COVID-19 Solidarity Response Fund marks first anniversary and appeals for continued support

Esan Bolaji
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COVID-19 Solidarity Response Fund marks first anniversary and appeals for continued support
  • The fund has raised more than US$ 242 million from more than 661 000 individuals, corporations, and other organizations to support WHO and partners’ global COVID-19 response.
  • The fund helps WHO to deploy lifesaving supplies, information and research to countries across the globe.
  • An additional US$ 1.96 billion is needed for WHO in 2021 to continue coordinating global pandemic response, more than 60% will go towards requirements for the Access to COVID-19 tools, including diagnostics, treatments and vaccines.
One year ago WHO created the COVID-19 Solidarity Response Fund to respond to the unprecedented show of support by individuals and companies to help WHO in the fight against COVID-19.

Powered by the UN Foundation and the Swiss Philanthropy Foundation, it was developed as an innovative platform to enable private companies, individuals and other organizations to contribute directly to WHO’s efforts to prevent, detect, and respond to COVID-19 around the world.

The fund’s first year has seen unprecedented solidarity: to date, more than 661 000 donors have contributed nearly US$ 250 million.

COVID-19 disrupting mental health services in most countries, WHO survey
Dr Tedros Adhanom Ghebreyesus, Director-General of the World Health Organization

The funds have been used to provide millions of frontline workers with critical personal protective equipment, medical supplies, and testing kits; to manage misinformation and the infodemic; support vulnerable populations like refugees and displaced persons; and helped accelerate the research on vaccines, tests, and treatments.

“I sincerely thank every individual, corporation and other organization for their donations to the Solidarity Response Fund,” said Dr Tedros Adhanom Ghebreyesus, WHO Director-General. “Your generosity has made a difference. On the fund’s one-year anniversary, we have seen what we can accomplish together in times of need”.

The Solidarity Response Fund has been a critical source of funding for the WHO’s overall response. Since the beginning of the pandemic, WHO has shipped nearly 250 million items of personal protective equipment and vital medical supplies including oxygen across more than 150 countries, strengthened hundreds of national and subnational laboratories with technical support, supplied more than 250 million COVID-19 tests; coordinated the deployment of more than 180 teams across the world; and supported more than 12 000 intensive care beds in health systems that might otherwise have been overwhelmed.

Despite this progress, current trends show that the fight is far from over. That’s why today the fund launches a renewed call for action for funds to contribute to the estimated   US$ 1.96 billion required by WHO in 2021 to respond to remaining and new challenges in the fight against COVID-19.

Contributions to the next phase of the fund will support the efforts of WHO and its partners to continue to suppress transmission, reduce exposure, counter misinformation, protect the vulnerable, reduce mortality and morbidity and accelerate equitable access to new COVID-19 tools – including through WHO’s work with the ACT-Accelerator, to scale up vaccination globally, particularly for the most vulnerable countries, and ensure the delivery of life-saving supplies.

The recently launched WHO Foundation will lead the next phase of the Solidarity Response Fund to support the continuing fight against the COVID-19 pandemic, working in collaboration with the United Nations Foundation and a global network of fiduciary partners.

“The COVID-19 Solidarity Response Fund galvanized an astonishing outpouring of global generosity beyond anything we have seen before.  We put all the resources of the UN Foundation behind this task and were overwhelmed by the global response that enabled us to get critical funds to the most urgent needs in the devastating first year of the pandemic.

The Solidarity Response Fund is a true testament to the power of collective action, and what can be achieved when people from every sector and every corner of the world act together to respond to overcome a collective threat,” said Elizabeth Cousens, President and CEO of the UN Foundation.

Launched in May 2020, the WHO Foundation is an independent grant-making organization that supports WHO’s efforts to address urgent global health challenges.

“COVID-19 has affected all of us. Every country. Every company. Every community. It was inspiring to see the world rally behind the WHO last year in the form of hundreds of thousands of contributions to its Solidarity Response Fund. That money was put to good use and saved countless lives,” said Anil Soni, CEO of the WHO Foundation.

“I am committed to maintaining the success of the Fund as a vehicle for individuals and corporations to power the global fight against COVID-19. This pandemic won’t be over anywhere until it’s over everywhere, and donations to the Solidarity Response Fund help move the world towards that goal.”

