How Tech and E-Commerce is Redefining Nigeria’s Marketplace
Since its introduction into the Nigerian business scene, e-commerce has become a major driver of the country’s digital economy. It has not only brought about innovative business ideas but is redefining existing businesses for efficiency and growth. Thriving on increasing internet penetration and smartphone revolution, online sales and shopping is fast becoming a lifestyle for the average Nigerian.
The impact on business activities and contributions to economic development is even more intriguing. Here are a few examples of how e-commerce is transforming Nigeria’s market:
Boosting logistics business: Many would agree that e-commerce ushered in a new normal for Nigerian businesses by making delivery activities commonplace. The sudden demand for motorcycles, trucks, and vans can be seen on most Nigerian roads in both rural and urban areas, as businesses of all sizes make deliveries on a daily basis. This has a cascading effect on job creation among Nigerian youth that cannot be downplayed.
Cost-effectiveness: Retailers, who make up the SME sector, are arguably the biggest beneficiaries of e-commerce technology. For existing businesses, e-commerce has become a springboard for growth. Jumia, for example, provides a ready-made marketplace for reaching a larger audience. Furthermore, the availability of e-commerce platforms is helping in the actualisation of business ideas. Prospective entrepreneurs no longer need huge startup capital to get their business up and running.
Access to a wider audience: Geographic barriers are no longer an issue thanks to technological advancements of e-commerce platforms. From the comfort of her home, a Jumia seller can put her items in front of millions of people. Another advantage is that it contributes to long-term profit growth. “Selling online helps me reach a wider number of people. From my shop I can sell to people in Kaduna, Abuja, Port Harcourt and that has increased my sales,” said Bukola Ogundijo, a seller on the Jumia platform.
Improves productivity: For business owners, e-commerce allows for excellent time management. E-commerce enables effective time management for business owners. Selling online frees up more time for sellers to engage in other productive ventures. “Selling online has been helpful in managing the business side. I don’t need to worry about warehousing and delivery. I can be in the house, looking at my phone and attending to other things while taking care of the family,” Bukola added.
Price flexibility: Consumers also benefit by saving more at the best prices. Thanks to e-commerce, consumers have a lot of options. As brands jostle for market share, pricing is a major incentive to get consumers’ attention. Today, an average Nigerian in need of a product compares costs on many online marketplaces and chooses the platform with the most reasonable price range.
Eliminating gender barriers: With e-commerce, the gender barriers associated with business transactions are eliminated. For example, people might be hesitant to buy electronic products from a woman selling such in a physical store. However, with e-commerce, the buyer is unaware of the seller’s gender, and what matters is product quality and service delivery. In Nigeria, 51% of Jumia sellers are women as seen in the report by the International Finance Corporation (IFC).
Funding and capacity building: One major impact of e-commerce platforms not often empathized is their contribution to human capital development. “Jumia has taught me how to understand consumer behaviour in e-commerce; how to process orders and how to create products on the e-commerce platform,” said Jumoke Akinsanya, Founder of online store, Deeski.com. “Jumia’s lending program has helped us grow our business to a larger size than when we first started working with them. We began with two staff and a smaller warehouse but we now have a larger warehouse and fourteen staff,” she added.