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The ecommerce force that is Nigeria

October 30, 2013 • Features, Top Stories, West Africa

Jumia, Konga and Kaymu. These online offerings have two things in common: they serve Nigeria’s increasingly connected population and they form part of a high-growth market in eCommerce, which, say experts, is one that is poised to dominate the Continent.

Nigeria, Naira

eCommerce in Nigeria is reportedly growing in stature, size and opportunity

An article entitled E-Commerce in Nigeria: The Next Big Thing? author Ugochi Ekwueme states that Nigerians, in 2011, spent in the region of $380 million on online purchases and the figure is expected to be $920 million next year.

It is little wonder that in August 2013 the MD of DHL Express South Africa, Hennie Heymans, stated that with the recent implementation of a five-year National Broadband Plan, which will lead to an 80% increase in broadband internet penetration by the end of 2018, the country is expected to surpass South Africa’s e-commerce market.

“With a population of over 160 million and an already thriving e-commerce market, Nigeria is becoming a game-changer in African e-commerce. We have seen a massive influx of requests with regards to our services in the region,” says Heymans.

He says that testament to the fertile e-commerce market of Nigeria, Jumia, a domestic ecommerce player which has only been in existence for merely a year, was ranked as the second most preferred online shopping portal by Jana.

Heymans adds that due to Jumia’s rapid success, but limited logistical resources, the company’s initial fleet of 100 vehicles and motorbikes, specifically placed to service Nigeria’s three major cities, became insufficient.  The company realised that in order to service a growing Nigerian client base, it needed a logistics partner. “We recognise that the most challenging constraints for business operations in Africa are transport and logistics, and our logistics infrastructure now enables Jumia to service all of Nigeria’s 36 states,” he concludes.

In an article entitled Africa e-commerce: Beyond the Hype author Mawuna Remarque Koutonin explains that there are definite challenges that impact on the growth of ecommerce in Africa, including lack of access and convenience of the Internet, relevance of ecommerce websites for Africa and Africans, and lack of insight into who the target market is and what they are looking for.

Broadband rollout and internet penetration have to be considered in terms of ecommerce growth.

According to the International Telecommunications Union (ITU), in 2012, the percentage of individuals using the Internet stood at 32.88%, while the number of fixed (wired)-broadband subscriptions per 100 inhabitants was 0.01 and number of fixed (wired)-broadband subscriptions was 140 279.

In November 2012, research by Cisco Systems estimated that global ecommerce would increase 13.5% annually over the next three years and reach an estimated $1.4 trillion in 2015.

The average download speed in Nigeria has been recorded as 17.48 Mbps and the Country is ranked in 8th position on ITNewsAfrica’s list of Africa’s 10 most connected countries.

The statistics corroborate the idea that there are more people going online in Nigeria, something that bodes well for the growth of ecommerce.

Opportunity knocks

“Online retail in Nigeria has grown by over 200%, in terms of orders,” says Konga.com COO, Alex Kamara.

Konga.com is ranked by global traffic website, alexa.com, as among the top 20 websites in Nigeria.

Kamara says Nigeria’s ecommerce market is “huge” and, with 160+ million people, there is massive potential to do business. “If we can manage to convince even 1% of that market to adopt the benefits of ecommerce, we would be very happy,” he says.

Given the expected growth figures, the natural conclusion to make is that competition for business will be fierce and operators will look increasingly towards mobile technology and social media to entrench their value propositions.

In late October Jumia, part of Africa Internet Holding, announced the availability of its first in-house brand, a woman wear collection called FTC Apparel. The brand is available on the online shopping website, initially for Morocco, but with the intention to cover additional countries.

The Company was founded in 2012, operates in five countries and recently won an award The Best New Retail Launch at the World Online Retail Awards 2013.

Jeremy Hodara, co-founder, Africa Internet Holding commented, “At Jumia, our goal is to constantly provide the African market with the most convenient access to on-trend and affordable fashion. Creating an in-house label was an obvious next step for us as a company, and we have a team of incredibly talented, passionate and creative designers who have done a fantastic job on this first capsule collection.”

Sasha Poignonnec, co-founder, Africa Internet Holding, continues “By including FTC Apparel in our already comprehensive portfolio of over 500 major local and international brands, we are providing our customers with something exclusive to our site. FTC Apparel will be sold only on Jumia throughout Morocco, giving shoppers more choice when it comes to their online shopping experience. We are really excited to see the journey the FTC Apparel brand will take from here.”

* Image via Shutterstock

Chris Tredger – Online Editor

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