Future of Nigerian e-commerce: the increasing shift to online grocery shopping
At its inception in Nigeria, e-commerce became a market for best deals and bargains on electronics and gadgets. Aside from the convenience and comfort of e-commerce, another factor that swayed the tech-savvy community to online shopping was price differentiation that helped save more on purchasing products. Of course, the likes of Jumia sell some high-value products directly from manufacturers to consumers, thus eliminating the price inflation of retail outlets.
A few years into the online shopping culture, fashion and beauty products came in big and have been commanding huge patronage and sales across different shopping platforms. Then came the COVID-19 pandemic, subsequent lockdowns and social distancing which led more Nigerians to explore e-commerce more than usual. Fast-moving consumer goods and groceries got more orders on several shopping platforms and appears to be an integral part of the future of e-commerce on the cards.
When Jumia released its 2021 Africa e-commerce index, the emerging grocery shopping trend caught the attention of many industry observers. Consumables are growing faster than high-value products in some African countries. According to the report, the shift to everyday products during COVID-19 is part of a broader economic transformation led by the continent’s young, urban and tech-savvy population. Everyday product categories, including fashion, beauty and Fast-Moving Consumer Goods (FMCG), accounted for 57 per cent of Gross Merchandise Value (GMV) in 2020, up from 44 per cent in 2019.
“An area we want to focus on is the increasing shift from high-value products to everyday products; essentials and consumables. That’s where we are deepening our presence,” said Jumia Nigeria Chairwoman Juliet Anammah while speaking on the increasing shift by consumers to groceries shopping.
One thing that sells consumables on e-commerce in developed markets like America is timely delivery to maintain freshness. Africa is, however, a peculiar market, and the environment flows into consumer’s’ expectations. “In our Market, consumers make trade-offs. They are more concerned about the pricing. We’ve also seen the quick and fast expectations coming in as well. But to a large extent, it’s the convenience of buying online and at the best prices. So we want them to buy those items on Jumia and save money,” Anammah explained.
This will also have a ripple impact on the country’s agricultural sector. For decades, Nigerian Farmers have been losing a huge chunk of farm produce due to inadequate storage and processing facilities. For instance, the Federal Ministry of Agriculture and Rural Development said the actual quantity of tomatoes harvested in Nigeria is 1.5million tons, but 700,000 tons are lost to post-harvest bottlenecks. E-commerce companies are heavy investors in technology, and their investment in groceries sale will, in the long run, improve the storage, processing and supply chain for farmers.
The fact that e-commerce creates a window for competitive pricing attracted many Nigerians to online shopping. With platforms providing better pricing and timely delivery, online groceries shopping will play a major role in the future of e-commerce in the country.
