10 Problems Facing Ecommerce Business in NigeriaAbbakin
As digital technology and ecommerce platforms continue to grow rapidly in many countries of the word, here are major challenges or problems facing e-commerce business in Nigeria.
A lot of people argue that e-commerce platforms, for example, Jumia and Konga have succeeded and made a lot of money. But despite the popularity of these ecommerce websites, things are not actually working that well with online shopping businesses in Nigeria.
According to TechInAfrica, below is the list of problems facing e-commerce business in Nigeria.
10 Problems Facing Ecommerce Business in Nigeria
#1. Low Quality of Product
There are quite a lot of cases that customers complaining about getting goods with poor quality or different from what was advertised online.
The goods don’t match the online description, by quality, size, and look. Consequently, many customers don’t want to get back to e-commerce platforms as they fear to get poor quality products.
#2. Unsupportive Business Environment and Government Regulations
Nigerian laws and regulations make it hard for businesses to go smoothly. The bureaucracies are complicated when you want to register your business.
In addition, there’s a big amount of tax companies have to pay once their businesses registered. Despite government efforts, this difficulty hasn’t ended there yet, as companies also face difficulty.
Infect, running a business in Nigeria can be costly as a result of expensive power and transportation costs.
#3. E-Commerce Suffers from Pay on Delivery Method
Many Nigerian e-commerce stores use a pay-on-delivery method to attract customers.
Even though this method has brought big losses to the e-commerce companies, like orders cancellation while transit; they have no choice as it is a highly competitive market.
#4. Infrastructure Challenge
The social infrastructure in Nigeria is generally poor, leading to slow delivery of ordered goods.
Across the country, it generally takes time for ordered products to get direct to customer’s doors.
However, in the three Nigerian cities of Lagos, Abuja and Port Harcourt, the delivery of goods is more efficient than any other cities in Nigeria.
#5. Delivery Chain Issue
Normally, an e-commerce platform plays as the middleman between customers and merchants; where the merchants send the ordered items using delivery men.
However, there have been many cases involving delivery men and merchants who directly sell their products to customers at cheaper prices.
They cut out the involvement of e-commerce stores, thus, causing loss of profitability.
Problems Facing Ecommerce Business in Nigeria
#6. Low Purchasing Power
Compared to the US, the UK and other meaning economies of the world, purchasing power in Nigeria is considered low as lots of Nigerians don’t spend much on shopping, either it’s online or physical.
Their spending mostly goes to food and other priority while online shopping is down on their lists.
#7. Expensive Logistics and Warehouse
E-commerce companies in Nigeria also face challenges in logistics and warehouse as they are quite costly. In some cases, there are e-commerce companies that sell cheaper products but customers don’t want to pay for delivery fees at all.
However the main issue here is not about customers don’t want to pay, but their locations. There are some cases where customers leave an insufficient address with no proper street names or numbers.
Consequently, logistic companies lose money for fuel or vehicle maintenance whenever unable to locate them.
#8. Poor Internet Connection
Another major issue in Nigeria is that internet penetration or availability is low. As e-commerce platforms rely on the internet connection, this is a big deal to handle.
If the internet connectivity is poor, customers who want to order items on e-commerce websites will find a difficulty.
#9. Bad Customer Service
Customer service in Nigeria has been reported slow or unable to respond to customer’s complaints.
When customers filed complaints in some cases, the customer service staffs show slow intention to respond.
This bad attitude of customer service staffs decreases the confidence of customers to e-commerce stores.
#10. Skepticism Towards Technology
In general, technology is something that brings skepticism in Nigeria. Some shoppers don’t really trust online transactions because it can lead to online frauds and poor quality of products.
Many customers believe if they have to pay first before the items are delivered, they may end up getting scammed.
This article was originally published by TechInAfrica.