Wednesday, February 19, 2014

Challenges facing e-commerce in Nigeria

When Jeff Bezos started Amazon in 1994, he had a clear vision to create the biggest market place on the internet. Today, that dream has come to fulfillment. With a market capitalization of about $165 billion, Amazon is clearly the biggest marketplace online. This has been followed by other e-commerce websites especially in other countries.

One popular e-commerce website is Chinese company Alibaba which is estimated to have a worth of over $70 billion. Actually, this post is based on e-commerce websites in Nigeria like Jumia, Konga, Buyam, etc. Although e-commerce websites are doing well in Nigeria considering the time they came into the market, it cannot be denied that they’ve had many challenges and they probably would have been doing better in another terrain.
Challenges facing e-commerce in Nigeria
Image: optimizely
They have faced many challenges and are still facing them today. I want to list some here.
Trust
Nigerians have been labeled as fraudsters and this view is always consolidated by the Western media at every opportunity. This has gone on to the extent that even Nigerians who deal with other honest Nigerians have started becoming skeptical of obvious evidence.
Many Nigerians would tell you that they would rather buy from Amazon and pay for shipping than buy from a Nigerian e-commerce site. Many people would have problems parting with their money when the product is not yet in their hands because of the trust issues.
E-commerce sites in Nigeria has included ‘pay on delivery’ option to remove this doubt but this option is limited to specific cities in Nigeria and risky for the e-commerce company (it’s necessary in this market though).
Urban and Regional Planning
To say the truth, the planning of so many places in Nigeria is awful. Most places are without specific addresses because even the town planner wouldn’t be able to tell the specific number of the house or the street it was located.
Many people stop buying products online because of this specific problem. Nobody wants to buy a product that will be delivered to another address except if it’s an explosive which was meant for another address. I don’t think Nigerian e-commerce sites sell those anyway.
I think there is very little e-commerce sites can do about this as it is out of their control. It is one of the conditions they will have to work around to survive in this market. This issue affects far more than e-commerce websites as many people have problems receiving important documents at their places because they don’t have an address.
Faulty Postal Services
Okay I’m not sure and I don’t want to assume but I think I can safely say that the Nigerian Postal Service is almost dead. It is funny that people find it easier in the olden days to receive goods/products at their door steps than today.
Many people have had many experiences where money or products like smartphones have gone missing in the parcels that were to be delivered to them. This has led to complete loss of trust in the postal system.
Many have resorted to DHL and other courier services but the cost is very high. Unfortunately, when you factor the time and cost that will be saved when you buy at a mall very close to your house, you’ll tend to leave the e-commerce website as fast as possible.
Many have complained about slow delivery with some people living in places like Lagos and Abuja not getting products they ordered for a week after placing the order. This is why a company like Amazon is trying to deliver products to buyers as fast as possible, even to the extent that Amazon wants to be able to predict goods people will order and send them before they place the order.

Personally, I believe e-commerce websites would be making nearly double of what they are making now if these challenges can be tackled successfully. One thing that is sure though, e-commerce websites needs to convince Nigerians that their platform can be trusted, is fast, and also relatively cheap before many people will consider abstaining from physical marketplaces.
Do you know any other challenge(s) facing e-commerce that has not been stated in this post? You can tell us in the comments.
Reactions:

2 comments:

  1. very true. We still have a long way to go.

    ReplyDelete
    Replies
    1. I think things will improve with time and hardwork from e-commerce companies. Thanks for dropping your comment.

      Delete

What's your view on this? We'll be happy to listen to your opinion.

Related Posts Plugin for WordPress, Blogger...