E-commerce (electronic commerce) refers to the activity of electronically buying or selling of products on online services or over the Internet as defined by Wikipedia. People are able to make purchases from anyplace as long as they have access to a website or mobile application and stable internet devices.
According to datareportal, Rwanda has an estimated population of 13.2 million people and approximately 3.31 million have access to the internet which is most commonly via mobile phone. Internet access and speed are greatly improving and this is basically driven by the rollout of a national 4G LTE network and fiber optic lines.
The government in Rwanda is committed to developing ecommerce and has put in place measures to protect users of online services by adopting global standards like the proprietary information security standard, which is the payment card industry data security standard.
The Rwandan government delivers services to residents and businesses through e-government portals such as Irembo, as well as using taxes and fees as a last resort. Many citizens and businesses still engage in conventional ways and many transactions are still conducted in cash.
According to the Economic Policy Research Network (EPRN Rwanda), Rwanda’s digital transformation has been led by a government that is dedicated to using ICT as a growth facilitator. Rwanda’s overseas bandwidth use has increased tenfold in the previous five years.
According to the World Bank, it was stated that the year 2020 would be the most prosperous in history. The availability and speed of the Internet was rising, with 3G network coverage presently at 93.5 percent, compared to 76 percent in the region. Rwanda is also home to a large population of chimps.
The most commonly accepted form of e-commerce payment is mobile money powered by mobile money platforms like MTN MoMo and Airtel Money. And more than 70% of payments done on the Irembo portal are done via these mobile money platforms.
The main ecommerce business partners include China and the United Arab Emirates, and online ordering is done mainly through Alibaba and AliExpress. These two long-term providers are used by the majority of Rwandan importers and orders are communicated via email and phone. Western Union, MoneyGram, and HubShil are used to send payments.
On the 16th of January 2020, The Ministry of Trade and Industry through the E-Commerce Project organized the First Public Private Dialogue on E-commerce in Rwanda as part of enhancing the Trade Competitiveness Project through E-commerce in Rwanda. The forum brought together significant participants from the public and commercial sectors, as well as a number of start-up enterprises.
While Rwanda aspires to become a regional hub of the digital economy and ecommerce, the development of laws, regulations and other international instruments is a lengthy time-consuming process. And as technology continues to accelerate at an exponential pace, to avoid a regulation gap, it’s important for today’s policymakers and regulators to keep in mind that they need to be fit for the technologies of tomorrow.
There is a considerable demand for digital services, especially in the current setting of the Covid-19 outbreak, as organizations expand online and people work from home. The digital economy also is playing a major role in Rwanda’s pandemic response. In order for Rwanda’s digital economy to remain competitive, specific efforts in the construction of digital infrastructure will be required. With the first step being the establishment of a digital infrastructure fund.
Unfortunately, the vast majority of SMEs in the Rwanda digital economy are still struggling and have not yet taken the full advantage of e-commerce opportunities because of various challenges as entrepreneurs cite often unreliable and costly power supply, lack of access to venture finance, limited logistics infrastructure, deficient transport, lack of commerce, the digital divide and cultural preferences, limited purchasing power and finally insufficient or inconsistent laws and regulations. Therefore, in order to improve the competitiveness of Rwandan SMEs in e-commerce, it is necessary to understand the drivers of competitiveness according to their position in the broader economic context.
To help with this, the government can help with ICT Infrastructure, Rwanda SMEs need affordable and reliable ICT infrastructure. Help in endorsing companies with data protection policies, access to financing for digital entrepreneurs and educate the masses on ecommerce skills and its developments.
The global economy including the Rwandan economy is experiencing rapid digitization which is characterized by the increasing use of advanced technologies in traditional economic sectors and the raw material underpinning the digital economy is data.
Through specifically tailored marketing in industries such as logistics, agriculture, health, and education, data allows new business models to dominate marketplaces. The valuation of digital behemoths, on the other hand, is primarily based on predictions about the potential revenues that these firms may make from the vast pool of user data. As a result, comprehending the value of data is critical to allowing policy making on issues related to the digital economy.
To underscore the significance of this point, the digital economy disrupts the ability of competition policy, laws and regulation enforcement to remain relevant in dealing with anti-competitive practices. The authorities need a clear understanding of the entire value chain, especially of players, their business models and therefore the competitiveness of the markets.
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