The COVID-19 Strategic Preparedness and Response Plan (SPRP), and accompanying guidelines, issued in February 2021, fully articulates the basis for WHO’s appeal. The document guides coordinated action that WHO must take at national, regional, and global levels to overcome the ongoing challenges in the response to COVID-19, address inequities, and plot a course beyond the pandemic.

“We have achieved so much over the past year. Unfortunately, the pandemic is far from over and we can’t give up the fight yet. We thank you for your contributions and seek your continued support to beat COVID-19.” added Dr Tedros.

First Bank Promotes Cross Border Payments In Sub Sahara Africa With First Global Transfer

Esan Bolaji
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First Bank Promotes Cross Border Payments In Sub Sahara Africa With First Global Transfer

First Bank of Nigeria Limited (FBN) has announced the launch of First Global Transfer (FGT) to promote the international transfer of funds across its subsidiaries in sub-Saharan Africa.

FBN’s subsidiaries in Africa include FBNBank DRC, FBNBank Ghana, FBNBank Gambia, FBNBank Guinea, FBNBank Sierra-Leone, FBNBank Senegal.

The First Global Transfer (FGT) initiative is specifically designed to ensure safe, timely and improved efficiency in the transfer of funds across the network of FirstBank subsidiaries in Africa. The FGT is not restricted to FirstBank and FBNBank Customers alone but it is also open to every individual resident in the country the fund’s transfer is originating from.

Intending users of the initiative are to visit any of the Bank’s branches in Nigeria or subsidiaries in Africa, which are: FBNBank DRC, FBNBank Ghana, FBNBank Gambia, FBNBank Guinea, FBNBank Sierra-Leone, or FBNBank Senegal to enjoy the service.

FirstMobile Bags “Best Mobile Bank App” at Global Finance Best Digital Bank Awards 2020.

For example, with First Global Transfer, individuals and customers in Sierra-Leone can walk into any FBNBank branch to send money to FirstBank customers in Nigeria as well as FBNBank customers in Gambia, Ghana, DR Congo, Senegal or Guinea.

Speaking on the initiative, Dr. Adesola Adeduntan, CEO, FirstBank said “today’s customer is influenced by the technological advances shaping businesses across various industries and our First Global Transfer (FGT) initiative is one of those advancement created to impact every individual in our host community in Africa, whilst promoting the ease and swift transfer of money from one country to another for business or personal activities.”

“With the launch of African Continental Free Trade Area (AfCFTA) on 1 January 2021, the First Global Transfer (FGT) is indeed very timely as it will play an essential role in stimulating business activities across borders, thereby impacting the growth and development of the continent.

I enjoin everyone to visit any one of our branches nearest to you in Nigeria or our subsidiaries in Africa and send money to your loved ones or business partners with FirstBank or FBNBank account(s),” he concluded.

Mobile Payment Tokenisation Revenue To Exceed $53 Billion Globally By 2025

Esan Bolaji
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Mobile Payment Tokenisation Revenue To Exceed $53 Billion Globally By 2025

… As OEM Pays & Wallets Drive Adoption

A new study from Juniper Research reveals that revenue from tokenization provisioning and management in mobile payments will exceed $53 billion in 2025, from $18 billion in 2020.

The report found that tokenization, where account details are replaced with data useless to fraudsters, is taking hold in both in-store and remote commerce. This strong growth of over 180% will be fuelled by the increased use of OEM Pays in both in-store and remote commerce, as well as the increasing adoption of tokenization by digital wallet providers and their tighter integration into app checkout processes.

The research recommends that digital wallet providers move to implement tokenisation immediately, if not already, and prioritize acceptance to increase security in checkout processes.

Remote Commerce To Account for Majority Of Tokenisation Revenue, But Contactless Catching Up

The new research, Mobile Payment Data Protection: Tokenisation, Encryption & Market Forecasts 2021-2025, found that revenue from remote payment tokenisation will equate to 58% of total mobile payment tokenisation revenue in 2025.

However, this compares with 84% in 2020. As mobile contactless payments are tokenised by default, accompanying tokenisation revenue is accelerating rapidly, with contactless enjoying boosted growth following the pandemic.

Research co-author Susan Morrow explains: ‘Tokenisation is quickly becoming ubiquitous for mobile payments; reflecting the need for mobile payments to offer superior security features.

Tokenization vendors must offer simple and compliant token provisioning and management solutions, in order to capitalize on the rapid growth in mobile payments usage.’

