Without any doubts, human beings love shopping. Everybody enjoys new stuff – from shiny new shoes to the latest sophisticated gadgets.
Who wouldn’t like an upgrade from iPhone 6 to iPhone 7? Or who wouldn’t want to wear that new design everyone’s talking about?
Previously, shopping was done physically. You’d have to go to the market (or boutique, supermarket, auto dealership) and buy what you need. You’ll also do a lot walking, sweating, and sometimes swearing (in some local tongue) over the price of goods.
Technology is, however, changing things. With the internet, you can now buy new stuff and have it delivered to your doorstep – at the push of a button on your iPhone 7.
As a result, e-commerce has evolved over the years globally, meeting people’s need effectively and efficiently. In the US and Europe, e-commerce is thriving and plays an important role in everyday life. However, this isn’t the case in Nigeria and most parts of Africa.
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These are the reasons why:
1. Low internet Penetration and network unavailability
This is a major problem all over Africa. Internet penetration isn’t at a stage that will favour e-commerce. Also, internet connection isn’t always available due to several reasons. How would you order for those hot pants on Jumia if you can’t even access the internet? This is killing business. For everybody.
2. Trust issues with Nigerians
There’s this thing among Africans- we don’t have the courage to trust each other, let alone internet companies. There’s a scepticism among online shoppers. Most people would hardly offer to pay for goods up front. We often opt to Pay on Delivery, and then send the messenger back, with one excuse or the other.
Apart from this, a larger percentage of Nigerians don’t trust e-commerce firms to deliver the goods they promised online. A beautiful red robe, when delivered could look like an ugly red apron, and this damages the trust between consumer and e-commerce firms, hindering the business from flourishing as it should.
3. Low Purchasing Power
Times are hard and the masses are complaining. The purchasing power of the average African man is low when compared with his American counterpart. The income of the average Nigerian doesn’t allow much allocation for shopping, either physical or online. A hungry man doesn’t look for money to shop online, his primary objective is to quench his hunger. Shopping will come afterwards- if there’s enough money left.
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4. Unfavorable Business Climate/Government Regulations
It’s not easy to establish or run a business in Nigeria, and the World Bank can attest to this. According to Tony Elumelu (CEO, Heirs Holdings, Transcorp, UBA, etc) Nigerian laws are too stringent for businesses to run smoothly. There’s an enormous amount of trouble (and bureaucracies) to face when trying to register a business in Nigeria, and once that’s done, there’s a huge amount of tax to pay too.
Apart from these, the cost of running a business in Nigeria is unusually high. Expensive power and transportation costs have negative impacts on e-commerce businesses, making business hard and tardy.
5. Poor Infrastructure
Nigeria still lacks adequate infrastructure to ensure timely delivery of ordered packages. You could order for the latest Tecno tablet and longer than the stipulated time for it to arrive. At the moment delivery is efficient only in select places in Lagos, Abuja and Port Harcourt.
Until these issues are addressed, e-commerce won’t thrive in Nigeria or Africa as it should. It will require a considerable amount of cooperation between stakeholders, government and Nigerians for the business to flourish.