Project – The Role of Social Commerce and Digital Trust in the Growth of Youth-Owned Enterprises. A Study of Youth-owned online businesses in Ibadan, Oyo State.

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

The development of digital technology has significantly transformed the way businesses communicate with customers, promote products, process orders, and compete in the marketplace. Traditional business practices that depend largely on physical locations, face-to-face interactions, and conventional advertising are increasingly complemented by online platforms that enable businesses to reach customers across geographical boundaries. Among the developments arising from this transformation is social commerce, which combines electronic commerce with social media interactions, user-generated content, online communities, customer reviews, and digital recommendations. Through social commerce, businesses can display products, communicate with potential buyers, receive feedback, and facilitate transactions through social networking and messaging platforms. Hajli (2015) explains that social commerce enables consumers to interact online, exchange information, and participate in activities that can influence trust and purchase intentions. Liang et al. (2011) similarly demonstrate that social support and relationship quality are relevant to consumers’ participation in social commerce. These developments have created new opportunities for small businesses, including youth-owned enterprises, to market products and services without necessarily investing heavily in conventional physical retail infrastructure. Social commerce has consequently become an important area of interest in understanding how digital business practices may contribute to enterprise development and growth.

Social commerce is particularly relevant to youth-owned enterprises because young entrepreneurs often operate within financial, managerial, and resource constraints that can limit their ability to compete with established businesses. Through social media platforms, young business owners can showcase products, interact directly with customers, respond to enquiries, communicate promotions, and build communities around their brands. Platforms that support photographs, videos, live broadcasts, comments, customer testimonials, and direct messaging allow entrepreneurs to present products in interactive ways and maintain ongoing contact with potential buyers. Social commerce can also facilitate electronic word-of-mouth communication, through which customers share experiences, recommendations, and opinions with other users. Hajli (2015) identifies forums, ratings and reviews, and referrals and recommendations as important social-commerce features associated with consumer trust and purchase intention. These features may help emerging businesses gain visibility and attract customers beyond their immediate personal networks. Nevertheless, having an online presence does not automatically guarantee business growth. The effectiveness of social commerce may depend on the quality of content, the consistency of engagement, the suitability of the platform, the entrepreneur’s digital skills, and the ability to convert online interactions into completed transactions and repeat patronage. It is therefore important to examine social commerce as a business strategy rather than merely as the use of social media.

Business growth is a multidimensional concept that may involve increases in sales revenue, customer numbers, market reach, profitability, repeat purchases, and the capacity to sustain business operations over time. For youth-owned online enterprises, growth may be reflected in an expanding customer base, increased order frequency, stronger customer retention, improved brand recognition, and the ability to enter new markets. Social commerce may support these outcomes by reducing communication barriers, enabling direct customer engagement, and making product information readily accessible. It can also provide opportunities for entrepreneurs to learn from customer feedback and adjust their products, prices, and promotional activities to market expectations. However, growth depends on more than visibility and engagement. Businesses must also manage product quality, inventory, order fulfilment, customer complaints, delivery arrangements, and financial transactions. Nambisan (2017) explains that digital entrepreneurship creates new opportunities for entrepreneurial activity by changing the nature of products, processes, and organisational boundaries. More recently, Muhammad, Adalier, and Adeshola (2025) examined social commerce adoption among youth-owned micro, small, and medium-sized enterprises in Nigeria and explored its relationship with sustainable business performance. This emerging research makes it especially important to investigate how social commerce practices relate to the growth of youth-owned enterprises in specific local business environments.

Despite the commercial opportunities associated with social commerce, online transactions involve uncertainty because buyers may not physically inspect products, meet sellers in person, or verify the accuracy of every claim before making payment. Consumers may be concerned about product authenticity, misleading photographs, delayed delivery, non-delivery, payment security, and the handling of personal information. These concerns make digital trust an important consideration in online business relationships. Digital trust in this study refers to the confidence customers place in an online business, its representations, its transaction practices, and its ability to fulfil its promises. McKnight, Choudhury, and Kacmar (2002) conceptualise trust in e-commerce through dimensions that include trusting beliefs, trusting intentions, and institution-based trust. Gefen, Karahanna, and Straub (2003) also demonstrate the importance of trust in understanding consumer acceptance of online shopping, alongside perceptions of usefulness and ease of use. For youth-owned enterprises, building digital trust may be particularly important because newer businesses may have limited brand recognition, fewer established customer relationships, and less publicly available evidence of their reliability. As a result, the ability to demonstrate honesty, responsiveness, product consistency, and dependable service may influence whether potential customers are willing to transact with them.