Persistent Tokens Gaining Ground in Remote Payments

The research also found that the use of persistent tokens is increasing in remote payments; accounting for 52% of tokenized remote mobile payment transactions in 2025, from 41% in 2020.

The report identified that the increasing dominance of digital wallets that use persistent tokens in eCommerce is driving this growth. As such, the report recommends that tokenisation vendors focus on token management systems to ensure that managing persistent tokens is as efficient as possible.

Juniper Research provides research and analytical services to the global hi-tech communications sector; providing consultancy, analyst reports, and industry commentary.

British American Tobacco Declares Interim Dividend of 215.6p Per Share

Brand Spur
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British American Tobacco Declares Interim Dividend of 215.6p Per Share

British American Tobacco has announced that the Board had declared an interim dividend of 215.6p per ordinary share of 25p, payable in four equal quarterly installments of 53.9p per ordinary share in May 2021, August 2021, November 2021, and February 2022.

Brand Spur Nigeria understands that the May 2021 Dividend will be payable on 12 May 2021 to shareholders registered on either the UK main register or the South Africa branch register on 26 March 2021 (the record date).

In accordance with the JSE Limited (“JSE”) Listing Requirements, the finalization information for the May 2021 Dividend relating to shareholders registered on the South Africa branch register is set out in the paragraphs below.

The salient dates and other dividend declaration information announced on 17 February 2021 remain unchanged for the May 2021 Dividend.

South Africa Branch Register: Dividend Rate

The British American Tobacco Group reports in sterling, therefore dividends are declared and payable in sterling except for shareholders on the branch register in South Africa whose dividends are payable in rand. A rate of exchange of £:R = 20.72650 as of 11 March 2021 (the closing rate on that date as quoted by Bloomberg), results in an equivalent May 2021 Dividend of 1117.15835 SA cents per ordinary share.

South Africa Branch Register: Dividends Tax Information

South Africa Dividends Tax (at a rate of 20%), equivalent to 223.43167 SA cents per ordinary share, will be withheld from the gross May 2021 Dividend paid to shareholders on the South Africa branch register, unless a shareholder qualifies for an exemption.

After Dividends Tax has been withheld, the net dividend will be 893.72668 SA cents per ordinary share. The May 2021 Dividend is regarded as a ‘foreign dividend’ for the purposes of the South Africa Dividends Tax.

For the purposes of South Africa Dividends Tax reporting, the source of income for the payment of the May 2021 Dividend is the United Kingdom.

At the close of business on 11 March 2021 (the latest practicable date prior to the date of the declaration of the South African rand equivalent of the May 2021 Dividend), the Company had a total of 2,294,611,554 ordinary shares in issue (excluding treasury shares).

The Company held 161,982,116 ordinary shares in treasury giving a total issued share capital of 2,456,593,670 ordinary shares.

British American Tobacco p.l.c. is registered with the South African Revenue Service (SARS) with tax reference number 9378193172.

Mr Price Group to buy Yuppiechef

Esan Bolaji
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Mr Price Group to buy Yuppiechef
Mr Price has moved to purchase 100% of Yuppiechef, a privately-owned South African business focused on home and kitchenware.

Yuppiechef was founded in 2006 and is aimed at the distribution of aspirational kitchen and homeware brands.

The business has two primary operations – Yuppiechef Online, the retail division comprising the online platform and seven stores, as well as a wholesale division, which develops, and imports branded goods for wholesale distribution.

Mr Price Group to buy Yuppiechef Brandspurng

It commenced operations as a pure e-commerce company and since 2017 has transitioned into a full retail platform.

Mr Price said that purchase will give it the opportunity to gain access to a higher LSM customer base, enabling the growth of its share-of-wallet through ‘aspirational value spending’.

“We are very excited about welcoming the Yuppiechef team into our family,” said Mr Price chief executive Mark Blair.

“We are partnering with a market-leading business which has won numerous awards relating to both e-commerce and stores, and Yuppiechef has a proven ability to launch private-label categories which have also attracted industry recognition.”

Blair added that the acquisition will enable Mr Price to service a new customer base.

“Yuppiechef will benefit from our financial strength to accelerate growth plans which include significantly broadening the product assortment into areas where we have well-established skills and expanding its physical presence beyond the currently limited number of stores.

