E-Commerce Institutionalisation in Mozambique: Enablers and Barriers

Electronic commerce (e-commerce) has been widely discussed in academia and practice over the past years, however, its application in the specific context of women led small medium enterprises (SMEs) in developing countries has been scanty. This study aims to respond to this paucity by investigating the process of e-commerce institutionalization among women-led SMEs in Mozambican context. Using the Perceived E-readiness Model (PERM) as a sensitising lens and following an interpretive paradigm; the study identifies organisational and external factors that are perceived to be enablers and hindrances towards E-Commerce adoption and institutionalisation in women led SMEs.


Introduction
Small and Medium Enterprises (SMEs) in developing countries are considered the prime providers of job opportunities.On the African continent, SMEs account for up to 50% -70% of employment opportunities [1] and are a key source of creativity that drives economic development of the continent.It is, therefore, not surprising that many governments, academics, donors, and development organizations are paying more attention and engaging in mechanisms to promote this category of business [2,3].One of the potential mechanisms is the usage of e-commerce by SMEs -which provides the potential for them to cope with some of the traditional barriers that hinder their professional growth, and consequently, reduce transaction costs, increase profitability, productivity and efficiency, and gain access to new markets [4].
Although these benefits to SMEs are well recognised, few studies have explored the use of e-commerce among women-led SMEs in developing countries despite the understanding that women-led SMEs, are beneficial from a social perspective and economic empowerment for women and their households [2,5].Women's participation in economic activities not only reduces the likelihood of household poverty, but it also improves the distributional dynamics within the household and society because economically active women are more likely to reinvest their profits in their families and communities [5,6].With this backdrop as a rationale, and the fact that the United Nations World Trade Organization identifies the need to 'take forward the issues emerging in the discussion and the evolving application of e-commerce to enhance economic/development opportunities, with a special consideration of the situation in LDCs' [7]; this study seeks to explore e-commerce institutionalisation in women led SMEs in LDCs and seeks to answer the question: What factors influence e-commerce institutionalisation in women led SMMEs in developing countries?This study is a response to authors [8,9] who persistently called for additional studies that can provide a better understanding of contextual elements that affect e-commerce institutionalisation process in developing countries.This study is set in the context of a least developing country -Mozambique, where there is a scarcity of accurate ICT and e-commerce data and e-commerce adoption is still in its infancy stage and.In 2003, e-commerce activities were almost non-existent, and only very few enterprisesmost of which were not owned by locals [10].This has since improved substantially: e-commerce activities are now more common in large corporate entities and also some SMEs in the capital city, Maputo, which is relatively well supplied with telecommunication and Internet infrastructure [11].To be considered an SME, the enterprise should have between 1 and 99 employees and record an annual turnover of less than 29 million Mozambican Meticais [12].The rest of the paper is structured as follows: Section 2, presents related work on E-Commerce, Section 3 illustrates the methods employed to carry out the study.Section 4 presents the findings and discussion thereof.Section 5 concludes the study.

Related studies on e-commerce adoption in developing countries
E-Commerce is often characterized as a mechanism through which parties interact electronically to conduct business, regardless of their resources and constraints [13].The adoption of e-commerce in Africa has been experiencing a serious growth spurt.However, its penetration is not evenly distributed; much of the success reported in the literature concerns only the biggest economies of the continent, such as Egypt, Kenya, Nigeria, and South Africa, [14,15].Other countries on the continent have been slower in their adoption process.This is not surprising as the continent is home to 33 of the world's 48 Least Developing Countries (LDCs) [16].LDCs are countries with very low national incomes facing several problems spanning low economic growth, high levels of unemployment, low income per capita, poor infrastructural development, and weak institutional capacity [17].Given these contextual challenges, the factors affecting the adoption of e-commerce for these countries, and their counterparts, such as the biggest economies of the continent and other developing countries, could potentially be different.Understanding these differences is important for negotiating context specific solutions.[18] proposed the PERM model which gives an assessment of organisational and environmental readiness of an organisation for e-commerce adoption in a developing country context.According to the PERM model, organisational factors that hinder e-commerce adoption in developing countries include: the perception of e-commerce elements in the organization, availability of resources, management commitment and the strategic and operational model that small businesses use to govern their business operations.Three main environmental barriers to e-commerce adoption and institutionalisation have generally been cited in literature: government's readiness to promote and support e-commerce, readiness of other members of the business ecosystem, such as consumers, suppliers, and competitors, to adopt e-commerce; and the existence, development and cost of support-giving industries such as telecommunications, finance, IT and others whose activities affect e-commerce initiatives in developing countries.

