6. Making recommendations on successful strategies for Sellam Quick in particular e-commerce businesses in Cameroon in general despite this challenge.
7. Making recommendations for the improvement of internet penetration in Cameroon.