E-commerce in Africa

Last november 2014 was published in the magazine Ventures Africa anarticle about electronic commerce which I found pretty interesting to reproduce here below because it is a business activity in evolution that must be remarked.

Africa offers enormous potential for e-commerce growth given that online shopping
 is in its infancy in the region, notes Sumesh Rahavendra, head of marketing for 
DHL Express Sub Saharan Africa (SSA).

“Although global e-retailer Amazon celebrated its 20th anniversary in July,
 eCommerce companies in Africa are only now beginning to mark and / or 
 accelerate their presence in the marketplace. An example is Nigeria online
 retailer, Jumia, which despite being founded only two years ago, is quickly 
gaining market share within the country which reiterates the region’s potential,” said Rahavendra.

A recent report by McKinsey & Company also revealed that, eCommerce could 
account for 10 percent of retail sales in the African continent’s largest economies
 by 2025.

To further support his point that e-commerce in Africa was still in its infancy,
 Rahavendra cited a survey conducted in Nigeria, the continent’s largest economy,
which revealed that close to a quarter of respondents (23.55 percent) cited 
the lack of security as the largest obstacle for buying products online. 38.81 percent 
of respondents also picked cash, compared to 29.52 percent who chose credit cards,
as the payment mechanism they would prefer to use when purchasing goods and 
services online. “This highlights that consumers on the continent are still familiarizing themselves with the online payment methods,” he adds.

The DHL Express head of marketing however said advancement of technology will
foster e-commerce growth in Africa.

With mobile penetration in Africa standing at 80 percent, there have been more consumers than ever before, who are interested in e-commerce via their mobile phones. The 2014 Mobile Media Consumption report by InMobi, which includes data from 14,000 users across 14 countries, including Nigeria, Kenya and South Africa, predicted that 83 percent of consumers plan to conduct mobile commerce in the next 12 months, up 15 percent from the current figure.

In Kenya, which has been Africa’s leader in internet usage growth, the Communication Commission of Kenya reports that internet users grew from 200,000 in 2000 to over 19.6 million at the end of last year, a staggering 9,700 percent growth, according to a UN report. Figures like this are indicative of what the future holds for e-commerce in Africa.

“As technology continues to evolve in the respective African countries, as will the levels of online shopping,” Rahavendra enthused.

“It is of our opinion that many African businesses will start to skip the traditional ‘bricks and mortar’ formal retail environment, and instead move straight into online shopping space due to the rise in mobile and internet services within Africa,” he concludes.

Source:  http://www.ventures-africa.com/2014/10/africa-offers-great-potential-for-e-commerce-growth/

pervasive global corruption

Ernst & Young GmbH has published the 13th Global Fraud Survey in June 2014. Here there is a recap published in the media:

Overcoming compliance fatigue: reinforcing the commitment to ethical growth, has found concerning levels of perceived fraud, bribery and corruption across the world. And, regarding emerging threats, despite the apparent global consensus on the significant scale of the threat of cybercrime, almost half of the respondents (48%) considered it to represent a very or fairly low risk to their business.

These survey findings suggest that executives may not have a proper appreciation of cybercrime risks. Respondents see hackers as the biggest concern (48%) and are underestimating the risk from organized crime syndicates as well as foreign states.
The survey included in-depth interviews with more than 2,700 executives across 59 countries, including chief financial officers, chief compliance officers, general counsel and heads of internal audit. Nearly 40% of all respondents believe that bribery and corruption are widespread in their country. (See Appendix 1 to this release for a list of country results.) With respondents portraying a business environment of pervasive corruption in many countries, it would appear that management and boards are struggling to respond to long-standing threats, let alone addressing emerging risks such as cybercrime.
David Stulb, Global Leader of EY’s Fraud Investigation & Dispute Services (FIDS) practice says, “With high-profile cybercrime incidents making headlines on a regular basis, boards should expect management to have a robust incident response strategy in place. Pressure on companies for timely disclosure of breaches is rising in many jurisdictions as well, so these issues require attention from the legal and compliance functions. The U.S. Securities and Exchange Commission is increasingly focused on cyber risks as they relate to the integrity of financial statements too, so audit committee members have to be alert to today’s cyber threat environment.”

Is the C-suite making the right risk management choices?