Digital trust may contribute to business growth by encouraging customers to place orders, share personal information when necessary, recommend businesses to others, and return for future purchases. When customers believe that an online seller is reliable, they may feel more comfortable engaging in transactions despite the absence of face-to-face contact. Trust may be strengthened by transparent product descriptions, accurate photographs, clear prices, verifiable customer reviews, responsive communication, secure payment arrangements, and consistent delivery performance. Conversely, unresolved complaints, misleading claims, inconsistent communication, and poor transaction experiences may weaken trust and discourage repeat patronage. Kim, Ferrin, and Rao (2008) show that trust and perceived risk are important in consumer decision-making in electronic commerce, illustrating that customers consider both the expected benefits and the potential risks of online transactions. McKnight et al. (2002) further emphasise that e-commerce trust is multidimensional and should not be treated as a single, undifferentiated belief. For youth-owned enterprises, digital trust may therefore help transform social media engagement into commercially meaningful relationships. However, the degree to which trust contributes to measurable business growth may depend on the business model, the nature of the products offered, customer expectations, and the entrepreneur’s capacity to deliver consistent service.

Social commerce and digital trust may also reinforce one another in the development of online enterprises. Social-commerce platforms provide opportunities for businesses to communicate directly with customers, publish product information, respond to questions, and display feedback from previous buyers. These interactions can reduce information gaps and help customers assess the credibility of an online seller. At the same time, trust may determine whether customers are willing to participate in online communities, rely on recommendations, complete purchases, or share positive experiences with others. Hajli (2015) found that social-commerce constructs can increase trust and purchase intention, suggesting that interactive digital features may be relevant to the development of commercial relationships. Liang et al. (2011) also highlight the role of social support and relationship quality in social commerce. Nevertheless, the relationship is not automatic: a business may attract substantial online attention without building trust, while a trusted business may experience limited growth if its digital reach is poor or its products do not meet market needs. The combined consideration of social commerce and digital trust is therefore useful for understanding how youth-owned online enterprises can move beyond attracting attention to developing customer relationships that support sales, retention, and longer-term business development.

In Nigeria, digital entrepreneurship offers young people opportunities to establish and operate businesses through online channels, although entrepreneurs may face constraints involving capital, infrastructure, digital capabilities, logistics, and competitive pressure. The Small and Medium Enterprises Development Agency of Nigeria and the National Bureau of Statistics have documented the importance of micro, small, and medium-sized enterprises to Nigeria’s economic activity and employment structure through their national MSME survey work. Such enterprises operate in a business environment in which access to customers, reliable transactions, and the ability to sustain operations are important considerations. Ibadan, the capital of Oyo State, provides a relevant setting for examining youth-owned online businesses because the city has a substantial urban consumer market and a range of commercial activities. Young entrepreneurs operating in Ibadan may use social networking sites and messaging applications to promote clothing, food, beauty products, accessories, digital services, and other goods or services. However, the opportunities and challenges experienced by these entrepreneurs may vary according to their product categories, customer groups, platform choices, and business capabilities. Although international research explains the relationships between social commerce, trust, and online purchasing, these findings cannot by themselves establish how social commerce and digital trust relate to the growth of youth-owned enterprises in Ibadan. This study therefore examines the role of social commerce and digital trust in the growth of youth-owned online businesses in Ibadan, Oyo State, with particular attention to their commercial practices and business-growth outcomes.

1.2 Statement of the Problem

The growing use of social media for commercial purposes has created opportunities for youth-owned enterprises to promote their products, interact with customers, and reach markets beyond their immediate geographical locations. Social commerce allows entrepreneurs to use product displays, short videos, customer reviews, referrals, direct messaging, and online communities to communicate with prospective buyers. However, the availability of these tools does not necessarily translate into sustained business growth. Some enterprises may attract followers, comments, and enquiries without generating corresponding increases in sales, repeat patronage, or profitability. Others may struggle to maintain consistent customer engagement or convert online interest into completed transactions. Hajli (2015) demonstrates that social-commerce features can influence trust and purchase intention, but the practical contribution of these features to the growth of youth-owned online businesses in Ibadan requires local investigation. The problem is therefore not simply whether young entrepreneurs use social media, but whether and how their social-commerce practices are associated with meaningful business-growth outcomes.

