The Nigerian e-commerce space is quite interesting and, in a way, also depressing. A lot is happening and more will still happen in the days ahead. In the last couple of weeks, Gloo.ng, Dealdey, and Careers24 have all closed shop, not to mention Efritin, OLX and many others that shut down long ago. Honestly, for someone like me who has spent the last one decade or so supporting and encouraging the growth of the industry, it is simply saddening.
Now, the irony is that in many parts of the world, e-commerce is simply booming. I was reading the 2018 Naspers condensed consolidated interim report and a part of it states, “Naspers executed well in the first half of the 2018 financial year, generating group revenue, measured on an economic-interest basis of $11.0bn.” It goes further, “E-commerce was the main driver of growth, with revenues increasing 32 per cent.”
The report gives an encouraging progress on OLX in Brazil; eMag in Central and Eastern Europe; Takealot in South Africa, and many others. Reading that report made me wonder: What really is the problem with e-commerce and marketplaces in general? The founder of Gloo.ng, Olumide Olusanya, took to Twitter recently, claiming that recession, poor purchasing power and logistics challenges led to the shutdown of the platform. One cannot but agree with this assertion because it will be foolhardy to continue living in denial. The foundation of a successful e-commerce industry is built on good infrastructure.
Furthermore, we must also deal with the twin issue of trust and customer service in the marketplace ecosystem. Why do certain potential customers believe that what they see online might be different from what will be delivered eventually, hence, the preference to pay on delivery? Also, why do some check for prices online only to head to a physical shop to make purchases?
According to the Director-General, Delta State Innovation Hub, Chris Uwaje, the challenge in cracking the Nigerian e-commerce market lies heavily on the approach or business strategy adopted by most players, many of whom fail to situate foreign business models, ideas and strategies within the culture of the people and Nigeria’s existential realities.
Notwithstanding all of the challenges, a number of reports estimate the Nigerian e-commerce industry to be valued at between $16bn to $17bn with a lot of potential for growth, if some of these challenges are tackled. The value would have been much lower had the old Konga gone down. This is why I applaud Zinox Group’s acquisition of Konga; re-branding and continuous investment are certainly a welcome development for the industry and economy in general.
One challenge the industry still faces is lack of trust. It continues to beat my imagination why the issue of lack of trust still persists, despite all the assurances the e-commerce companies have given to customers that products can be replaced within a certain number of days? Of course, the other question is: How do the e-commerce companies deal with products that are supplied by external parties? Whatever be the case, the industry must work together to build trust, and some of the ways of achieving this is through user education and unparalleled customer service. The industry has to work closely with the media to ensure that this process is maintained.
Personally, I don’t see payment on delivery going away anytime soon as long as Nigerians are afraid to pay online. A while back, the Nigerian Inter-Bank Settlement System reported an increasing level of fraudulent transactions that amounted to about 8.8 per cent of online transactions. Undoubtedly, — Finish Reading on the Punch