“We were early adopters of e-commerce in South Africa and our consistent investment has really paid off for us. Yuppiechef gives us another platform to escalate our ambitions in online retail and enables us to be strategically positioned for further growth.”

Mr Price said that the purchase consideration, which represents approximately 1% of market capitalisation, will be settled in cash.

The targeted effective date is subject to the fulfilment of both regulatory and commercial suspensive conditions which includes competition authority approval.

It added that the Yuppiechef management team will continue to run the business with the full support of the group’s executive team.

Fatgbems Petroleum Issues Explanatory Statement On Water Contamination At Its Abeokuta Retail Station

Esan Bolaji
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Fatgbems Petroleum Issues Explanatory Statement On Water Contamination At Its Abeokuta Retail Station

Fatgbems Petroleum Company Limited, an independent petroleum marketing company, has issued an explanatory note on the recent water contamination issue at one of its retail outlets in Abeokuta, Ogun State.

In a statement obtained by Brand Spur Nigeria, the management of Fatgbems Petroleum Company Limited stated that it regrets the water contamination issue at its I6B retail outlets in Abeokuta on March 14, 2021. The incident was said to have been caused by a water overflow into one of the station storage tanks.

Fatgbems Petroleum Issues Explanatory Statement On Water Contamination At Its Abeokuta Retail Station

Fatgbems will like to restate that this unfortunate incident is against its business ethics as it will not dispense low-quality products to its esteemed customers.

Addressing the incident, the management of Fatgbems Petroleum stated,

“We, therefore, like to appeal to our esteemed customers and the general public to stay calm; as measures are already in place to address all issues as laid down by affected customers.”

“Once again, we sincerely apologize for all the inconveniences caused and hereby reaffirm our commitment to exceptional service delivery at all times.”

Fatgbems Petroleum is a member of Fatgbems Group, incorporated as an independent petroleum marketing company in 1994.

The company started the Retail Station services operation with a fuel service Station in Ejigbo, Lagos in 2006. The multi-million petroleum marketing business expanded rapidly with the establishment of several other service Stations in other parts of South-Western States.

FGN Concludes Plans To Privatise Key Assets

Olaniwun Ajayi
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FGN Concludes Plans To Privatise Key Assets
In recent years, the Federal Government of Nigeria (FGN) has demonstrated its preference for the adoption of privatization as a way of managing its economic responsibilities to its citizens.

With dwindling crude oil revenues and the ever-increasing costs of governance, the Federal Government has again resorted to privatization as a means of improving liquidity, reducing operating costs and improving the operational efficiency of certain government assets given the depth of resources and higher levels of expertise that abounds in the private sector.

FEC Approves a New Debt Management Strategy for Nigeria brandspurng2

According to news reports, the FGN has once again concluded its plans to dispose of at least 36 of its properties between now and November 2022. The FGN intends to use the proceeds realized from the disposal of these assets to fund the 2021 budget.

The assets cut across energy, industries, communications and infrastructure, and will be disposed of using different sale strategies. Some of the assets will be privatized using a ‘core investor sale’ which involves a sale of at least 51% of the shares of an entity while others will be privatized by way of asset sales or more temporary arrangements such as commercialization and concession.

The schedule of the proposed FGN-owned assets for privatization is provided below.
FGN Concludes Plans To Privatise Key Assets Brandspurng
The process for the sale of the Yola Disco has already begun and is nearing completion
FGN Concludes Plans To Privatise Key Assets Brandspurng1
Culled from the Premium Times Ng website – https://www.premiumtimesng.com/news/headlines/443532-exclusive-nigeria-to-sell-refineries-icc-34-others-full-list.html

None of the reports provides exact or estimated figures as to the total sum of money the government expects to raise from the privatization exercise. However, it is reported that in addition to the funds to be raised from the sale of the government assets, the FGN intends to also borrow $14.69 billion from local and international lenders.

In the country’s 2021 budget, a statutory transfer of $1.3 billion and $8.65 billion was approved for debt services. From the foregoing, it is clear that the funds raised from the privatization exercise will be used to shore up the country’s finances and keep the national debt at sustainable levels.

The proposed sale of the 36 public-owned properties will be the latest major privatization exercise following the privatization of the assets of the Power Holding Company of Nigeria which was largely concluded in 2013.

Prior FGN-asset privatization efforts have yielded mixed results. Whilst there appears to have been some success from a fund-raising perspective, the success of past privatization exercises has been doubtful from a holistic cost reduction and operational improvement perspective.