Molla and Licker
There are two categories reflecting the e-commerce maturity of an organisations: (1) organization in their initial adoption phase or entry-level adoption; and (2) those that have reached instituionalisation phase.The former reflects organisations that have considered E-Commerce but only connected to the Internet with email but no web-site or have a static website that publishes basic company information on the web without any interactivity.The latter reflects organizations whose extent of adoption accepts queries, e-mail and form entry from users; performs online selling and purchasing of products and services including customer service; and integrates organizational systems with suppliers, customers and other back office systems allowing most of the business transactions to be conducted electronically [18].The PERM model and the maturity level of an SME will be used as a sensitising lens for this study when examining the e-commerce phenomenon in Mozambique.

Methodology
The study followed an interpretivism paradigm.SMEs were a purposively sampled, to allow for the selection of information-rich SMEs for study and specifically those that have gone through the experience of adoption and in some case institutionalised e-commerce.All SMEs that were selected were from Maputo -the capital city which has the highest urban population and concentration of SMEs in the country.It also functions as the central hub of the Mozambican economy, with most of ICT services and providers located therein.Initially, sixteen SMEs were originally contacted.Five of the contacted SMEs did not respond, and of those that did respond four were not suitable -two of them were not owned by Mozambicans and the other two had less than one year of establishment.Resulting in seven suitable SMEs that agreed to participate in the research.One of them was omitted from further analysis, due to providing incomplete information.Data collection with the remaining SMEs followed face-to-face semi-structured interviews that were informed by the PERM Model, seeking organizational and environmental eReadiness factors of SMEs to engage in Ecommerce activities.All the interviews were conducted by the first author in Portuguese, the official language of Mozambique.Thematic analysis was employed for analysis.First, the data was transcribed and then translated into English by the first author who is fluent in both languages -English and Portuguese.After transcription, the data went through a process of coding to identify emergent themes across the data corpus.Themes were identified by examining i) recurrence of meaning; ii) repetition of the same text/data; and iii) text salient to the research topic.

4.
Findings and discussion

Demographic findings
Six SMEs participated in the study as documented in Table 1.In terms of business size, 67% of the SMEs had less than 50 employees.Majority of the SMEs were in operation for 2-5 years, while only one operating for more than 20 years.The average age of the business leaders is 35 years old.The high level of education level was a common characteristic among the women that led these businesses; with the exception of one of them (SME_E), all of the women have completed higher education, with some having a post-graduate level.SMEs were categorized according to their level of e-commerce institutionalization, following Molla and Licker's [18] e-commerce maturity model for developing countries.None of the SMEs had reached an integrated stage, while four of them were in a transitive stage (SMEs with the capability of processing transactions online) and the other two just in an interactive stage (SMEs with basic capabilities, such as having a web presence accepting online queries form from users).

Emergent themes
The findings show that six organistional and nine external factors are significant when it comes to adoption and institutionalisation of E-Commerce in women led SMEs in Mozambique.

