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The State of E-Commerce Industry in Nigeria: Trends and Predictions

Last updated on December 20th, 2023 at 07:41 am

e-commerce in Nigeria has expanded significantly over the years, notably with the introduction of cell phones and internet access.

E-commerce has grown to be a crucial component of the Nigerian economy as more citizens accept online shopping as a practical and secure method of making purchases. We shall examine the present situation of e-commerce in Nigeria, trends, and future projections in this post.

Page Contents

Current State of E-commerce in Nigeria

With more Nigerians embracing the culture of online buying, the country’s e-commerce sector has seen substantial expansion in recent years.

With approximately $13 billion in revenue earned in 2019, according to the Nigerian Communications Commission (NCC), the sector has grown to be a significant contributor to the Nigerian economy.

E-commerce platforms have become more prevalent in the sector as well, with well-known names like Jumia, Konga, Payporte, and Jiji.ng. From electronics to clothes, household appliances, and food, these platforms provide a vast range of goods and services.

E-commerce in Nigeria continues to confront various difficulties despite the sector’s expansion. They consist of:

1. Poor Infrastructure

Nigeria’s poor infrastructure, such as power supply and internet connectivity, can be a challenge for e-commerce platforms. This affects delivery times and customer experience.

2. Payment Issues

Online payment methods are still not fully embraced in Nigeria, as many Nigerians still prefer cash-on-delivery (COD) payment options. This can be a challenge for e-commerce platforms, as it increases the risk of fraudulent activities.

3. Logistics 

Logistics remains a major challenge for e-commerce in Nigeria. Poor road networks, traffic congestion, and security issues make it difficult to deliver goods to customers on time.

4. High cost of data

The cost of internet data in Nigeria is high, which makes it difficult for many people to access e-commerce platforms.

5. Limited payment options

Many Nigerians do not have access to credit or debit cards, limiting the payment options available for online transactions.

6. Counterfeit products

There is a high prevalence of counterfeit products in Nigeria, which can affect consumer trust in online transactions.

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7. Low levels of financial inclusion

Many Nigerians are still unbanked, making it difficult to participate in online transactions.

Poor regulatory environment: The e-commerce industry in Nigeria faces regulatory challenges, including high taxes and tariffs.

8. Limited access to electricity

Many parts of Nigeria still need access to reliable electricity, which can impact the ability of e-commerce platforms to operate.

9. Competition from informal markets

Informal markets and street vendors still dominate many sectors in Nigeria, which can make it challenging for e-commerce platforms to compete.

What is the meaning of e-commerce?

The term “e-commerce,” which stands for “electronic commerce,” describes the exchange of products and services through the internet or through other electronic channels. In other terms, e-commerce refers to any transaction made via the internet or using a computer, smartphone, or other electronic devices.

Online retailers like Zappos and Warby Parker, online marketplaces like Amazon, eBay, and Alibaba, and subscription-based services like Netflix and Spotify are just a few examples of e-commerce.

Also, it encompasses business-to-business (B2B), business-to-consumer (B2C), and consumer-to-consumer (C2C) transactions, such as those made through peer-to-peer markets like Etsy and Airbnb.

Overall, e-commerce has transformed how consumers purchase and conduct business by providing more comfort, accessibility, and effectiveness than conventional brick-and-mortar establishments.

Essential participants in Nigeria’s e-commerce sector

There are several e-commerce platforms in Nigeria, but the following are the major players in the industry:

1. Jumia Nigeria

Jumia is the largest e-commerce platform in Nigeria, offering a wide range of products including electronics, fashion, beauty, and more.

2. Konga

Konga is another major e-commerce platform in Nigeria, selling products in categories such as electronics, fashion, and home appliances.

3. Payporte

Payporte is an online marketplace that offers products in categories such as fashion, electronics, and home appliances.

4. Jiji

Jiji is a classified ads website that allows users to buy and sell goods and services in Nigeria.

5. Mall for Africa

Mall for Africa is an online platform that enables consumers in Nigeria to purchase products from international retailers.

