This document discusses opportunities and challenges of e-commerce in Ethiopia. It contains 4 chapters. Chapter 1 introduces the topic and outlines the objectives and limitations of the study. Chapter 2 provides a literature review on e-commerce definitions, types, advantages/disadvantages and the current situation in Ethiopia. Chapter 3 describes the research design methodology to be used. Chapter 4 provides a conclusion and discusses implementing a new e-commerce platform in Ethiopia called "GULIT" to provide food and other goods through online ordering and payments while connecting with local farmers and businesses. The platform aims to build trust, offer credit options, and promote locally to drive customer uptake of e-commerce in Ethiopia.

1. Table of Contents
CHAPTER ONE................................................................................................................................2
1.1 Introduction ............................................................................................................................2
1.2 Statement of the problem .........................................................................................................3
1.3 Objective of the study................................................................................................................4
1.4 Limitation of the study...............................................................................................................4
CHAPTER TWO................................................................................................................................5
2.1 Introduction ..............................................................................................................................5
2.2 What is e-commerce? ................................................................................................................5
2.3 Advantage and Disadvantage of E-commerce..............................................................................6
2.4 Types of E- Commerce..............................................................................................................6
2.5 Background of E- Commerce.....................................................................................................8
2.6 Customer uptake on E-commerce...............................................................................................9
2.7 E- commerce platforms in Ethiopia.............................................................................................9
CHAPTER THREE..........................................................................................................................10
3.1 Research Design...............................................................................................................10
CHAPTER FOUR............................................................................................................................12
4.1 CONCLUTION.......................................................................................................................12

2. CHAPTER ONE
1.1 Introduction
Electronic commerce or Ecommerce refers to a wide range of online business activities for
products and services. It also pertains to any form of business transaction in which the parties
interact electronically rather than by physical exchanges or direct contact.
E commerce is usually associated with buying and selling over the internet, or conducting any
transaction involving the transfer of ownership or rightes to use good or services through a
computer- mediated network. Though popular, this definition is not comprehensive enough to
capture recent development in this new end revolutionary business phenomenon.
And more complete definition is: E- commerce is the use of electronic communications and
digital information processing technology in business transaction to create, transform, and
redefine relationships for value creation between or among organizations, and between
organizations and individuals.
Globalization and information technologies (IT) are radically changing the face of business and
organization. IT are being adopted and incorporated into nearly all organizations, which have
invested heavily in IT infrastructure for the overall success of their business.
There is a growing interest in the use of electronic commerce (EC) as a means to perform
business transactions. For many businesses, it has become a priority. Through using EC,
companies are able to connect with their trading partners for “just in time production” and “just
`in time delivery” which improves their competitiveness globally. There is no universal accepted
definition of EC.
The definition given by kalakota and whinson based on the following
 From a communication perspective, EC is the delivery of information, products/services,
or payments via telephone lines, computer networks or any other means.

3.  From business process perspective, EC the application of technology toward the
automation of business transaction and work flow.
 From a service perspective, EC is tool that addresses the desire of firms, consumers and
management to cut service costs while improving the quality of goods and increasing the
speed of service delivery.
From an online perspective, EC provides the capability of buying and selling products and
information on the internet and other online service.
EC is an exciting for research, because of its relative nobility and exploding growth.
1.2 Statement of the problem
Nowadays, the world continues to witness a revolution in the way business is conducted, and
the uncharted area of e-commerce presents many opportunities and challenges to the newly
emerging world economy. The growth, integration, union, and sophistication of information
communication technology are changing our world.
E- commerce benefits internationalization in two ways. The first one is as noted in price water
house coopers (1999) there is a direct substitution of e-business technology and processes for
physical locations, manual processes, or other expediting function. The second, e-commerce
reduces coordination costs. Use of the internet lowers communication costs, reduces the length
of time-to-maker for goods and services, makes possible the delivery of information in a digital
format, reduces transport and distribution costs and allows for more fully integrated and broader
business alliances (international trade center, 2009).
It is known that, although the cost of using information and communication technologies for
economic development is high, the cost of not doing so is likely to be much higher. Thus all
sectors of a given economy should aware themselves to application of ICT. Import sector as part
of trade subsector of Ethiopian economy should be competitive not only at home but also
internationally.
The researcher believes that at present there is low adaption of e-commerce as well as the fully
fledged e-commerce has not yet been achieved by Ethiopia business to business commerce. In
other words, 7 days a week , 24 hours a day have not yet implemented and this condition is well
understand by the researcher. Therefore, by understanding this condition the research aim is that

