The idea of online business revolves around the concept of conducting commercial activities, transactions, and interactions over the internet. This includes selling products, offering services, marketing, and engaging with customers through online platforms.
At the core of an online business is a digital presence, typically in the form of a website or an online store. This serves as the primary platform where customers can learn about products or services, place orders, and make payments. Many online businesses also leverage social media platforms (e.g., Facebook, Instagram, Twitter) to reach and engage with customers, promote products, and drive traffic to their main site.
The late 2010s saw the growth of local e-commerce platforms focusing on various niches, from fashion to electronics. Companies like Zoobashop and others helped to build the local e-commerce ecosystem. To support the growing online business trend, logistics, and delivery services expanded, with companies like Glovo and Bolt Food entering the market to provide last-mile delivery solutions.
Online businesses rely heavily on digital marketing strategies to attract and retain customers. This includes Search Engine Optimization (SEO), Pay-Per-Click (PPC) advertising, content marketing, email marketing, and social media marketing. The rationale behind online business is to leverage the internet to conduct business activities in a way that is scalable, accessible, and cost-effective. It encompasses selling products and services, marketing, managing customer relationships, and handling logistics, all within the digital realm. Online businesses can reach a global audience, operate 24/7, and adapt quickly to changes, offering significant opportunities for growth and innovation.
With high mobile phone usage, particularly smartphones, many online shops in Ghana are adopting a mobile-first approach. This is because most Ghanaians access the internet through their phones rather than desktop computers. Mobile money services like MTN Mobile Money, Vodafone Cash, and AirtelTigo Money are widely integrated into online shopping platforms, making it easier for customers to make payments.
The COVID-19 pandemic in 2020 also accelerated the adoption of online business in Ghana as many brick-and-mortar businesses were forced to go online to survive. This period saw a dramatic increase in the number of businesses establishing an online presence.
Many businessmen and women have various reasons for venturing into the online market, compared to traditional brick-and-mortar businesses, online businesses often require lower startup capital. You can avoid costs associated with physical storefronts, such as rent, utilities, and in-store staff.
Digital marketing channels like social media, search engines, and email marketing offer cost-effective ways to reach a large audience compared to traditional advertising methods. Online businesses are not limited by geographical boundaries, allowing you to reach customers around the world.
This expands your potential customer base far beyond what a physical store could achieve. Also, online businesses can operate around the clock, providing products or services to customers regardless of time zones, and increasing sales opportunities.
Running an online business in Ghana presents several challenges, despite the growing opportunities in the digital marketplace. These challenges can impact both new and established businesses. The cost of data remains relatively high for many Ghanaians, making it difficult for consumers to frequently engage in online shopping or for businesses to maintain robust online operations.
Many consumers in Ghana are still wary of online transactions due to fears of fraud, scams, and identity theft. This lack of trust can deter people from making online purchases. Ensuring the security of customer data is a significant challenge for online businesses. Breaches or perceived vulnerabilities can damage a business’s reputation and customer trust.
While mobile money has made digital payments more accessible, there is still a lack of integration with international payment gateways like PayPal. This limits the ability of Ghanaian businesses to sell to international customers.
Ghana’s infrastructure, particularly in remote areas, can pose significant challenges for logistics and delivery. Poor road conditions and unreliable postal services can result in delays and high delivery costs. the lack of a standardized addressing system in many parts of Ghana makes it difficult to ensure accurate and timely deliveries, which can lead to customer dissatisfaction.
Consumers in Ghana tend to be price-sensitive, and with the availability of multiple sellers online, competition on price is fierce, squeezing profit margins. Customers expect fast and responsive service when shopping online.
Delays in responding to inquiries, processing orders, or handling returns can lead to negative reviews and lost business. Managing returns and refunds is often more complicated in online businesses, especially in cases where customers are dissatisfied with the product they receive. Ghana’s economy is subject to currency fluctuations, which can affect the pricing of goods, especially for businesses that import products or sell to international markets.
Speaking to some online vendors in Accra, The High Street Journal realized that a number of them are in the age gap of 20 to 40 years. Indicating a fraction of the younger generation popularly known as Gen Z, and the Millennials are actively involved in the online business. This illustrates that the online market has a target customer base who are internet savvy and can easily navigate through the online process.
For many vendors, the transition from the retail brick-and-mortar shop is mainly hindered on the high rent fees and other costs that comes with renting apartment stores in Accra, which crippled most of them. Imagine paying an average fee of 3,000 cedis to 4,000 cedis per year with no guarantee of making returns by the end of the year. This has made most youth involved in retail stores divert to online.
In our interactions with Abby Ranny, a thrift clothing vendor with an online presence as well as a walk-in shop in Accra, she stated that her business started online before she transitioned to the walk-in shop, unlike the normal trend of the opposite.
Miss Ranny mentioned that she wanted a wider and diverse market – her reasons for venturing online first, then later gaining public trust by letting them know her domain and point of sale to also attract prompt and impulse buyers and other groups who are not interested in doing business online.
Although the online side of the business is lucrative, the struggles with incidents of online fraud and scammers make it difficult for clients to give her complete trust.
“Even if you decide to offer payment on delivery, some customers tend to disappoint the seller by not taking the order making the seller lose rather has to pay the delivery fee for which items that weren’t delivered. This puts the retailer in a tight position whether to offer the service of making payment online or payment on delivery,” she said.
For Abby Ranny, even though her rent for the shop she operates is 700 cedis a month (which is relatively cheaper as compared to other places), her profit margin is relatively low as compared to the online side, making it her best bet for her monthly returns.
Ernestina Oware, another vendor is into the production of hand-woven kente fabrics for both men and women. She transitioned online because she was selling at home and could not handle the risk involved with customers trooping in and out of her house at the time.
Her reasons for adopting the online trend, is simply to offer convenience to clients,, especially during the covid-19 era, which boosted her brand to a wider audience.
“We have been able to reach people we never thought of, like foreigners who reach out to purchase without them knowing you from scratch, they trust you, knowing well you will be able to deliver, she told the High Strret Journal, adding that however “you are at risk of scammers impersonating you and start defrauding your customers, when that happens you lose clients and your reputation will be on the line.”
The online business has however not been rosy for Miss Adjoa a young trader in women’s fashion and accessories. Her case is quite different from the rest. She rents a shop in the heart of the capital, Accra where the amount is ridiculously high – paying 200,000 cedis upfront for 5 years and a yearly rent of 3,000 cedis for the same space.
Aside from dealing with that, she has not made much strides in the online business. “I’m not getting an online audience and purchase, I recently advertised through IG and only got a single purchase after spending $40 for the ads which is a loss as compared to clients walking into my shop to purchase,” she said.
Though clients walk in from time to time, the business is not all that profitable as she needs to make interest on her expensive rent of 5 years. The one thing with getting a physical shop in central town is the harassment from tax collectors of all kind, GRA popping in at any point in time to pay tax when we’ve already paid at the port, we are also at risk of theft from all these ‘jigolo’ boys,” she added.
Venturing into online business presents numerous benefits, including lower startup costs, global reach, scalability, flexibility, and access to valuable data. With the increasing shift toward digital consumption, the online business environment provides a fertile ground for innovation, growth, and success.
Entrepreneurs and businesses can take advantage of these opportunities to build sustainable and profitable ventures. However, while online businesses offer many opportunities, they also present several challenges that entrepreneurs must navigate. These include high competition, dependence on technology, security concerns, and logistical challenges. Successful online businesses must continuously adapt to these challenges, investing in technology, marketing, and customer service to thrive in the digital marketplace.