A number of the assets listed have been subjects of previous partial or total privatization efforts in Nigeria, including the National Integrated Power Projects (NIPP) Assets, which were subject to significant investor interest but was ultimately unsuccessful due to a number of technical issues (not least of which was feedstock availability) and bankability concerns arising from the documentation provided by the Federal Government to bidders for the assets.

Also, Yola Electricity Distribution Company was successfully privatized by the Federal Government in 2013 but the transaction was subsequently unwound, when the private sector investor exercised its ‘put option’ in respect of the shares acquired – on account of insecurity and related issues in the company’s coverage areas.

For some of the others, it will be interesting to see the deal structure and terms that the Federal Government takes to the market in a bid to draw investors. For instance, with assets such as the refineries, the changing competitive landscape will certainly make potential deals quite interesting – in particular, sector observers will be keen to see how the Dangote Refinery (due to come onstream in 2022) and the proposed BUA Refinery (due to begin commercial operation in 2024), as well as the various modular refineries which the Department of Petroleum Resources seems to be encouraging, will impact investor appetite for the assets.

It will also be interesting to see how the proposed concession of the Transmission Company of Nigeria’s assets will be undertaken, in view of the proposed establishment of an independent system operator (as distinct from the market operator, both functions currently undertaken by TCN), and bearing in mind the various issues with the now terminated operation and management arrangement with Manitoba Hydro.

Also, as it relates to the assets slated for restructuring and/or recapitalization (such as the Federal Mortgage Bank, Federal Housing Authority, and Bank of Agriculture), it is unclear what specific mechanisms the FGN intends to deploy to implement these restructurings – whether by morphing them into public companies and then seeking investments on the capital markets or simply injecting new capital through the Central Bank of Nigeria or other liquid government entities.

CONCLUSION

This is an interesting development, undoubtedly one that will be monitored by investors keen to deploy capital towards infrastructure and other assets falling within the identified groups. In view of some of the challenges with previous privatization efforts in Nigeria, it remains to be seen how this process will be implemented by the Federal Government.

For potential investors, it will be important to pay particular attention to the diligence, structuring and documentation aspects of the process for any deal – and perhaps, given the Federal Government’s apparent keenness to execute this process successfully, there may be more flexibility from the government, and scope for investors to propose some more creative solutions to challenges that may arise.

In all of these, it will be critical to engage skilled and experienced advisers and partners to assist with navigating the complex and challenging, but ultimately rewarding, Nigerian market.

Credit: The article “FGN Concludes Plans To Privatise Key Assets” first appeared in Olaniwun Ajayi Newsletter on March 12, 2021.

With nearly 60 years’ experience in helping organizations and individuals achieve their goals, Olaniwun Ajayi LP has a track record of involvement in some of the largest and most complex transactions in dynamic sectors of the Nigerian economy. Our unparalleled capacity to handle intricate legal issues is the bedrock of our practice, and our clients depend on us to help translate their opportunity into reality.

MTN Nigeria Communications Plc Series III and IV Commercial Paper Issuance Now Open

Esan Bolaji
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0
MTN Nigeria Communications Plc Series III and IV Commercial Paper Issuance Now Open
MTN Nigeria Communications Plc (MTN Nigeria) Series III and IV Commercial Paper Issuance, under its N200 billion Commercial Paper (CP) Issuance Programme, is NOW OPEN. The proceeds from the Offer will be applied towards MTN Nigeria’s working capital and general corporate purposes. The Offer is scheduled to close on Wednesday, March 19, 2021.

MTN Nigeria is the leading telecommunications operator in the largest telecoms market in Africa. The Company is the largest mobile operator and undisputed market leader in Nigeria as measured by total mobile subscribers (c. 76.5 million), active data users (c. 32.6 million), revenue (almost 50% of industry) and profit pool.

MTN’s mPulse hackathon offers funding for solutions to COVID-19 challenges
MTN’s mPulse hackathon offers funding for solutions to COVID-19 challenges – www.wordpress-1516176-5827464.cloudwaysapps.com

MTN Nigeria is well-positioned for the long term with its unmatched investments in its infrastructure – most expansive 2G, 3G, and 4G network, largest fibre network (c. 29,500km) spanning across Nigeria, largest physical and digital distribution platform, and wide range of spectrum holdings – coupled with the exciting Nigerian market opportunity.