4. opportunities and problems associated with e-commerce, will contribute to filling the gap
identified.
According to this, this research will investigate the opportunities and practical challenges of e-
commerce. Depending on the above condition the researcher use some core questions on the
area.
1. What are the main opportunities to adopt and implement e- commerce
2. What is the current situation in Ethiopian context
3. What are benefits and risk of e-commerce consumer uptake
1.3 Objective of the study
The main objective of this research will assess the current practices, opportunities and
challenges of e-commerce on consumer’s uptake in Addis Ababa.
 Will identify the main opportunities and challenges of e-commerce
 Will identify the main challenges that hold back the development of e- commerce
 Will review the existing e-commerce practice
 Will suggest an action to be taken and promote e-commerce in Ethiopia
 Will build awareness on consumers acceptance about e-commerce
1.4 Limitation of the study
The researcher may face absence of well organized and documented information with regard to
e-commerce in Ethiopia and the shortage of reference materials about e- commerce practice in
Ethiopia.

5. CHAPTER TWO
Literature review
2.1 Introduction
Internet has major influence on the globe because it can serve billions of users all over the
world..Internet has the door for ecommerce.
Ecommerce, is the purchase and sell of goods and services over the internet. Business have their
website which allow consumers to browse products and services. Consumers then purchase the
goods and services using varies methods (example: credit card .debit card, PayPal) via the
website. Finally the business ship the orders to the consumers door steps. Consumers are also
able to track the status of product or service ordered as needed. all of this activities are conducted
online.
Networked economy business treats can be create value largely through gathering, sensitizing
and distribution of information. Whereas, formulates strategies that make management of
enterprises and technology convergent, compete in real time rather than “ cycle time” , operate in
a world characterized by low barriers to entry, near/zero variable costs of operation and shifting
competition and organize resources around the demand side rather than supply side, manage
better relationships with customers through technology.
2.2 What is e-commerce?
Electronic commerce is a growing aspect of business community. It advances in the internet in
other telecommunication technologies have opened new frontiers in communication, commerce,
politics and almost every other aspects of private and public life.
Development of e-commerce highly depends on the levels of technical, managerial, economic,
social, cultural and political aspects. Particularly its development directly correlated with the

6. development of information communication technology. The main vehicle of e-commerce
remains the internet and the World Wide Web.
2.3 Advantage and Disadvantage ofE-commerce
Advantage
 Faster buying/selling procedures, as well as easy to find products.
 Buying/selling 247
 More reach to customers, there is no theoretical geographic limitation.
 Low operational costs and better quality of services.
 No need of physical company setups.
 Easy to start and manage business
Disadvantage
 Lack of reliability and security because of poor implementation
 Shipping problems
 Site crush
 No possibility of tried and tested product
 Late delivery
 Lack of privacy
 Severe competition
2.4 Types of E- Commerce
Business Consumer
B2B C2B

7.  Business to Business
Involves trade dealings between business where sell of merchandise is made to an
interim purchaser ( Pandey and Agarwal,2014)
- Refers to the full spectrum of e- commerce that can occur between two
organizations.
- This includes purchasing and procurement, supplier management, inventory
management, channel management, sales activities, payment management &
service & support. Ex- Free markets, Dell and General Electronic
 Business to Consumer
In this model the trade is conducted directly between company and consumers via a
website ( Dan, 2014 ).
- Refers to exchanges between business and consumers, like the once managed by
Amazon, Yahoo and Charles Schwab.
 Peer to Peer
This is the fastest growing type of e commerce. Business simply provide a platform
(i.e., www.ebay.com) to advertise the product, buyers can buy the product directly
from the seller, (Pandey and Agarwal, 2014). In the peer to peer model, businesses
facilitate the setting where consumers buy and sell goods and services directly to each
other.
- Exchanges involve transaction between and among consumers
- This can include third party involvement, as in the case of the auction web site
Ebay
 Consumer to Business
B2C P2P

8. In this model, customers sell goods and services to business and the corporations
purchase the products and services ( Nemat, 2011). Consumers provide value, and the
businesses consume that value.
- Involves when consumers band together to present themselves as a buyer in
group.
Business Consumer
2.5 Background of E- Commerce
History of e-commerce dates back to the invention of the very old notion of “Sale and Buy”,
electricity, cables, computers, modems, and the internet. E-commerce becomes possible in 1991
G.C when that was open to commercial use. Since that date thousands of businesses have taken
up residence at web site. One of the most popular activities on the web is shopping. It has much
Publishers order
Paper supplies from
Paper companies
Amazon orders
From publishers
Consumers
aggregate to bulk
purchase from
Amazon
Consumers buy
Thousands of Harry
Potter books from
Amazon
Consumers resell
Copies on eBay