Organizational Context a) E-commerce and related technologies in use
SMEs in Mozambique use four types of technologies to conduct and fulfil their business transactions: the website, emails, mobile phone, and social media.Mobile phones were the common medium used by most SMEs because it was seen to be particularly useful and reliable to perform business functions.We can directly communicate with customers at any time or location (SME_F).Even SMEs that had reached transitive e-commerce maturity, mobile phones were still perceived to be the most effective means.According to these SMEs, the push was from their customers who often preferred mobile communication usually via a mobile phone call or texting service, specifically WhatsApp messages.For example, the manager of SME_B estimates that only 15% of the total transactions are completed without a mobile phone call or email prior interaction.She explains: "Customers have the habit of calling, email or send Facebook messages before finalizing any transactions.So after all the effort, money and time spend in providing a complete online experience; I realized that my customers still preferred to interact with me first, or see the product first before completing the payment".These findings are consistent with prior studies where e-commerce was perceived by SMEs to be a mix of a static website and mobile payment capability [19,20].Whilst the mobile phone seems to be the commonality amongst these findings; what differentiates the findings in the Mozambique context is in the use of the mobile phone.In this context, the mobile phone was not used to perform payments on transactions, despite the presence of mobile payment technologies such as M-Pesa, but solely for communication purposes.The most utilized methods of payments were bank transfers and cash-on-delivery because mobile payment technologies cannot be found in every region here.There are some regions that have no such technologies (SME_A) The use of social media was also widespread amongst SMEs and seen as a means to build relationship and trust with potential customers.The most common feature identified to be useful from social media was customer's reviews about their products.This feature was perceived to be a marketing tool for their products as the manager of SME_F explains: "The customer usually leaves a message or a comment on the picture on Facebook saying that they like the dress.We, then give them my number of the contact, and we continue to communicate in private about price, size, fabric and other details." SME_B has used the popularity of Facebook and Instagram to create a community of followers that would at a later stage become potential customers.By using such platforms, they were able to build and maintain a good relationship with the customer as she explains: "My posts became so popular that everyone wanted to buy the products I used in my hair, we only sell products that we have already tried and tested."The value of social media to increase public awareness of e-commerce has been confirmed through the literature [21].However, in this study, not all SMEs were enthusiastic about social media.For instances, SME_D and SME_E, which are mainly service providers did not perceive social media as an adequate channel to interact with their customers.b) Manager characteristics and attitude One of the factors that differentiated how SMEs perceived E-Commerce and related technologies was age.SMEs led by relatively older women (SME_D and SME_E) were less knowledgeable and enthusiastic about more advanced forms of ecommerce.These SMEs were mainly at the interactive stage of E-Commerce whilst SMEs led by relatively younger women had advanced to the transitive maturity stage of E-Commerce.The implications therefore is that younger generations are more likely to take risks and try new technologies than their counterparts [22].Surprisingly, all owners-managers are well educated, with only the manager of SME_E having the lowest qualification of a high school leaving certificate.Given that the SMEs were randomly selected, this is an interesting finding in a country where the percentage of the population with higher education is only one percent, and adult education levels among women are at a much lower rate than men [23].
c) Prior experience with E-Commerce It was observed that some of the women in the study had the opportunity to study or work abroad and these experiences shaped their decisions around E-Commerce.In most of the cases, the desire to mimic international e-commerce success stories was one of the main drivers to institutionalize e-commerce as SME_C explains: While I was studying in Brazil I use to buy everything online even groceries.It was all so convenient and easy, then made me realize that nothing similar was available in my country yet.So when we started I wanted to give my customers the same experience.".Given their expirience with more advanced forms of e-commerce, these women were able to use their intellectual capital and experience to effect change in how they do business.This is consistent with Showunmi, et al. [24] who posits that women who have education, and possibly from a higher class have more sense of possibility and personal power than women who have not been provided with such opportunities.
d) High costs and E-commerce benefits inadequate for continued investment SMEs in this study report minimal benefits were realised from E-Commerce.SME_F, had not updated their website since the time it was set-up because the revenue generated did not justify further investments: "only clients from abroad buy through our website, and they are not so many.So we do not have money to do upgrades; people from here are more on Facebook, Instagram and WhatsApp, it is fine like that".At the time that the interviews occurred one of the SME_A's website was offline, the manager indicated that their security certificate was outdated due to lack of payment and they were looking for cheaper options.According to her "It costs us more than 500 USD per annum for the security certificate, I am looking for alternatives, the number of sales completed through the website do not justify this cost.".SME_B who usually maintains their websites lamented that: "After all the effort , money and time spend in providing a complete secure online experience, I realized that my customers still preferred to interact with me first, or see the product first before completing the payment.it costs four to five times more to have a website hosted local than in an international domain, so I chose to save and host abroad"".These findings are consistent with prior studies which suggest that cost is a barrier to E-Commerce and SMEs in Africa primarily use website for marketing purposes, even when transactional capabilities are available [25].
e) Lack of internal expertise One of the consistent claim from respondents was the lack of internal skill set to implement the e-commerce project.With the exception of SME_A, the remaining SMEs used consulting firms for support and maintain their e-commerce applications within the organization.The manager of SME_D explained that: "IT is not our expertise, so we chose to subcontract all the IT services.And we assign someone to update the website and serve as the link of contact with the IT firm, however she also has other duties in the company".From prior studies, internal expertise has been shown to be a challenge for most SMEs.

