Challenges Faced By Companies Entering Foreign Markets

Case of Rocket Internet’s Sabunta

August 2012

1. INTRODUCTION
Companies move into foreign markets for various reasons. In certain cases, it is towards achieving a required sales volume. In other instances, it might be a bid to increase brand awareness. Other companies go into foreign markets to re-invigorate sales after their products have gone through their life cycle - from inception to decline - in home markets.
Regardless of reason, moving into a foreign market tends to portend great opportunities for companies, particularly if it entails serving products in an emerging economy that has recently become wealthy enough to afford such products; or selling a new but needed …show more content…

They barely survived. The reason for their demise, or in other cases, stagnant growth, was the difficulty of getting customers to embrace the e-payment options available in Nigeria at that time. This difficulty was due to known cases of fraud that occurred over the insecurity of Interswitch, the only e-payment platform available in Nigeria at that time. However, with the entrance of major card payment solutions like Master card and Visa card in 2006, coupled with the improved security features of Interswitch, the industry experienced an increase in the number of Nigerians executing online payments.6(online transactions grew by 25% in 2011)
Prior to the end of the first quarter of 2012, the Nigerian e-commerce scene had been somewhat lukewarm as the only vibrant players were Dealdey.com and Wakanow.com. At the beginning of the second quarter, the sector experienced an increase in the number of e-commerce company in Nigeria, amongst which were Rocket Internet’s Sabunta.com and Kasuwa.com.
The long-term outlook for the e-commerce industry in Nigeria is positive, with analysts predicting a significant increase in new entrants. The implementation of the use of mobile money in Nigeria by the Central Bank of Nigeria is expected to accelerate the development of the e-commerce industry in Nigeria, as mobile money allows a greater number of individuals engage in electronic transactions.
Currently, the Nigerian e-commerce industry has slightly