Knowhow Media International Reports: SEGUN ORUAME and MARTIN EKPEKE
The Christmas season is here and the shopping spree initiated by online retailers during Black Friday, last month November, is bound to continue. The ecommerce sector is picking on real fast among Nigerians, particularly those in Lagos. As the statistics shows, the online retail sector has just turned on its high-yielding curve.
Konga recorded 1440% year on year increase in online revenue during its Black Friday sales tagged ‘Yakata’ a pidgin word for ‘Massive’. The company recorded over 500% more items in the two days than in all of 2012 and processed 50 million worth of orders every hour. Jumia, another leading online store, recorded over 1,500,000 visits and a tenfold increase in sales within 24 hours that it opened its Black Friday sales. According to Afam Anyika, Jumia’s head of Offline Sales, the Black Friday sales recorded the highest numbers of sales and visits by any website in Nigeria in a single day.
Virtually all the online retail stores recorded unprecedented sales figures including DealDey. Cheki, Buyology, Buy, and Wakanow among others. This xmas, online retailers are itching for more bumper sales in one of the countries most lucrative and novel sectors.
“By the figures quoted by the country’s Minister of Communications Technology, Dr Omobola Johnson, at the just ended ITU World in Doha, Qatar, the sector has grown from 1000 orders per day in 2012 to an average of 15, 000 per day in 2014 with a potential for over 300, 000 orders per day. The online retail sector currently employs over 15, 000 jobs. The market value in terms of sales/size grew from $35 million in just 24 months in 2012 to $550 million to become one of the fastest growing sector. Its potential market size at early to mid-maturity is touted at $10 billion.”
So this month, when you click on an online store to make purchase, you are part of a growing community of online shoppers desiring to leverage on the lower cost of purchase and convenience that comes with online shopping.
What are customers buying as they click? Jumia revealed that during Black Friday, customers’ favourite deals like flatscreen TVs, digital cameras and ventilation systems were sold out within a few hours. Both Jumia and Konga expect sales figure to triple this
“Jumia understands the busy nature of Nigerians, especially in this Christmas period, and so we encourage people to do their shopping online. Shopping online allows you to fulfil your needs and wants wherever you are and whenever you want,” he urged.
However, the sector faces hiccups majorly infrastructure. Most shoppers click away via mobile internet delivered at less down desired speed. And poor roads still mean that delivery by online stores could suffer delay. Over 90% of the country is still uncovered by this phenomenon. But with improved roads, enhanced physical security on the highways and of course, availability of broadband, a much more explosive growth is bound to happen.
eCommerce activity has the capacity to significantly extend the reach of wholesale and retail trade in the country that will ultimately lead to accelerated economic growth and job creation, said Dr Johnson to an Investors’ gathering in Doha. Minister of Communication Technology said eCommerce represents many sectors and players coming together for economic gain. Barriers inhibiting growth include inadequate broadband access, high cost of internet and mobile communications services, low awareness amongst the public of the relevance of eCommerce to their lives, low consumer confidence in using electronic payment channels, and low availability of skilled personnel, amongst others. But as the industry gathers momentum, the challenges are addressed.
“We know there are these challenges, but the Federal Government is working to address them through its on-going implementation of the National Broadband Policy,” said Johnson. “Once broadband becomes available, the online stores will further boom as online culture is bound to become pervasive,” said Wole Aderigbe, Lagos based market analyst. The Nigerian government is currently pursuing a policy to encourage private sector led aggressive rollout of broadband with the licensing of InfraCos who are to enjoy tax holiday.
In cities where online has picked, users say the experience is fulfilling and enthralling. For Mr. Victor Eyo, a Port-Harcourt based financial consultant, shopping online gives him an honest bargain at the comfort of his home or office; he said his online shopping experience for the past two years have been awesome. “As I speak to you, everything that is needed to make this Christmas holiday comfortable for my family has been delivered to my house. I did the shopping online at home with my internet enabled device and paid with my debit card,” he revealed.
Ngozi Abana, a food items dealer in Lagos, who admitted not having any physical shop, but sells her items virtually via emails and sms, online retailing has opened a new vista for young Nigerians to tap into. Ngozi believes there are many advantages to doing business online, including the access to a huge customer base, as well as the freedom to shop anywhere, anytime, without carrying physical cash, thereby fulfilling the needs and wants of a customer.
Asked what the inspiration towards selling food items virtually was and what she has to say about sales during the Christmas period, she said she resigned from her previous job and decides to be selling food items online having seen what Jumia and others are doing. “Food is something which is essential and important to all since existence. Today, people are experimenting with shopping and with the advent of eCommerce websites; food products are available too, with just a few clicks and instant confirmation,” she added.
With a population tilting over 174 million; Nigeria carries the potential weight of being Africa’s online retail destination. It is the largest consumer market on the continent.