External context a) Institutional policies and legislation to support e-commerce
There was a common perception amongst SMEs that there was limited and, in some cases, nonexistence support from government when it came to E-Commerce and related technology adoption.According to SME_B, government intervention is very recent: "After many people have lost their money with scams, and the police were not able to help, our lawmakers have finally enacted a law to regulate the online transaction."SMEs also considered the role of the government to encompass more than just to provide a legal framework for business conduct.Issues of financial assistance, provision of reliable network infrastructure, specific training on ICT/ecommerce, and reasonable Internet access costs were cited as important prerequisite for E-Commerce success.SME_C manager explains: "it is difficult to raise capital, to be honest we used our own money to start the business... to secure a leasing for the vehicles we used my husband assets as collateral.Otherwise I don't think we could have got a loan, banks here don't like to give loans to small enterprise…this is why we need financial assistance from the government".The role of the government's interventions in policy formulation, regulation, and facilitation of e-commerce has been well described in the literature and yet in the Mozambique context, government maintains a hands off policy by providing minimal support such as entrepreneurship training that is not specific to electronic use of ICTs and E-Commerce.Hu, et al. [26] see the "hands-off" policy approach not being appropriate for the contextual realities facing developing countries.b) Financial institutions not ready for e-commerce transactions SMEs were of the view that supporting institutions and specifically banks were not well equipped to provide the necessary support for e-commerce such as providing secure and reliable methods of payment.SME_C confirms "can you believe that only BIM has direct payment online using EFT?Of all the banks, only they were able to provide even debit card payments.While this is already so common in other countries".The manager of SME_B reiterates on the lack of electronic and secure methods of payment: "electronic banking?Not fully, the payment system is not fully automated in our banks.Only for credit cards, and very few people use credit cards."Due to these challenges, some websites only accepted credit cards, bank deposits or PayPal.However, credit cards are not widespread among the local customers.This is expected in a country with very low levels of financial inclusion, where 60% of adult population are financially excluded [27].Given that mobile payments are not widely spread across the country, only 10% of the adult population makes use of mobile payments.The manager of SME_E described how bank transfers added an extra burden to the process: "majority of our customers make EFT transfers directly to our bank account.However, we take caution when receiving money from a different bank, there is a one or two days wait for the money to reflect in our account.In the past we had some unfortunate events and are unable to make the next stock pile payments".While direct bank transfers are not a dominant method of payment in the e-commerce literature [28], in the case of the SMEs in this study bank transfers enabled them to fulfil their activities but also was perceived as a hindrance when recovering payment because for SMEs who usually face financial difficulties, any payment received is crucial in enabling their future transactions such as purchase of next supplies as pointed out by SME_E.c) Lack of transportation infrastructure and postal addresses The common grievances from SMEs was the lack of conducive physical infrastructure such as roads to deliver their customer's products and delivery addresses.Most of the SMEs only arranged delivery services for customers making large orders or living in the surrounding areas, as the costs associated with delivery are very high.The manager of SME_E explains: "There is no way I can deliver only one cake to a client in Matola, it is just too expensive and time-consuming.Because many neighborhoods don't have street numbers, our driver had to call and ask the client to direct him to his or her residence.We tried to do that for a while, but we are no longer doing it.We only deliver for enterprises, which are normally located here in the city…this now limits our target market."These results confirm other studies, in which lack of street names and postal numbers inhibited e-commerce development [13].Whilst this remains a challenge, new evidence show that this can be addressed using for example couriers riding motorbikes, which are in constant contact by mobile phone with the customer until the delivery is completed [29].d) Minimal ICT expertise professionals in the market SMEs reported scarcity of ICT firms and professionals with software development expertise in the country, as described by the manager of SME_B: "I did not find local providers able to implement all the technical features we wanted.I wanted the full package but I felt they were just wasting my time" However, it was noted that, SMEs that did not have e-commerce at the core of their business -SME_D, SME_E, and SME_F -did present less complains about the services received by local firms.e) Low customer purchasing power SMEs in this study reported minimal pressure from local suppliers and customers.Although there was demand from local costumers -particularly those living outside the capital Maputo-the market size was still perceived to be relatively small.In addition to the small market, customers were perceived to have a low purchasing power that is being exacerbated by the economic recession that is affecting the country since 2015 as SME_A explains: "2015 and 2016 were tough years for us and most small business, we were losing clients, we had to reduce or cut investments in various new projects, we just entered in surviving mode" f) International suppliers and customers In some of the SMEs, business relationships with international partners helped to shape their e-commerce activities.For example, SMEs A, B, and F that have the majority of their suppliers outside of the country, felt more pressured to adopt modern ways of conducting business; whilst their counterparts with local suppliers and consumers did not have the same pressure.As outlined by SME_D, some of their suppliers were so reluctant to modern business practices to the extent of only accepting cash payments: "suppliers are an issue, only very few have a more practical approach.For the others, we still have to go there by ourselves every time, some even don't accept POS, or electronic transfer, they want cash, it is a nightmare" g) Gender stereotypes All owner-managers were unanimous about the impact of societal gender stereotypes to their businesses.Nonetheless, it was noted that SMEs operating in sectors that are traditionally male-dominated faced more adversities.This was the case of SME_A, SME_C, and SME_D, that described how they face prejudice when dealing with potential customers.This lack of confidence from business partners was perceived as detrimental for the business.To circumvent this obstacle, SMEs managers resorted to strategies such as: employing male business partners or working with their husbands.As SME_D detailed: 'when I invited two former male colleagues as senior partners, previously closed doors suddenly opened".SMEs that operated in traditionally female-dominated industries acknowledged the practice but did not view it as a significant problem.These findings echo those in literature and show that socio-cultural expectation about the roles women play in a society further exacerbate these challenges [2,30].
h) Bargaining and the need for feel and touch Suppliers and customers preferences have dictated the direction of e-commerce in the selected SMEs.Customer's push for face to face or mobile phone calls prior to making a transaction was common (SME_B).For example, habits such as inspecting products or extensively discussing the service before payment, and the social connection created by physical shopping are difficult to emulate in an online environment.These customs have shaped the form of e-commerce being employed in most SMEs, which is based in one or a combination of mobile phone, e-mail, social media and website, and offline communication.These findings are consistent with those of other studies which suggest that some cultural practices do affect ecommerce adoption and institutionalisation [31].
i) Information sharing The willingness to share information and advice is another feature in Mozambican social scenery that is perceived as beneficial for e-commerce.According to the interviewees, it is common to socialize with business partners to strengthen business relations, sharing information and even mentoring other women in business.For example, SME_D runs a mentorship program for women in the informal sector, SME_A and SME_C often interact regarding business opportunities.This accords with previous literature [32] which states that in general women managers are more comfortable in disclosing information, engaging in informal conversations, and have a higher sense of collectivism.Taken together, these results highlight the importance of the social-cultural context to e-commerce.Entrenched social norms dictated the direction of e-commerce in many developing countries.