The C-suite’s difficulties can only be heightened by insufficient awareness of the risks they face. Our survey found that they are less likely than their teams to attend anti-bribery/anti-corruption (ABAC) training (38%) or participate in an ABAC risk assessment (30%).
This is alarming given that these executives are apparently exposed to circumstances which threaten their integrity on a regular basis. Twenty-one percent of CEOs said that they had been approached to pay a bribe in the past, compared with 10% of all C-suite interviewees.
Worryingly, given their role in setting an ethical tone from the top, a significant minority (11%) of CEOs considered misstating financial performance to be justifiable in order to help a business survive an economic downturn, compared with 6% of all respondents.
Stulb continues, “Given the risk of management overriding financial controls, the implications for boards from these findings about C-suite integrity are serious. Enhancing board connectivity with business and finance leaders in the company – but below the C-suite – would be useful to confirm that the board is getting the full and accurate picture. With regulators committing additional resources to prosecuting financial statement fraud, and cooperating frequently with prosecutors from other jurisdictions, the stakes have never been higher.”
David Remnitz, EY’s Global FIDS Forensic Technology Leader, adds: “Regulators are investing heavily to bolster their ability to mine big data from corporations for potential irregularities. The latest data visualization tools can help to identify revenue recognition or procurement-related red flags earlier and more efficiently. Boards should be asking how management is leveraging forensic data analytics to get the most from their big data in order to improve compliance and investigative outcomes.”

The need to reinvigorate compliance

The survey also found that compliance fatigue within businesses appears to have set in at a time when they can least afford it. In a regulatory environment in which international cooperation is becoming more frequent, our respondents described a largely static internal compliance environment:

• One in five businesses still do not have an ABAC policy
• 45% of organizations have not introduced a whistleblowing hotline
• Less than 50% of respondents have attended ABAC training
• Less than a third of businesses are conducting anti-corruption due diligence as part of their mergers and acquisitions process.

“Enforcement of anti-bribery/anti-corruption laws has become more intensive, with significantly strengthened cross-border cooperation among regulators,” explains Stulb. “With new, tougher laws in numerous jurisdictions, and enhanced prosecutorial powers and bigger budgets for law enforcement in certain key geographies, this trend is not just a US phenomenon. Despite numerous recent high-profile prosecutions of major multinationals and their executives, many companies continue to miss opportunities to implement robust ABAC policies and risk assessments. Too few are regularly conducting anti-corruption due diligence. CEOs can do more to lead from the front on these matters, and boards and other stakeholders should intensify their efforts to challenge management to reinforce their commitment to ethical growth.”

World trade in 2013

World merchandise exports grew by 2%, while services trade recorded 5% increase in 2013.

According to UNCTAD (United Nations Conference on trade an Develeopment) and WTO estimates, world merchandise exports grew by 2.1% in 2013 (current prices). The strongest exports growth was observed in developing Eastern Asia (6.5%). At the same time, exports contracted the most in Northern Africa (-10.6%). Imports grew particularly in developing countries of Western Africa (8.6%) and Eastern Asia (6.2%), while they decreased the most in developed Oceania (-5.8%), followed by developed Asia (-5.5%).

In real terms, quarterly figures show that world merchandise exports and imports volume increased by 3.6% and 2.8%, respectively, in the fourth quarter of 2013, compared with the corresponding period of the year before. Developing economies registered the fastest exports growth among the major groups (4.2%), followed by developed region (3.2%).

On a seasonally adjusted basis, world exports volume decreased by 1.1% from the previous quarter. According to this indicator, developed countries maintained the same level of exports during the fourth quarter of 2013 - compared to the quarter before - while developing and transition economies exported less in volume terms.

Services are increasingly being traded internationally, reaching 4.7 trillion dollars of global exports in 2013 and recording a 5% annual growth (current prices). The most dynamic services sectors between 2008 and 2013 were computer and information services (9.1 % annual average growth), followed by personal, cultural and recreational services (8.9 %), then by other business and professional services (6.8 %). It is in computer and information services sector that developing economies record highest growth rates: 13 % on average annually since 2008, compared with 7.5 % for developed countries. Other fast growing services sector for developing nations are financial and insurance services, with average yearly rise of almost 11%. LDCs record highest increase in computer and information services, insurance service and construction: some 30% on average annually since 2008. However, these sectors together represented just 7% of LDCs' total services exports in 2013. In LDCs, as in a majority of regions, travel and transport account for a large part of services exports (some 60% in LDCs, 54% in developing regions, and about 40% in the developed world).

