Nigeria: Digital Economy, Still Scratching The Surface

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The growing appetite for mobile data usage, as well as increased network coverage, has increased the potential of Nigeria’s e-commerce market.

The potential impact of a thriving e-commerce market is improved trade activity as it provides a cost-effective method of connecting producers and merchants directly to customers and a faster way to increase their visibility.

Industry sources suggest Nigeria’s e-commerce market value could hit US$50bn over the next decade. These spreads across retail, content distribution as well as travel and tourism amongst others.

To accelerate online retail platform usage, consumers must be open to making payments with e-payment solutions.

Development of e-commerce could be a sign of rapid growth in consumer demand as well as an emergence of the middle class. Alternatively, it is a case of shopper migrating from online to conventional store purchases.

E-commerce has been the creation of a global marketplace where consumers can purchase products across the globe from the comfort of their homes.

Mall for Africa has positioned itself as a leading e-retail platform championing this global market connectivity. The retail platform provides access to over 200 premium stores in the United Kingdom and United States.

In August 2017, Mall for Africa partnered with eBay and DHL to allow vendors from African countries sell products on eBay’s US shopping site; Mall for Africa screens and selects the retailer as well as handles payments on its proprietary platform while DHL functions as the shipping partner. This is laudable. However, for Nigerian retailers to leverage fully on this platform, the standard of products created for sale need to be high to ensure a strong competitive advantage.

The potential impact such partnerships could have on growth for SMEs within Nigeria is enormous. Digital platforms could offer a workaround for buyers and sellers to increase business interactions across regions.

The gradual growth of the digital economy is also playing a pivotal role in Nigeria’s e-tourism industry. Based on data from Jovago (a leading hotel booking company), 27% of Nigerians use online platforms to book and pay for hotel rooms while 73% pay on arrival. In addition to this, 51% of Nigerians prefer to book less than a week in advance. Mobile data usage has had a positive impact on the e-tourism market, deeper internet penetration will accelerate migration of offline travellers to the e-travel space.

 

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