Factors limiting electonic commerce adoption in Tanzania

The end of twentieth century witnessed a profound change in the way businesses conducted their activities. In order to reinvent themselves, to meet localized as well as global challenges, and improve on trading and marketing of their services and products, businesses turned to the web as the new trading frontier. E-commerce, as the new phenomenon became known, it offered businesses with real time solutions to historical challenges of capturing and dealing with customers' orders. The advent of e- commerce provides easier means of a company to market its products and services to a wider audience spectrum, to improve on its earnings, to reduce wastes, to increase its market share and to face the challenging competition. However, this revolution has not benefited most of the businesses in the developing countries like Tanzania. Though most businesses are aware of the benefits of electronic commerce, there has been noted inertia in embracing and converting to the newly found trading ways. Businesses continue to cling on to traditional ways of doing things. Globalization and even localized competition calls for a change in attitude. Enterprises in developing countries that are or plan to be involved in international trade need to start incorporating ICT and the Internet into their business models in order to stay competitive. This means that E-commerce is now an imperative move and not an option. It is behind this threat that the researcher decided to research and find out the reason behind this slow adoption. This research was conducted in Dar es Salaam. The study found that technology limitation perceived difficulties in payment mechanism and lack of management commitment are the major constraining factors that limit e commerce adoption in Tanzania. This situation is to a great extent explained by high equipment and installation costs, high rate of internet services providers ( ISP ), lack of financial e-commerce backing facilities such as credit cards, poor communication infrastructure, absence of proper government policies and initiative toward the digital economy.In order to improve e-commerce adoption rate or speed the government should create an enabling environment for the wider scope of e commerce application in the society through mass education and it should enact laws and regulation to guide the digital economy.