6. Slot

Slot is an online and offline retailer that specializes in selling mobile phones, laptops, and other electronics.

7. Kara 

Kara is an online electronics retailer that sells products such as smartphones, laptops, and home appliances.

8. Wakanow

Wakanow is an online travel agency that offers flights, hotel bookings, and vacation packages.

9.DealDey

DealDey is an online platform that offers discounted deals on various products and services.

10. Supermart.ng

Supermart.ng is an online grocery store that offers a wide range of products, including fresh produce, snacks, and household items.

These are just ten of the major key players in the e-commerce industry in Nigeria.

Many other smaller e-commerce platforms and online retailers are also operating in the country.

What is the future of e-commerce in Nigeria?

The future of e-commerce in Nigeria is promising, as the industry is expected to continue to grow and evolve rapidly. Here are some of the reasons why:

1. Increasing internet penetration

With the growth of mobile internet and affordable smartphones, more Nigerians are gaining access to the internet, which is driving the adoption of e-commerce.

2. Young and tech-savvy population

Nigeria has a large population of young people who are tech-savvy and comfortable with using digital platforms for commerce.

3. Government support

The Nigerian government has recognized the potential of e-commerce and is taking steps to support the growth of the industry through policies and initiatives.

4. Rising middle class

As the Nigerian middle class grows; more people are becoming comfortable with online shopping, leading to increased demand for e-commerce.

5. Improving logistics and payment infrastructure

The development of better logistics and payment infrastructure is making it easier for e-commerce companies to operate in Nigeria.

Increased investment

The e-commerce industry in Nigeria has been attracting significant investment, which is expected to drive growth and innovation in the coming years.

Overall, the future of e-commerce in Nigeria is bright, and the industry is expected to play a significant role in the country’s economic development.

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What is the market size of e-commerce in Nigeria?

As of 2021, the e-commerce market size in Nigeria was estimated to be around $13 billion, according to a report by the Nigerian Communications Commission (NCC). However, this figure is expected to grow significantly in the coming years, as more Nigerians continue to adopt e-commerce.

The growth of e-commerce in Nigeria has been driven by a combination of factors, including increasing internet penetration, rising middle class, growing smartphone adoption, and government support. These factors have created a favourable environment for the growth of e-commerce in the country, leading to the emergence of several successful e-commerce companies.

Despite the significant growth of the e-commerce industry in Nigeria, there are still many opportunities for further growth and development. With a population of over 200 million people, Nigeria remains one of the largest untapped e-commerce markets in the world, presenting significant opportunities for both local and international e-commerce players.

The 8 Pros of e-commerce in Nigeria

Here are some pros of the e-commerce industry in Nigeria:

1. Increased access to markets

E-commerce platforms provide businesses with access to a wider market, including customers in remote areas of Nigeria.

Convenience

E-commerce platforms offer customers the convenience of shopping from anywhere, at any time, using their mobile devices or computers.

2. Reduced cost of doing business

E-commerce platforms can help businesses reduce their costs by eliminating the need for physical stores and reducing overhead expenses.

3. Improved efficiency

E-commerce platforms can improve the efficiency of businesses by streamlining processes, such as inventory management and order processing.

4. Increased transparency

E-commerce platforms provide customers with more transparency about products and services, including pricing and availability.

5. Job creation

The growth of the e-commerce industry in Nigeria has created job opportunities in areas such as logistics, customer service, and technology

6. Increased financial inclusion

E-commerce platforms can help increase financial inclusion by providing consumers with access to online payment options and digital financial services

7. Improved customer experience

E-commerce platforms can provide customers with a better shopping experience, including faster delivery times and more personalized service.

8. Access to international markets

E-commerce platforms can help Nigerian businesses reach international customers, opening up new markets and opportunities.

Increased competition

The growth of the e-commerce industry in Nigeria has led to increased competition, which can benefit consumers by providing more choices and better prices.

These are just ten of the pros associated with the e-commerce industry in Nigeria, but there are many other benefits to the sector as well.

