The e-commerce sub-sector is one of
the fastest growing areas of the Nigerian economy and Africa in general growing
at the rate of 25.8% while global e-commerce growth rate is 16.8% even with
Africa representing only a small 7% of global internet users (sourc:
e-marketer). Nigeria being the most populated country in Africa with 1 of every
4 Africans being a Nigerian and Lagos alone having an estimated population of
25million by 2015 is at the center of the e-commerce revolution in Africa (Source:
Wikipedia). The major factors that contributed to the recent e-commerce boom in
Nigeria includes the galloping growth of the telecommunications industry which
led to cheaper and faster internet services, increase in the availability of
cheap mobile smartphones, increase in the population of tech savvy youths
coupled with increased social media activity which is often used as a marketing
tool, positive behavourial changes towards
e-commerce majorly due to the pay on delivery system and the cashless policy
initiated by the CBN which seeks to reduce the use of physical cash and
increase the adoption of various electronic portals for financial transactions.
Nigeria has the highest amount of
internet users in Africa with 48.4million people having access to the internet ahead of Egypt (29.8 million),
Morrocco (16.5 million), Kenya (12 million), and South Africa (8.5 million)
(Source: mushroom networks). About 60% of the internet users in Nigeria do that
via mobile hence leading to a secondary mobile commerce revolution (M-commerce),
your phone is now your mall. By the end of June 2014, 63 per cent of Nigerian
internet users had bought at least one item online. 60 per cent of these buyers
claimed to have used their mobile phones for these purchases and 15 per cent
increase in users’ purchases online from results in 2013 (Source: TERRAGON
GROUP). According to the Nigerian Minister for communications technology, Dr. Omobola
Johnson, Nigeria’s e-commerce market, whose worth was $35 million as at 2012
has grown to $550 million within the last two years with a market potential
expected to reach $10 billion with a corresponding rise from 1,000 orders per
day two years ago which has now increased to about 15,000 with a projection of
300,000 orders in the nearest future.
The e-commerce sector has the
ability to greatly influence the economy and to provide a large number of jobs
to the increasing unemployed population. This statistics look amazing but there
are some problems which needs to be tackled for future growth to continue, some
of the problems include lack of local funding (a high percentage of funding for
e-commerce companies comes from foreign investors),the average time for
delivery is between 2-7 days or more leading to the problem of long delivery
time due to the inadequate transportation systems in place which will soon not
be able to cope with the increasing orders made per day, tedious payment system
and unstable internet service. The future of e-commerce is extremely bright with
increase in mobile money usage and further promotion of the cashless policy,
the e-commerce market will soon be a major contributor to Nigeria’s Gross
Domestic Product GDP. As Nigeria increases in population, further decrease in
internet service cost with improved efficiency due to the competitive telecoms
market coupled with the continuous availability of cheap smartphones and an
increase in the population of the middle class creates a perfect mix of
conditions which favours the growth of e-commerce. Some few ways in which most
e-commerce sites can improve their sales include general advertisement majorly
for brand recognition and targeted advertisement for increase in sales,
initiating customer reward systems, good customer service including selling
quality products, reasonable pricing on specific products, good delivery and
return policies and an effective customer retention system.
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