9. attraction in it. Literally any one can have their pages built to display their specific goods and
services.
Although the internet began to advance in popularity among the general public in 1994, it took
approximately four years to develop the security protocols (for example, HTTP) and DSL which
allowed rapid access and a persistent connection to the internet in 2000 a great number of
business companies in the united states and western Europe represented their services in the
world wide web. At this time the beginning of the word e- commerce was changed. People
began to define term e-commerce as the process of purchasing of available goods and services
over the internet using secure connections and electronic payment services
2.6 Customer uptake on E-commerce
E-commerce is defined as buying and selling of products or services over electronic system
such as the internet and to lesser extent, other computer networks.
Its generally regarded as the sale and commercial function of e-business. There has been a
massive increase in the level of trade conducted electronically since the wide spread penetration
of the internet.
A wide varity of commerce is conducted via e-commerce, including electronic funds transfer,
supply chain management, internet marketing, online transaction processing, electronic data
interchange, inventory management system, and automated data collection system.
2.7 E- commerce platforms in Ethiopia
Its interesting time for e-commerce ‘industry’ in Ethiopia for many reasons. The COVID -19
pandemic while changing the world like no another phenomenon did perhaps after WWI and
WWII, it also showing Ethiopian consumers and regulators the relevance of efficient and well
built digital ecosystem. Suddenly buying goods and service online and paying your bills via
your devices is not a luxury any more.
A regulation called ‘Electronic Transaction’ that provides a legal framework for E-commerce
and other related aspects including e-receipts is on the final approval process.

10. CHAPTER THREE
Research design and Methodology
This section will describe the methodology undertaken in relation to justification of the research
Design and data collection on creation of new platform.
3.1 ResearchDesign
A research design, which is a function of the research objectives, is defined us, “Asset of
advance decisions that makes up the best plan specifying the methods and procedures for
collecting and analyzing the needed information” (burns and bush, 2002). I propose to study the
customer uptake of any given e-commerce application based on the value of proposition
approach: I suggest customer uptake as a function of the organizations ability to offer mobility
related value to the end user through a suitable business model. To illustrate how e-commerce
generates mobility related value band to drive some of the important defining characteristics of
e-commerce, I will consider first several examples which illustrate the role played by the e-
commerce entities (Platform, Application and Business model) in providing a value proposition.
In the case of platform entity, e-commerce related value is the capability to connect to the
network at any time and from any place.
In the case of application entity, a portal or another form of an intermediary hosts and supports a
mobile service. Additional mobility related value is created in specific context like mobile
banking is a service used in the context of anytime and anywhere. Another specific service
context is “Localization” like vehicle driver obtaining route directions (Bisdikian Etal, 2012).

11. The business model entity generates mobility related value by providing relevant and timely
content to a subscribed customer. An example of such model is a notification service where a
frequent train traveler pays a subscription to receive updates on train delays on his/her mobile
phone. The updates are generated by the railway company relayed to an SMS portal. Which
intern sends to the individual traveller. And customer can update his/her travel plans.

12. CHAPTER FOUR
4.1 CONCLUTION
 As per different researchers try to allocate different e-commerce model, I also try to
identify some of them under research design and select the best model that is emerging a
platform for my proposal and engaged on implementing new idea by generating new
website named “GULIT” which will serve different kind of human needs by their
category, including food on time base (daily needs, weekly, monthly and occasionally)
the platform payment method will be deducted from the customers debit card, credit
card, transfer from their account (mobile or internet banking) also it will have special
offers like discount coupons for special customers to motivate them and pave away from
my competitors by handling familiar consumers. For easily conduct with my customers
for selling product and service because nowadays it is so simple to connect to the
network at any time and make an order quickly.
 The measurable core thing in this platform is its uniqueness,
1. To make a very deep trust, after delivery the product that has already sold can be
returned.
2. The platform will have an option for familiar customer it will add a lending on buying
process. i.e. a very familiar customer can buy a demanded product by paying only 50% of
its price, in case of insufficient fund on his/her account or debt card. In this case a
customer can use hi/her credit card or make collateral his/her fund account (salary,
income account). To make a selling and buying process more secure for both parties.
3. My platform will deliver food consumptions from the scratch which means by
considering our population needs the platform will collaborate with farmers to collect and
buy the raw material because this platform will include selling of food raw materials like

13. Teff, wheat, Maize .. from them and also work with other food makers like ”baltina”
from them (shiro, mitmita,berbere, different collection of spices), from hotels (cooked
foods), restaurants and supermarkets.
 The platform (GULIT) as we all know this name is very common market name used by
our population so that the promotion will be easy to brainwash and motivate a new
customers to join the platform. As I think it is good to make a campaign rather than using
only a media promotion system, so I prefer to make a promotion on the road show.

14. .