Nigeria offers an attractive telco market proposition as Africa’s largest economy and most populous country. Mobile voice and data subscription continue to be a major part of consumer spending, largely driven by increased adoption by the young population. It is important to note that in the prevailing COVID-19 environment, MTN Nigeria continues to sustainably strengthen its subscriber base, while customer voice and data usage remains resilient.

MTN Nigeria was issued a corporate rating of Aa by Agusto & Co. which reflects the Company’s history of strong financial performance – record revenue in excess of N1 trillion (largest revenue by a listed corporate), stable and healthy operating profit metrics (c. +50% EBITDA margin), comfortably low leverage (0.4x Net Debt/EBITDA) predominantly in a local currency,  strong fee cash flow – it’s experienced and dedicated management team, and the beneficial relationship with MTN Group – Africa’s leading cellular telecommunications company servicing over 251 million subscribers, with a strong presence in 21 countries (including the Middle East).

Please see below, the indicative terms of the Offer:

MTN Nigeria Communications Plc Series III and IV Commercial Paper Issuance Now Open Brandspurng

Ogun State to Begin Estates for Low, Middle Income Earners in Ota, Ilaro, Sagamu, Ijebu Ode (Photos)

Esan Bolaji
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Ogun State to Begin Estates for Low, Middle Income Earners in Ota, Ilaro, Sagamu, Ijebu Ode (Photos)

The Ogun State Government says it has earmarked large portions of land in Ota, Ilaro, Sagamu and Ijebu Ode to host housing estates for middle and low-income earners in the state.

Disclosing this at the weekend, the State Commissioner for Housing, Jagunmolu Omoniyi Akande, explained that the decision to embark on the housing projects was in consonance with the determination of the Dapo Abiodun-led administration to provide 2,500 housing units in the state in its first term.

Ogun State to Begin Estates for Low, Middle Income Earners in Ota, Ilaro, Sagamu, Ijebu Ode (Photos) Ogun State to Begin Estates for Low, Middle Income Earners in Ota, Ilaro, Sagamu, Ijebu Ode (Photos)
He added that locating the planned low and medium-cost houses in Ota, Ilaro, Sagamu and Ijebu Ode was to ensure equitable distribution of amenities and projects in the three senatorial districts of the state.
Jagunmolu stated further that the 150 units of two and three bedrooms at Prince Court Estate was commissioned at Kemta, Idi Aba in Abeokuta, while the 500 units of similar description are on-going at Kobape in the Ogun Central Senatorial District.
Ogun State to Begin Estates for Low, Middle Income Earners in Ota, Ilaro, Sagamu, Ijebu Ode (Photos) Ogun State to Begin Estates for Low, Middle Income Earners in Ota, Ilaro, Sagamu, Ijebu Ode (Photos)

He, however, disclosed that the projects in Ota, Ilaro, Sagamu and Ijebu Ode will begin after the completion of the ongoing housing project at Kobape.

“We are now putting final touches to the King’s Court Estate, which is currently under construction, in Abeokuta, the state capital. That project is being managed by the Ogun State Property and Investment Corporation, OPIC.

Ogun State to Begin Estates for Low, Middle Income Earners in Ota, Ilaro, Sagamu, Ijebu Ode (Photos) Ogun State to Begin Estates for Low, Middle Income Earners in Ota, Ilaro, Sagamu, Ijebu Ode (Photos)

“Meanwhile, Phase 2 of the Prince Court, Kemta is at an advanced stage and would be completed later in the year”, the Housing Commissioner submitted.

Ogun State to Begin Estates for Low, Middle Income Earners in Ota, Ilaro, Sagamu, Ijebu Ode (Photos) Ogun State to Begin Estates for Low, Middle Income Earners in Ota, Ilaro, Sagamu, Ijebu Ode (Photos) Ogun State to Begin Estates for Low, Middle Income Earners in Ota, Ilaro, Sagamu, Ijebu Ode (Photos) Ogun State to Begin Estates for Low, Middle Income Earners in Ota, Ilaro, Sagamu, Ijebu Ode (Photos)

Which Health, Food Segments Are Missing Out On The E-Commerce Boom?

Brand Spur
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Which Health, Food Segments Are Missing Out On The E-Commerce Boom?

NielsenIQ – The pandemic has introduced over 22 million new U.S. shoppers to the online channel since March 2020, but growth in online sales hasn’t been equal across categories.

