The Relationship Between Electronic Commerce Adoption and Shipping Cost of Manufacturing Companies in Nigeria

The study examined the relationship and impact of E-commerce adoption on the shipping cost using the Nigerian manufacturing companies as a case study. Cost of logistics in which shipping/delivery cost has been recognised to be the major constraints to the development of E-commerce i.e., shipping /delivery cost is one of the major concerns for the patronage of online market as it include all services required to transport products purchased online from a retailer to the customer’s delivery destination hence the study focussed on shipping cost variables which include: E-commerce platform usage, average shipping cost, cost variation by distance, carrier selection criteria, bulk shipping efficiency, shipping cost negotiations, shipping cost allocation and consumer shipping charges as shipping play a crucial role in E-commerce as its core link. The study was carried out in Lagos state, Nigeria and the population of the study include 10 manufacturing companies categorised as consumer goods companies based in Lagos State of Nigeria listed by the Nigeria Group Exchange, 2022. Simple random technique was used to select 565 respondents, the data collected for the study was obtained using a well – structured questionnaire. The data was analysed using both one sample t-test and Pearson Product Moment Correlation (PPMC) coefficient analysis. E-commerce had significant correlation on cost variation by distance (.146), carrier selection criteria (.092), shipping cost negotiations (.278), shipping charges (.239), shipping cost allocation (.166) thus it is imperative to strike a balance between covering logistics costs and maintaining competitive pricing for a realistic E-commerce pricing strategy. The findings showed that a significant correlation exist between e-commerce adoption and the shipping cost. Thus, these findings imply that the adoption of E-commerce impacts various dimensions of shipping costs though it indicates that while E-commerce can increase certain costs, it also enhances efficiency and provides opportunities for strategic cost management and negotiations in shipping operations.