Intellectual property - WTO agreement on TRIPS

Ideas and knowledge are an increasingly important part of trade. Most of the value of new medicines and other high technology products lies in the amount of invention, innovation, research, design and testing involved. Films, music recordings, books, computer software and on-line services are bought and sold because of the information and creativity they contain, not usually because of the plastic, metal or paper used to make them. Many products that used to be traded as low-technology goods or commodities now contain a higher proportion of invention and design in their value — for example brandnamed clothing or new varieties of plants.

Creators can be given the right to prevent others from using their inventions, designs or other creations — and to use that right to negotiate payment in return for others using them. These are “intellectual property rights”. They take a number of forms. For example books, paintings and films come under copyright; inventions can be patented; brandnames and product logos can be registered as trademarks; and so on. Governments and parliaments have given creators these rights as an incentive to produce ideas that will benefit society as a whole.

The extent of protection and enforcement of these rights varied widely around the world; and as intellectual property became more important in trade, these differences became a source of tension in international economic relations. New internationally-agreed trade rules for intellectual property rights were seen as a way to introduce more order and predictability, and for disputes to be settled more systematically.

The Uruguay Round achieved that.

The WTO’s TRIPS Agreement is an attempt to narrow the gaps in the way these rights are protected around the world, and to bring them under common international rules. It establishes minimum levels of protection that each government has to give to the intellectual property of fellow WTO members. In doing so, it strikes a balance between the long term benefits and possible short term costs to society. Society benefits in the long term when intellectual property protection encourages creation and invention, especially when the period of protection expires and the creations and inventions enter the public domain. Governments are allowed to reduce any short term costs through various exceptions, for example to tackle public health problems. And, when there are trade disputes over intellectual property rights, the WTO’s dispute settlement system is now a available

The agreement covers five broad issues:

- how basic principles of the trading system and other international intellectual property agreements should be applied
- how to give adequate protection to intellectual property rights
- how countries should enforce those rights adequately in their own territories
- how to settle disputes on intellectual property between members of the WTO

- special transitional arrangements during the period when the new system is being introduced.

Types of intellectual property

- Copyright and related rights
- Trademarks, including service marks
- Geographical indications
- Industrial designs
- Patents
- Layout-designs (topographies) of integrated circuits

- Undisclosed information, including trade secrets

Key Performance Indicators

Success in a business is judged according to a range of different factors – factors that vary from firm to firm. Key performance indicators, or KPIs, are an important way for businesses to keep track of these factors, and judge their progress.

What are key performance indicators ?

A performance indicator or key performance indicator (KPI) is a type of performance measurement. An organization may use KPIs to evaluate its success, or to evaluate the success of a particular activity in which it is engaged. Sometimes success is defined in terms of making progress toward strategic goals, but often success is simply the repeated, periodic achievement of some level of operational goal (e.g. zero defects, 10/10 customer satisfaction, etc.)

A KPI can follow the SMART criteria. This means the measure has a Specific purpose for the business, it is Measurable to really get a value of the KPI, the defined norms have to be Achievable, the improvement of a KPI has to be Relevant to the success of the organization, and finally it must be Time phased, which means the value or outcomes are shown for a predefined and relevant period.


For exemple here below there are some marketing Key Performance Indicators in ecommerce:

• Site traffic
• Unique visitors versus returning visitors
• Time on site
• Page views per visit
• Traffic source
• Day part monitoring (when site visitors come)
• Newsletter subscribers
• Texting subscribers
• Facebook, Twitter, or Pinterest followers or fans
• Pay-per-click traffic volume
• Blog traffic
• Number and quality of product reviews
• Brand or display advertising click-through rates
• Affiliate performance rate  

•  

The following video introduces key performance indicators in an easy way:

Doing business index

The World Bank has recently published a new repport of Doing Business project (http://www.doingbusiness.org/)

Doing Business 2014: Understanding Regulations for Small and Medium-Size Enterprises assesses regulations affecting domestic firms in 189 economies and ranks the economies in 10 areas of business regulation, such as starting a business, resolving insolvency and trading across borders. This year’s report data cover regulations measured from June 2012 through May 2013. The report is the 11th edition of the Doing Business series.

Ease of doing business ranks economies from 1 to 189, with first place being the best. A high ranking (a low numerical rank) means that the regulatory environment is conducive to business operation. The index averages the country's percentile rankings on 10 areas covered in the World Bank's Doing Business. 

There is below the world map indicating the index points per country

According to the survey first 5 countries are: Singapur, Hong Kong SAP (China), New Zeland, USA and Denmark.
The first African country is Rwanda in position 32 followed by South Africa position 41   and the first South American is Puerto Rico in position 40 followed by Peru in the position 42.