A second problem concerns the challenge of establishing digital trust among customers who transact with online businesses. Customers may hesitate to make payments when they are uncertain about a seller’s identity, product quality, delivery reliability, or willingness to resolve complaints. These concerns can be particularly significant for newer enterprises that have not yet developed strong brand recognition or an established history of successful transactions. McKnight et al. (2002) show that trust in e-commerce involves several distinct beliefs and intentions, while Kim et al. (2008) highlight the relevance of trust and perceived risk in electronic-commerce decision-making. For youth-owned businesses, weak digital trust may discourage first-time purchases, reduce repeat patronage, and limit customer referrals. Conversely, businesses that communicate transparently and deliver products as promised may be better positioned to establish reliable customer relationships. However, the extent to which digital trust is associated with the growth of youth-owned online businesses in Ibadan has not been established by the general literature alone. This creates a need to investigate the role of trust in the local context.

Another problem is that social commerce and digital trust may be related but distinct factors in business growth. Social commerce can increase visibility and create opportunities for interaction, while digital trust can influence whether customers consider an online business credible enough to transact with. A business may have a strong social media presence but struggle to retain customers because of unreliable fulfilment or poor complaint handling. Similarly, a business may be trusted by its existing customers but experience limited growth because it reaches too few potential buyers or uses its digital platforms ineffectively. The relationship between these factors is important because business growth requires more than online promotion; it also depends on converting customer interest into sales and maintaining relationships that encourage repeat patronage. Although Hajli (2015) links social-commerce constructs with trust and purchase intention, purchase intention should not be treated as equivalent to sustained enterprise growth. The problem is that the separate and combined relationships of social commerce and digital trust with the growth of youth-owned online enterprises in Ibadan require systematic examination.

Furthermore, youth-owned online businesses in Ibadan may differ in their resources, digital skills, products, transaction practices, customer bases, and ability to manage online relationships. Consequently, findings from other markets or from studies focused primarily on consumer purchase intentions may not adequately explain the business-growth experiences of these entrepreneurs. Although recent work has begun to investigate social commerce and performance among youth-owned Nigerian enterprises, there remains a need for context-specific evidence focused on the relationship between social-commerce practices, digital trust, and growth among youth-owned online businesses in Ibadan (Muhammad et al., 2025). Without such evidence, young entrepreneurs may find it difficult to determine which digital practices deserve priority when resources are limited. The central problem addressed by this study is therefore the need to establish how social commerce and digital trust relate to the growth of youth-owned online businesses in Ibadan, Oyo State, and to provide evidence that can inform more effective digital business practices.

1.3 Aim and Objectives of the Study

The aim of this study is to examine the role of social commerce and digital trust in the growth of youth-owned enterprises, with particular reference to youth-owned online businesses in Ibadan, Oyo State.

The specific objectives are to:

1. Examine the social-commerce practices adopted by youth-owned online businesses in Ibadan, Oyo State.
2. Determine the relationship between social commerce and the growth of youth-owned online businesses in Ibadan, Oyo State.
3. Assess the relationship between digital trust and the growth of youth-owned online businesses in Ibadan, Oyo State.
4. Examine the combined relationship of social commerce and digital trust with the growth of youth-owned online businesses in Ibadan, Oyo State.

1.4 Research Questions

The following research questions will guide the study:

1. What social-commerce practices are adopted by youth-owned online businesses in Ibadan, Oyo State?
2. What is the relationship between social commerce and the growth of youth-owned online businesses in Ibadan, Oyo State?
3. What is the relationship between digital trust and the growth of youth-owned online businesses in Ibadan, Oyo State?
4. What is the combined relationship of social commerce and digital trust with the growth of youth-owned online businesses in Ibadan, Oyo State?

1.5 Research Hypothesis

The study will test the following null hypothesis at the 0.05 level of significance:

H₀: Social commerce and digital trust have no statistically significant relationship with the growth of youth-owned online businesses in Ibadan, Oyo State.

1.6 Significance of the Study

The study is expected to be useful to youth entrepreneurs, online business owners, digital marketers, business-development organisations, policymakers, researchers, and other stakeholders interested in digital entrepreneurship.

Youth entrepreneurs and online business owners: The findings may help young entrepreneurs understand how social-commerce practices and digital trust relate to business growth. The study may provide practical insights into customer engagement, online reputation, product presentation, responsiveness, transaction transparency, and customer retention.