While overall growth has been strong among online sales of health, beauty, and food products, some segments within these broader categories have yet to gain e-commerce traction. Retailers now have the opportunity, however, to implement new tactics that will create a seamless customer experience and tap into the fast-growing e-commerce channel.

Immediacy drives in-store shoppers

In the last year, e-commerce has captured more than its fair share of dollars for many product categories, with most of those falling in the health and beauty care segment. In fact, 21 of the top 30 categories with the largest e-commerce dollar share were health and beauty products during the 52 weeks ended Dec. 26, 2020.

And while many of these products are soaring beyond their pre-pandemic e-commerce growth records, a handful of health and beauty categories remain predominantly driven by in-store sales growth.

Which Health, Food Segments Are Missing Out On The E-Commerce Boom Brandspurng1

Despite the e-commerce lift spurred by pandemic purchasing, shoppers have made a little movement towards the online buying of categories like respiratory care, feminine care, oral hygiene, and deodorant.

According to NielsenIQ’s Omnichannel Shopping Fundamentals Survey, the top three barriers to the online entry for health and beauty products include a preference for shopping in-store, immediate needs for a given product, and longer-than-ideal delivery timeframes. In addition, survey respondents indicated a strong preference for shopping at mass merchandisers, grocery, and drug stores when purchasing the aforementioned products.

Online retailers have an opportunity to alter shoppers’ perceptions of what is the “most suitable” channel for everyday health and hygiene necessities. Less than 4% of brick and mortar shoppers surveyed considered online to be the most suitable channel to purchase the identified categories of respiratory care, feminine care, oral hygiene, and deodorant.

There’s an opportunity to encourage more consumers to overcome perceived barriers to immediacy. By offering and heavily promoting the trial of subscription services, for example, retailers can fulfil shoppers’ needs in a highly convenient, timely, and loyalty-driven manner.

Quality barriers remain for online grocery

Digital grocery sales grew by 125%, bringing online’s share of total food and beverage sales to 12% during the 52 weeks ended Dec. 26, 2020. Despite this record growth, some online food categories are still almost entirely purchased in-store, with many of these products being perishable.

Of the top 30 categories with the highest in-store dollar share, 25 of these categories are food items, and there are key reasons why shoppers are sticking to their brick and mortar roots with many food purchases.

Which Health, Food Segments Are Missing Out On The E-Commerce Boom Brandspurng1

Revealing a compelling trend, scepticism around product quality discouraged 37% of consumers from buying frozen, fresh, and refrigerated foods products. This speaks to concerns of cold chain failures that could impact the eventual eating experience.

Another 46% of shoppers have been hesitant to purchase fresh, frozen, and refrigerated products due to their preference for selecting these items in-person. In these instances, consumer fears of product ripeness or potentially receiving a product nearing its expiration date, are coming to bear.

E-tailers can help alleviate quality concerns surrounding perishable products by promising prompt delivery timeframes while also ensuring that online pick-up and delivery orders offer an identical quality proposition to perishable products purchased in-store.

Break down online barriers for fresh items like fruit, vegetables, and meat by incorporating capabilities into your online platform that enable shoppers to select foods based on attributes like ripeness and size. In addition, retailers can help shoppers further compare products online by profiling nutritional facts and ingredient information.

Recommendations for future growth

As the vaccine rollout progresses and shoppers feel more confident venturing to brick and mortar stores, some pandemic-related behavioural shifts will fade away, while some will have a lasting impact on consumption.

E-tailers need to ensure that they are providing solutions to widespread concerns such as immediate need, product quality and prompt delivery windows in order to break down barriers to online entry and further entrench consumers in their online habits.

Omnichannel shoppers expect their standards to be met in terms of price, convenience, and product availability, regardless of channel, meaning retailers need to ensure that they’re presenting an equal and seamless online and offline shopping experience.

This can be accomplished through identical online and offline product assortments and creating frictionless experiences for shoppers through home delivery, in-store pickup, or traditional brick and mortar shopping.

In addition, shoppers of all circumstances have been searching for the best deal as the future outlook remains uncertain. As such, offering the same promotions both in-store and online, in addition to price-match guarantees, will go a long way in retaining and attracting buyers in the long run.

As we progress into 2021, delivering a seamless customer experience, both online and offline, will be imperative to capturing growth as the omnichannel retail landscape further develops.

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