Summary of findings
The findings of the study show that e-commerce in the Mozambique context is constrained and enabled by both organisational and environmental factors as shown in Fig. 1.What differentiates some of the findings in this study from previous studies, are some of the specific enablers and hindrance factors.Whilst most countries are now using mobile payments as a means of facilitating electronic transactions, and consequently enabling e-commerce; findings in this study show that mobile payments were not a common practice for most SMEs because of the low penetration rate.The lack of mobile payments was therefore perceived as a hindrance towards e-commerce.Three unique enablers of e-commerce in this study were (i) the manager's prior experience with e-commerce; (ii) SMEs information sharing practice; and (iii) international market force.Being able to see how e-commerce worked and the benefits derived from it, gave these managers the aspiration of having E-Commerce institutionalised in their business.Prior experience in a developed country context was therefore a strong facilitator of manager's commitment towards E-Commerce institutionalisation. Instead of perceiving other SMEs as competitors, SMEs in this study were able to share their experiences.Information sharing amongst the various SMEs allowed them to share knowledge and become aware of new technologies that they could use to facilitate the growth of their business.In the absence of government support, these mentorship programs from other SMEs were perceived to be useful and enablers of e-commerce.Finally, it was evident that international suppliers and customer's pressure played a key role in ensuring SMEs were able to transcend to more mature forms of e-commerce.SME_A, and SME_B for example were able to very quick attain a transactional form of e-commerce through this interaction.

Conclusion
The purpose of this study was to investigate the contextual factors that shape the process of e-commerce institutionalization in women-led SMEs in the Mozambique context.Following an interpritive paradigm, the findings identify organisational factors, specifically the manager's prior experience with e-commerce; and the SMEs information sharing practice as being enablers of E-Commerce adoption and institutionalisation.Further findings indicate that international market force, one of the environmental factors is an enabler whilst current government and supporting institutions were perceived as hindraces to E-Commerce.These findings extend the existing debate of e-commerce and use of ICT for development in LDCs by providing a better understanding of contextual factors affecting women led.This is particularly important because the literature on e-commerce in LDCs tend to be generalized while studies have shown that women in this context face a different set of challenges when conducting business.Furthermore, the study makes a great contribution to the scarce literature about e-commerce in Mozambique.

Fig 1 :
Fig 1: Factors influencing E-Commerce adoption and institutionalization in Mozambique

Table 1 :
Demographic details of SMEs