Digital marketers and social media managers: The study may help digital marketing practitioners understand that effective social commerce involves more than attracting followers or increasing content engagement. The findings may highlight the importance of converting online interactions into transactions and building customer confidence.

Business-development organisations: Organisations that provide training, mentoring, and support to young entrepreneurs may use the findings to design programmes addressing digital marketing, customer relationship management, online transaction practices, and sustainable business development.

Policymakers: The findings may contribute to discussions on youth entrepreneurship, digital inclusion, consumer confidence, and the development of small businesses. They may also help identify areas where training or business-support interventions could be useful.

Consumers: The study may encourage awareness of the importance of transparent online business practices, reliable product information, responsible handling of customer concerns, and trustworthy transactions.

Researchers and students: The study may contribute to literature on social commerce, digital trust, youth entrepreneurship, and business growth. Its focus on youth-owned online enterprises in Ibadan may provide a foundation for comparison with other cities, regions, and business categories.

1.7 Scope of the Study

The geographical scope of the study is Ibadan, Oyo State, Nigeria. The population of interest comprises youth-owned online businesses operating within the selected study area. For the purpose of the research, the age range used to define youth ownership should be stated explicitly in the methodology and aligned with the applicable policy or institutional definition adopted by the researcher. The conceptual scope covers social commerce, digital trust, and business growth. Social commerce will be examined through practices such as social media product promotion, customer interaction, online reviews, referrals, content sharing, and the use of digital platforms to support commercial transactions. Digital trust will concern confidence in the business’s reliability, honesty, product representations, and transaction practices. Business growth may be assessed using indicators such as changes in sales, customer numbers, repeat patronage, market reach, and business continuity, depending on the data available. The study will be limited to the selected respondents and businesses and will not automatically represent all youth-owned enterprises in Oyo State or Nigeria.

1.8 Limitations of the Study

The study may face challenges in identifying eligible youth-owned online businesses and obtaining participation from entrepreneurs who operate informally or primarily through social media. Some respondents may be reluctant to disclose sales, revenue, or customer information because they consider such details commercially sensitive. In addition, differences in the age, size, sector, and maturity of businesses may affect how social commerce and digital trust relate to growth. Self-reported data may also be affected by recall errors or respondents’ interpretations of business performance. These limitations may be reduced by clearly defining eligibility criteria, protecting respondents’ confidentiality, using simple and consistent questionnaire items, and offering suitable non-sensitive indicators of growth where exact financial figures are unavailable. If a cross-sectional survey design is adopted, the study will establish statistical relationships rather than definitive causal effects. The findings will therefore be interpreted in light of the research design, sampling procedure, and characteristics of the businesses included.

1.9 Operational Definition of Terms

Social commerce: The use of social media and interactive digital features to promote products or services, communicate with customers, share user-generated content, and facilitate commercial transactions.

Digital trust: The confidence customers place in an online business regarding its honesty, reliability, product representations, transaction practices, and ability to fulfil its promises.

Business growth: Improvement in an enterprise’s performance over time, assessed through indicators such as sales, customer numbers, repeat patronage, market reach, and business continuity.

Youth-owned enterprises: Businesses owned or controlled by entrepreneurs who fall within the youth age range adopted for the study.

Youth-owned online businesses: Businesses owned by eligible young entrepreneurs that use online platforms as a significant channel for product promotion, customer interaction, order taking, or sales.

Customer engagement: The interactions between a business and its customers through activities such as comments, messages, enquiries, feedback, reviews, and other forms of online participation.

Online customer reviews: Customer-generated evaluations or feedback about a business, product, or service that are published or shared through digital platforms.

Repeat patronage: A customer’s decision to purchase from the same business more than once.

1.10 Organisation of the Study

The study is organised into five chapters. Chapter One presents the background to the study, statement of the problem, aim and objectives, research questions, hypothesis, significance, scope, limitations, and operational definitions. Chapter Two reviews relevant conceptual, theoretical, and empirical literature on social commerce, digital trust, youth entrepreneurship, and business growth. Chapter Three explains the research methodology, including the research design, population, sample size, sampling technique, research instrument, validity and reliability procedures, data-collection process, and method of data analysis. Chapter Four presents and analyses the data collected from respondents and discusses the findings in relation to the research questions and hypothesis. Chapter Five provides the summary of findings, conclusion, recommendations, and suggestions for further research.

Project – The Role of Social Commerce and Digital Trust in the Growth of Youth-Owned Enterprises. A Study of Youth-owned online businesses in Ibadan, Oyo State.