Tackling the bane of eCommerce growth and adoption in Nigeria

by | Jan 14, 2016

eCommerce is widely considered as the buying and selling of products and services by businesses and consumers through an electronic medium, without using any paper documents. Existing and emerging organisations have leveraged on the internet to facilitate their product and services at every turn. Over time we have seen eCommerce become an important tool for small and large businesses worldwide, not only to sell to customers, but also to engage them. But how well has eCommerce engaged people in this part of the world where running an internet business appears difficult, where consumers are innately skeptical about anything, especially online businesses? Bringing to bare the question;

Does the larger Nigerian population really have a solid grip about eCommerce?

With statistics revealing that Nigeria has the highest internet penetration in Africa, one would by now expect that eCommerce would be the preferred choice for shopping and effecting payment for product and services. But obviously, it is not. As it is, Nigerians are not optimizing the merits that comes with internet. So why are Nigerians not utilizing eCommerce even after adopting working strategies like the Black Friday sales among others? Why then is eCommerce adoption yet to hold sway in Nigeria? Or maybe the notion of Nigerians keeping to trend hovers only around their desire to feel new things and then move on from there to the next new thing?

From another perspective, it would appear that those buying the idea of transmitting fund over an electronic network  are also the sellers of the idea, majority of which reside in the corporate world. Let’s forget the statistics and the corporate world jargons and direct our focus on the guy/man/or woman on the streets of Nigeria doing their regular businesses.

These set of Nigerians constitute not just two-third of the Nigerian population, but also the market audience for online retailing. One important question is how has eCommerce and all its working components been positioned to facilitating their daily retail needs on a consistent basis? Many of these folks probably never heard about eCommerce, and even if they did, they are probably more concerned about providing their next meal, debating political issues or wondering when the state of the economy is going to get better.

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So selling an eCommerce idea to these people is somewhat of a far cry from the achievements portrayed on most social media platforms. Let’s draw a cue from the cashless policy idea operating on similar mechanism, how well has it been able to bring these regular Nigerians out of their comfort zone to fully embrace online business proper? The outcome is still a struggle we hopefully expect to overcome soon enough.

Where does the online retailer position in all of this?

While it is true that more companies are needed within the eCommerce space to facilitate the processing of large orders on daily basis, the online retailers are not entirely blameless. Although theirs may stem from issues relating to trust that affects both parties. But online retailers for their part also need to be more transparent while dealing with their customers. The actions of some online companies as it would seem are not inspiring trust in the customers. The confidence of the few Nigerians that are willing to try out something new has been smashed on this account.

An online retailer for instance may not come out to tell the customer that an item displayed on their platform is not available or is out of stock, yet an order placement is processed on such good. The uninformed customer who is yet to have the goods delivered to his doorstep after lengthy spells of waiting eventually has the order cancelled. The impression such customer will hold about eCommerce will be misinformed.

A customer who may have been disappointed on more than one occasion would rather prefer to shop with the next door retailer or agitate for offline sales; where they see the goods physically before anything else.

Enters the Payment on Delivery (PoD)

A spinoff arising from the skeptical nature of Nigerians, birthed the Payment on Delivery model. This model must have been adopted by the online retailers either as a tool to engineer more sales, or as a necessary measure to regain customers’ trust. On surface value this model appears sublime, but it seems like neither of the reasons for its adoption guarantees continuity for the model, especially because the model has proven to be very costly to operate. Fast forward, say ten to twenty years from now — where internet infrastructure and hopefully, a better oriented Nigerians will be assured — then the story may be different. It’s good to think about the future, along with all the internet promises it holds for Nigerians, but extirpating a currently working model today — regardless of the retailer’s opinion — that Nigerians rather rely on may perhaps further dampen the faith of Nigerians towards eCommerce adoption. What then is the way out?

Also, in the event that a delivered item is defective, either of both parties gains at the detriment of the other depending on the payment model. So an online retailer may have justifiable reasons for ever contemplating the idea of extirpating PoD, especially if the other guy benefits from such a transaction. On the other hand, how does doing away with the PoD system ameliorate the worries of a customer who has in the past had bad experiences on return? It would seem like eCommerce struggle for acceptance in Nigeria in such scenarios would persist. Continuous adoption of the payment model no doubt has the potentiality to keep Nigerians knocking at the eCommerce’s door, but like we’ve seen, it’s not without its own flaws. So what should we do?

Suggestive solutions

Companies needs to come up with innovative solutions to not just creating eCommerce awareness, but proactively engaging the consumer. And having that feat in the bag will play a large role in bringing to an end the eCommerce struggle for acceptance in Nigeria.

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Although some online retailers are beginning to tweak their model by running an hybrid model — the online and offline retailing — in order to bring eCommerce to Nigerian consciousness. More notable is the adaptation of the Black Fridays sales by online retail companies which have seen overwhelming exceptional cases where Nigerians come out of their shell to embrace eCommerce both on the online and offline platform.

Obviously, Nigerians love awoof, so the huge traffic to these eCommerce outlets wouldn’t come as a surprise. Perhaps online companies need to adopt similar incentives regularly — as against the usual annual tradition — in order to engage Nigerians and thus creating that the much needed eCommerce culture.

Last year, Konga initiated a safe and secure payment method which it called the KongaPay. The system is designed to ensure trust and safety for both buyers and sellers on the company’s eCommerce platform. KongaPay allows fund transfers to be held in an escrow account pending satisfactory validation by both parties. At least the model conforms with the assertions that Nigerians (online retailers and consumers alike) are wary of trust.

Yudala found its own answer in a more complex innovative structure with its first drone delivery. Hopefully this innovation would be maintained, and on the other hand, also have Nigerians engulfed under its charm for a very long time.

Another plausible alternative for eCommerce companies is to blend their services to meet the peculiarities of each customer. For starters, having a private section on their platform where customers can add extra details about themselves or the product like it’s a face-to-face conversation can help facilitate a transaction. This even extends as far as fostering a relationship between the customers and the online retailer. Although immediate profit assurance in this strategy may be bleak, some of these companies may even lag behind and eventually nosedive (well that says a lot about such company’s objective) but the long run benefits of effectively implementing it would have many Nigerians feeling safe, and most importantly, giving Nigerians that sense of eCommerce participation.

And finally, eCommerce struggle for acceptance in Nigeria cannot be alone won with these innovative efforts adopted by these online stores. Government effort at the very least should be channeled to compliment the efforts of these online retailers. Perhaps there should be a law that governs online stock management so as to give customers the needed protection while shopping on eCommerce platform.

But in the end, it all comes down to the fact that Nigerians are patriotic, very skeptical people, a bit disoriented, and lovers of trend once — if only — the idea sinks. But be that as it may, where does eCommerce position in these suppositions?

So kindly share your thoughts on whether or not eCommerce is struggling in Nigeria. If so, what are the possible solutions to improving the situation?

Photo Credit: jamesgrayking via Compfight cc

Ifeanyi Ndiomewese
Ifeanyi Ndiomewese

Ifeanyi is a desk reporter-turned administrator. Outside of work, I love to read and travel.

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