E-commerce has become a global multi-million-dollar industry, with worldwide sales projected to hit an all-time high of $4 trillion in three years. Although accurate statistics on the volume of e-commerce transactions on the continent is hard to come by, research by McKinsey indicates that e‑commerce will open up a new shopping experience for Africa’s growing middle class.
According to McKinsey, e-commerce could account for 10 per cent of retail sales in the continent’s largest economies by 2025, translating into about $75 billion in annual revenue.
With more Nigerians embracing the e-commerce fare amid a growing awareness for globally celebrated shopping festivals such as Black Friday and Cyber Monday, among others, the country could be on the verge of reaping big benefits from the sub-sector.
In this piece, the Research and Development Unit of Yudala, Nigeria’s fastest growing e-commerce outfit, takes a look at the factors fueling the growing attraction of e-commerce in Nigeria.
1.Growth in smartphone adoption:
E-commerce is an industry that thrives on the smartphone culture. Nigeria remains one of the most attractive markets on the continent for smartphones and other tech gadgets – a factor that has seen the growing influx of a number of smartphone brands all competing for a share of the juicy market. As a result, smartphone adoption is on the rise in Nigeria. This has gone a long way in boosting e-commerce in Nigeria, with the mobile devices category remaining one of the fastest moving among shoppers on the Yudala platform. Global digital giant Google recently announced the imminent launch of a smartphone made by Japanese brand, Freetel during its Google for Nigeria engagement with an attractive price point of N13,000. With more quality yet price-sensitive manufacturers coming on-board, the smartphone adoption trend is expected to rise further in Nigeria.
2.Rise in mobile internet penetration:
Closely related to the above is the rise in mobile internet penetration in Nigeria. Current data made available by the Nigerian Communications Commission (NCC) shows that the number of internet users in Nigeria has increased to 91.6 million in June 2017. According to the statistics released, internet users increased to 91,598,757 in June 2017 as against 91,565,010 users recorded in May 2017, showing an increase of 33,747. With more data-efficient browsers such as Opera Mini coming into play and mobile apps also presenting a convenient means of accessing the offerings of competing e-commerce brands, the appeal of e-commerce is well and truly on the rise.
3.Proliferation of e-commerce sites:
From the heady days of 2012 when only a couple of players held sway, the e-commerce bug has spread like wild-fire. New entrants have taken to the fray, expanding the scope of offerings and the conduct of e-commerce in the country. Some of them have challenged existing structures by providing more convenient options for the consumer to shop. Yudala’s fusion of an online platform with physical (brick-and-mortar) stores located nationwide comes to mind here. The first-ever drone delivery also achieved by Yudala during its debut Black Friday sales in November 2015 also captured the imagination, further raising the bar and setting new standards in the sub-sector. Others such as Payporte have made a huge splash through events sponsorship with the bank-rolling of the reality show, Big Brother Nigeria. These days, the average Nigerian has a plethora of e-commerce companies to choose from, a factor that has contributed in no small measure to the popularity of the industry.
4.Ease and convenience in shopping:
For most busy Nigerians caught up in the daily hustle of making ends meet in cosmopolitan cities such as Lagos, Abuja, Port Harcourt, etc., the convenience and ease that e-commerce lends is a blessing. The days when the only option one has is to physically visit the market to get much-needed items seem to be over. Today, you can sit in the comfort of your home or office, check out an item online, place an order and have the item(s) delivered within a couple of days without hassles. This extra convenience works perfectly not only for busy business executives but also for expectant/nursing mothers and other categories of shoppers unable to find the time nor unsure of the right open-air markets to visit for needed items.
Closely related to the point above is the variety of options e-commerce has provided for the average shopper to meet his/her shopping requirements. For many Nigerians, seeing and being able to touch an item beats just being able to see it on the screen of a mobile phone or laptop. Many still want to see, touch, feel and/or experience a product before they part with their money. With platforms such as Yudala fusing an online platform with offline/physical retail stores, the consumer has more options to embrace e-commerce, albeit from a traditional shopping stand-point. The consumer can order online and pick up the item or self-fulfil at the nearest store or better still, walk in to the store and purchase a product outright. Indeed, recent statistics show that a significant number of purchases made at Yudala’s physical stores originate from shoppers who had previously checked out the products online. These options have contributed to a large extent in improving the appeal of e-commerce for hitherto-unconverted folk in Nigeria.