The Nigerian e-commerce market, projected to rise to $50 billion (N15.45trillion) in the next ten years, would grow, if the federal and state governments can create enabling policies, experts have said.
The fledgling Nigerian e-commerce market is currently valued at N4.01trillion ($13 billion).
According to experts, e-commerce in Nigeria requires enabling policies in the areas of financial inclusion, broadband access, affordability, and ubiquity as well as transportation infrastructure development to grow.
Mr. Nick Imudia, co-chief executive officer, Konga, listing three key areas that the government should address to include road infrastructure to reduce logistics cost and challenges, reduction in failure rates of electronic payment and product quality.
He said the operating environment would be fairly flexible if the above challenges are addressed. “The future of e-commerce Market in Nigeria is very bright regardless of all the challenges in the business model.
“Globalisation and the youth population will force the retail industry/ market from informal to formal within a very short period of time. In addition, the formal sector will grow in line with the gross domestic product (GDP) of Nigeria…and improvement in spending power,” Imudia said.
Comparing e-commerce in Nigeria with other African countries (excluding South Africa), he said it is fairly robust – primarily due to Nigeria’s population and internet penetration rate. “However, no e-commerce company can comfortably state that they are successful if not successful in Nigeria,” he said, referring Nigeria market size and opportunities therein.
On his part, the chief operations officer, VoguePay, Akomolafe Adesina, a leading online payment company in Nigeria that helps e-commerce and other businesses accept payment online, listed other factors inhibiting e-ecommerce growth to include cost of internet and mobile adoption rate.
“Fintech and eCommerce go side by side. Any growth in fintech impacts how people buy online. Hence, any regulation that enhances financial inclusion and gives users better channels to make online payment easier and secure is a welcome development.
“As a payment solution provider, we experience what other businesses face. Like every business, we are affected by the high cost of doing business and have had to deal with cases of double tax as well as regulatory compliance that is not updated to meet global best practices.
“We have learnt to adapt the business to work within the provisions of the law,” he said, lamenting that lots of talents are relocating to Canada for better opportunities. This skill shortage is affecting tech ventures as the talent needed to build tomorrow’s technology today are no longer available,” Adesina said.
However, the VoguePay COO said the e-commerce market in Nigeria will continue to grow, expecting 75 per cent growth compared to the previous year, adding that government policies such as cashless policy will be a key stimulator of this sector.
“It is also worthy to note that due to increasing conversations in public forums on financial inclusion, the awareness has increased. This means that more entrepreneurs and individuals will adapt to the innovations. In the last 10 years, more brick and mortar businesses have gone online.
“Payment providers like VoguePay have also enabled multiple options, which now allows businesses to accept payment both offline (using USSD, PoS) and online (transfers, web etc). So, the opportunities for e-Commerce growth is enormous,” Adesina added.
The current e-commerce market in Nigeria is valued at $13 billion and is estimated to rise to $50 billion in the next decade. This represents 300 per cent growth as estimated by the Economic Intelligence Unit.
Ecommerce investors say the ever-growing population in Nigeria will continue to be of great advantage in ecommerce. From statistics, about 60 per cent of the Nigerian population are below 30 years which can be classified as the millennials with a wider exposure to tech and internet.
Adesina said, “In the last decade, Nigeria has been among the top destination for investments in Africa due to the numerous opportunities that abound and most especially the market size. We have leapfrogged to the present stage through digital transformation of various services and products. So, I would say that Nigeria compares favourably well due to our market size, awareness and growth.
Chairman, Association of Telecommunications Operators of Nigeria (ALTON), Engr. Gbenga Adebayo said to grow the e-commerce market, telecom infrastructure must be protected as Critical National Infrastructure.
‘‘We must commend the efforts of the Minister of Communications and Digital Economy, Dr. Isa Pantami who is making efforts to ensure maximum protection of telecom infrastructures. He has disclosed that plans are underway to provide Critical National Infrastructure (CNI) bill protection to ensure maximum protection of telecoms infrastructure.
“The reality is that telecommunications services and infrastructure underpins just about everything we do – from making payments on our phones to using the internet to learn, running online businesses, using google maps to navigate from place to place, calling our loved ones and business partners, contacting hospitals etc,” Adebayo further said.
According to GSM Association (GSMA), 172 million Nigerians have access to mobile devices, whereas only 112 million Nigerians had access to the internet. GSMA says year 2020 will witness the entrance of new, affordable mobile devices and, the Nigerian government’s efforts to expand the reach of the internet through the various mobile operators will further drive increased mobile shopping.
