A Business Analyst, Tobenna Okoli has stated that the rapid growth of e-commerce in Nigeria is due to the growth of the middle class in Nigeria.
Appearing on Channels TV’s Rubbin’ Minds to do a post-mortem of the year 2013, with a focus on the rapid increase in the rate at which Nigerians do business on the internet, Okoli said that one of the major characteristics of the middle class is that they want more options to choose from, before spending their money and they also usually seek better convenience, all of which the internet offers.
Claiming that statistics show that globally, Africa has experienced the highest annual e-commerce growth rate in the past year (25.8% according to Medessy); he cited the development of the telecom industry in many of Africa’s developing countries as the reason behind this increase.
According to Okoli, among all mobile phone users in Nigeria, about 55 million use smartphones that enable them to access internet on the go, and consequently enhancing the rate at which they get to find goods and make payments online.
Looking ahead into 2014, Okoli believes that the future of e-commerce in Nigeria is bright, considering that computer and IT literacy is constantly improving in the country.
Worthy of note is that e-commerce in Nigeria used to be retail based in the past, but now, even services can be purchased online with hotels and airlines freely using the online platform to offer their customers convenience; and this explains why the Nigerian e-commerce industry has been rated to be worth about 255 billion Naira (about $1.4billion) according to Medessy Enterprises Limited, owner of online retailer, gidimall.com.
He cited the rapid growth of online shops like Konga.com and Jumia as proofs of how much investment has gone into the sector in 2013, and he believes their successes would inspire even more of such businesses to spring up, with more local businesses also spreading their reach online.
He however warned that doing business online is not just about the presence of goods and services on a website. Therefore, business owners planning to embrace the system should be aware of how much work goes into it.
Although he agreed that e-commerce is a good option for young or new business owners who may not be able to afford the cost of renting shops and offices that customers would want to visit, he however noted that getting customers to see goods and services online is just the “e” part of the commerce.
He stressed that getting the eyes to see what you have to offer is not enough, but the logistics side of the business, which is in the backend is more critical. He said: “if you do not have the structure you may only attract people and there will be no means to satisfy them.”
So, getting the goods and services to the consumers after they have liked and purchased them must be well figured out and planned for, before any business owner should launch an online business.