The Nigerian e-commerce industry has a lot of potential, thanks to the nation’s huge population, which makes it pretty much attractive for any daring investor. Be that as it may; it is clear that the industry is passing through a number of challenges, which are both internal and external.
Over the years, the issues of trust, innovation, and customer service within the Nigerian e-commerce ecosystem have become topical and the need to address them in order to deepen the growth of the industry cannot be overemphasized.
In my opinion, I believe that despite the obvious challenge of poor infrastructure, the industry must become more innovative; there is a need to improve on the trust level and take customer service to new heights so as to help deepen the culture of online shopping.
My position has always been that an e-commerce shop is not the easiest of business to run due to a number of factors. Once upon a time, we went into national e-commerce frenzy with everyone opening up online shops. I had friends who invested millions of naira in the industry despite my advice to the contrary. This is due to the fact that a lot is required to run a sustainable e-commerce business.
If you doubt me, go ask the Jeff Bezos, the founder of Amazon, who stated a number of times that if the United States did not have good infrastructure, Amazon might not have survived.
That said, I like the fact that key players in the e-commerce space such as Yudala, Konga and Jumia are doing all they can to stay afloat despite the complexities of running any kind of business in this clime.
I am particularly pleased with Konga’s recent ambitious move to add online groceries category, which virtually takes away 70 per cent income of an average Nigerian.
By implication, Konga will be in line with what the likes of Supermart and Gloo are doing, offering Nigerian customers both perishable and non-perishable items within the shortest time possible because, that is where the issue lies.
Logistics remains a huge challenge when it comes to online shopping in Nigeria and I can only imagine that the type of logistics required to run a grocery delivery business is certainly more bespoke. Think about it; who wants to order fresh vegetables and wait for days to receive them? This is why I think it is commendable that Konga is taking a shot at this segment.
From an economic perspective, if there is a conscious effort to improve logistics, more prospects will be captured into the sales funnel, which will automatically raise revenue and deepen the growth of e-commerce in Nigeria.
Despite being at the evolving stage, there are several reports that indicate that Nigeria’s e-commerce market growth rate is estimated at 25 per cent annually and can be worth $10bn. This simply shows that a lot more could be achieved in this particular sector of the economy, if properly coordinated and harnessed.
In spite of the efforts of current players increasingly seeking to create unique experiences for Nigerians by being innovative, there is still a lot more to be done before they can attain the heights of competing with the likes of Amazon or Alibaba.
On the issue of trust, frankly, there are a number of factors impeding trust within the e-commerce space. There are issues such as uploading beautiful images of products on the e-commerce site which are different from the physical products delivered to customers. There are also issues of fraudulent activities regarding online payment as well as the negative perception of online activities.
The trust issue goes on and on. Issues such as fraudulent activities regarding online payment may, however, not necessarily emanate from the e-commerce operators; hence, the reason, in my view, they resorted to Payment on Delivery (POD), which is a bit traditional and I do not see it going away anytime soon.
Sometime ago, the Nigerian Inter-Bank Settlement System (NIBSS) reported a high level of fraudulent transactions that amounted to about 8.8 per cent of online transactions.
Undoubtedly, this kind of report has the propensity to exacerbate the prejudices of Nigerians concerning online payment. This is a trust issue and could be catastrophic by negatively impacting on the revenue of e-commerce operators.
One of the ways to address the issue of online payment fraud and engender trust is to encourage strategic partnership between e-commerce operators and payment system operators.
Besides, adopting security measures such as using security certificates (SSL certificates) on e-commerce web pages, it is sacrosanct to deepen the growth of the sector by collaborating to allay the fears of distrust.
Although Konga has taken its time to ensure trust in the system by introducing KongaPay, an application that ensures the customers’ money is held in escrow up until sales transaction is successfully completed.
This system virtually works with all Nigerian banks to ensure the security of customer’s funds and is the first non-banking payment system to integrate the use of Bank Verification Number (BVN) to validate payments.
This is exactly the type of innovative thinking that I am talking about here, but then, how much acceptance it has received is a different ball game.
One general advice I think the industry needs to take to heart is customer service.
How much has the industry scored, so far, regarding customer service in Nigeria? This is obviously another topic to be discussed another day.
Awesome customer service, however, ought to start from the moment a prospect or customer hits the homepage and, of course, through every single stage. In some cases, customer service is further extended to stages of inquiry, complaints, and the return of goods. Each of these stages must be strategically and cautiously addressed to ensure excellent customer service.
These are some of the things that build confidence and trust in the minds of the customers.
In conclusion, there is hope for the industry but players need to come together and deal with any existing negative perception about online shopping.
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