Tuesday, September 22, 2020

Even in Botswana, Business can be a “click away”

Numerous reports have been compiled on Botswana’s internet infrastructure and despite the significant amount of money injected into its development the country’s internet connectivity remains a glaring limitation. Botswana Communications Regulatory Authority (BOCRA) found the country’s internet connectivity, penetration rate and speed to be relatively low. Even if Botswana’s population could grow exponentially overnight the level and quality of internet connectivity stacks e-commerce against great odds.

As a matter of comparison China is an example of e-commerce done right. China’s population is the propeller to the success of e-commerce, a trade which is proving to be unparalleled in the world. China’s size of internet users (netizens) was estimated at around 45 percent of its population of 1.4 billion people. Additionally, this country’s internet penetration rate was put at 53.2 percent. It was found that the most common device used to access the internet were mobile phones at about 81 percent, followed by desktops at around 23 percent and lastly laptops at 14 percent. The size of mobile netizens out of the total internet users was found to be 95.1 percent. These figures paint a picture of what is digitally happening in China as reported by the China Internet Network Information Center 2017 statistical survey on the country’s internet development.

Granted, the size of China’s readily available netizens contributes significantly to the success of e-commerce but it would be remiss to look at the feat of this form of trade simply through the eye of numbers. Though serving as an important enabler to the digital economy the numbers are only part of the magic behind its achievement. Looking at the bigger picture beyond the numbers could give countries such as Botswana, with a miniature population compared to China, the opportunity to acutely interrogate ways of building towards the realisation of e-commerce even with such an inherent limitation of a small population. This involves assessing the infrastructure behind China’s e-commerce and identifying areas where Botswana could focus on in the assemblage of the e-commerce masterpiece.    

Sun Ping, a lecturer at the Chinese Academy of Social Sciences used the example of Alibaba, China’s giant e-commerce company, to give context to the e-commerce components. First is the digital infrastructure, either website or App, which facilitates the interaction between buyers and sellers. Second is the financial settlement platform which provides the means through which buyers pay for products bought and traders receive money for products sold. Third is the transport system which facilitates the delivery of purchased products to the buyer. The real success behind China’s flourishing e-commerce is the payment solution embedded in China’s flagship social media App, WeChat.     

This is how it works. According to Walkthechat website, producers/traders can link WeChat Pay account to either their websites, Apps or WeChat shop. Buyers will as a result interact with the trader’s account through four ways. One, a trader embeds in App web-based payment into their WeChat shop, in that way when buyers make a payment, they will just need to enter 6-digit pin code or scan of finger print. Second, a QR code will be automatically generated by the WeChat payment system through which buyers just need to scan it with WeChat or Alipay to make the payment. Three, inside a physical store the WeChat payment solution can be connected with the trader’s POS system. The trader then scans the buyer’s payment QR code from the mobile phone. These settings within WeChat Pay enable financial settlement between buyers and sellers, a digital infrastructure which has not yet found its place in Botswana.

Botswana could, like countries such as Japan, Australia, New Zealand, West and USA integrate WeChat cross-border payment solution. This solution, according to walkthechat, was developed to help foreign merchants collect payments from Chinese tourists. It automatically translates the price into Chinese currency RMB so that the Chinese tourists can pay with WeChat wallet, and the foreign merchant can receive the payment in their local foreign currency. It is said that Tencent, the company that owns WeChat, is actively looking for payment solution providers to help bring WeChat cross-border payment to other countries. There is however a requirement which seemingly disqualifies Botswana, at least for now. “As long as you have a physical store in a popular Chinese tourist destination, it is possible to setup in-store WeChat cross-border payment,” states walkthechat. Though Chinese travel to Botswana regularly, the country isn’t necessarily a popular Chinese tourist destination. The other option would be for Botswana to build and develop its own payment solutions with similar capabilities as the WeChat Pay or better. This would provide the needed thrust to e-commerce uptake in the country. With the financial settlement facilitation guaranteed this would then provide the much needed impetus to improving the transport system in the country to a level that will make delivery of goods sold efficient and cost effective. China’s swift and sophisticated transport system is also a large part of the fire behind her e-commerce. For Botswana to arrive where China is she would have to pay heed to the crucial digital infrastructure which would simply put to use the existing state of the art physical internet infrastructure.

Despite that China is leading the pack in e-commerce the country continues to actively connect more of its people to internet. The Chinese government committed to ramping up internet connectivity to 85 percent of the population to 4G mobile internet by 2020. In fact it was recently reported that superfast data speeds networks at 5G are currently under pilot stage. On the other hand Botswana took the bold and forward looking step of establishing world class internet infrastructure but it would appear that it faltered in taking it all the way to make connectivity readily accessible to people. The move towards increasing internet connectivity would pay off. A study by Steve Esselaar and Sebusang Sebusang found that mobile phone ownership penetration was 80 percent in Botswana, the second highest penetration percentage among the 12 African countries, coming in behind South Africa. This is because 95 percent of internet subscribers in the country are connecting via wireless mobile services, which would result in dramatic uptake of e-commerce. Botswana in that regard presents an ideal environment for e-commerce to thrive but the reality is she is not remotely close to taking advantage of such an opportunity. The reason is that e-commerce needs a combination of things to be available and the ones missing starkly from Botswana’s landscape is the digital infrastructure that allows interaction and payment capabilities between buyers and sellers.

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The Telegraph September 23

Digital edition of The Telegraph, September 23, 2020.