The Nigeria Online Ecommerce Market Size and Trends
If you are thinking about stating an online business or investing in existing ones, here is the Nigeria online ecommerce market size and trends as it stands in 2018.
As you would expect, this post contains the statistics of online shopping in Nigeria with data from reliable sources and trade institutions.
Looking at Nigeria with a population of over 180 million people, the journey of e-commerce has had an tremendous impact on business transactions in Nigeria and influenced the economy greatly.
This is because out of the 180 million Nigerians, 62 per cent are youths which may represent a potential audience as they are highly connected on the internet via the usage of mobile phones.
Based on the data from the Nigerian Communications Commission (NCC), mobile network coverage is currently estimated at 77 per cent on the basis of 185 million as the country’s population.
However, the Internet data penetration via GSM is still at 50 per cent while other providers are estimated at 10 per cent or less.
The potential impact of a thriving e-commerce market is its improved trade activity as this provides a cost-effective method of connecting producers and merchants directly to customers.
Therefore if you are thinking about the online market, the time is no ripe to connect your products with the Nigerian communities through the global revolution of e-Commerce.
Currently, the e-Commerce market in Nigeria is worth around $13 billion; according to a report by London based Economist Intelligence Unit (EIU).
Experts in the Nigerian financial service sector have also estimated that Nigeria’s e-commerce market value could rise to $50 billion (N15.45trillion) over the next 10 years.
Recently, the National Bureau of Statistics (NBS) predicted that the e-commerce sector is expected to contribute about 10 per cent, of a projected N10trillion, to the nation’s Gross Domestic Product (GDP) by 2018.
With the increasing penetration of internet in Nigeria and across Africa; this is a huge market and the sales volume is bound to continue progressing in the coming years.
But, the demand on services is still changing, and the supply chain is also evolving. Customers are now asking ‘why they should buy from your store or order your product?’
The industry giants, such as Jumia, Konga and Jiji, are leading the African charge to boost the continent’s growth of online based retail businesses.
Nevertheless, for e-commerce to attain its full potential in Nigeria, infrastructural issues, trust, as well as e-fraud challenges need to be tackled.
Logistics challenges across the country could be threatening the shopping experience as delivery of products is usually delayed.
According to Konga, the e-company has a customer pool of 750,000 online shoppers. However, there are only 200,000 active customers.
Though the rural population accounts for only 10% of its total active customers, this could be due to low internet penetration in rural areas as well as low income levels in the current downturn.
A recent report released by Jumia on the Nigerian Mobile Sector has revealed that 70 percent of Nigerians preferred the cash on delivery option to other forms of payment (like the credit/debit cards payment, and the mobile money option).
Despite the Jumia Company operating in 10 other African countries, analysts pointed out that the e-commerce industry has also witnessed reduced patronage at the back of the current economic recession.
The EIU also, noted that the rising affluence of e-commerce is not causing Africans, especially Nigerians, to abandon the traditional shopping methods entirely, but it is helping an increasingly inspirational consumer base to broaden its tastes.
While Jumia is able to deliver to less accessible places, sourcing goods from shops or stalls is not as straightforward though.
As a business that is ready for growth, you need to understand that the traditional business models do no longer fit into the digital economy.
You need to have a long-term business strategy and take a quantum leap in technology to be able to capture business opportunities in the Nigeria online marketplace.
All of these competitive approaches to consider can be best decided by the customers as they are the ones how know what represent value for them.
In the last few years, the number of change in the retail sector has changed the taste on how people want to access the market.
Since there are many people involved in the buying cycle, we need to understand who the customers are and be able to analyze the target market share.
Interestingly, strategies built around competition are at best being reactive.
In that wise, it’s important not to ignore who your competitors are, but design your marketing objectives with real-life online shopping trends in Nigeria.
Abbakin is working on campaigns that help startups enhance their businesses using digital technology. We develop online shopping systems and marketing plans to suit your kind of business or niche.
An online shopping system is a collection of digital tools and telecommunication elements that enables shoppers to initiate and complete business transactions with your company.
For awareness, one way that you can reach more people is through mobile and digital.
The economy has changed – so social platforms (i.e. Twitter, Facebook) and digital marketing strategies are the best ways to drive awareness for your business.
With our experience team of developers who are ready to help entrepreneurs break in easily into the Nigerian ecommerce industry.
The Abbakin brand has been able to position and sustain itself as a home-grown digital marketing company in Nigeria that can be competitive in the international market.
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