The 10 Cons of the e-commerce industry in Nigeria

Here are ten cons of the e-commerce industry in Nigeria:

1. Limited access to the internet

Many Nigerians do not have access to the internet, which limits their ability to participate in e-commerce transactions.

2. High cost of data

The cost of data in Nigeria is high, which can make it difficult for many people to afford to use e-commerce platforms.

3. Poor internet infrastructure

The quality of internet service in Nigeria can be unreliable, which can impact the ability of e-commerce platforms to function properly.

4. Limited payment options

Many Nigerians do not have access to credit or debit cards, limiting their ability to pay for products and services online.

Risk of fraud

There is a high risk of fraud associated with e-commerce transactions in Nigeria, which can impact consumer trust in online platforms.

5. Counterfeit products

The prevalence of counterfeit products in Nigeria can make it difficult for consumers to trust e-commerce platforms.

6. Poor logistics infrastructure

Delivery and shipping in Nigeria can be slow and unreliable, which can impact the customer experience.

7. Competition from informal markets

Informal markets and street vendors still dominate many sectors in Nigeria, which can make it challenging for e-commerce platforms to compete.

8. Limited access to electricity

Many parts of Nigeria still need access to reliable electricity, which can impact the ability of e-commerce platforms to operate.

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9. Regulatory challenges

The e-commerce industry in Nigeria faces regulatory challenges, including high taxes and tariffs, which can impact the growth and development of the sector.

These are just ten of the cons associated with the e-commerce industry in Nigeria, but there are many other issues that impact the sector as well

The 10 benefits of the e-commerce industry in Nigeria

Here are ten benefits of the e-commerce industry in Nigeria:

1. Increased access to goods and services

E-commerce platforms provide Nigerian consumers with access to a wider range of goods and services, including those that may not be available in their local area.

2. Convenience

E-commerce platforms offer Nigerian consumers the convenience of shopping from anywhere, at any time, using their mobile devices or computers.

3. Job creation

The growth of the e-commerce industry in Nigeria has created job opportunities in areas such as logistics, customer service, and technology.

4. Increased financial inclusion

E-commerce platforms can help increase financial inclusion in Nigeria by providing consumers with access to online payment options and digital financial services.

5. Improved customer experience

E-commerce platforms can provide Nigerian consumers with a better shopping experience, including faster delivery times and more personalized service.

6. Reduced cost of doing business

E-commerce platforms can help Nigerian businesses reduce their costs by eliminating the need for physical stores and reducing overhead expenses.

7. Increased transparency

E-commerce platforms provide Nigerian consumers with more transparency about products and services, including pricing and availability.

8. Access to international markets

E-commerce platforms can help Nigerian businesses reach international customers, opening up new markets and opportunities.

9. Increased competition

The growth of the e-commerce industry in Nigeria has led to increased competition, which can benefit consumers by providing more choices and better prices.

10. Improved economic growth

The growth of the e-commerce industry in Nigeria can have a positive impact on the country’s economy, creating new businesses and driving job growth.

These are just ten of the benefits associated with the e-commerce industry in Nigeria, but there are many other advantages to the sector as well.

Trends and Predictions that are associated with e-commerce in Nigeria

Here are ten trends and predictions associated with e-commerce in Nigeria:

1. Increased use of mobile commerce

With the rise of smartphone usage in Nigeria, more consumers are expected to use mobile devices to shop online.

2. Growth in social commerce

Social media platforms such as Instagram and Facebook are becoming popular channels for e-commerce transactions, with more businesses expected to leverage these platforms for sales.

3. Expansion of logistics infrastructure

E-commerce players are expected to invest in expanding logistics infrastructure, including delivery and warehousing, to improve the customer experience.

4. Adoption of digital payments

More consumers are expected to adopt digital payment options such as mobile money, which will drive the growth of e-commerce in Nigeria.

5. Expansion of marketplaces

E-commerce marketplaces such as Jumia and Konga are expected to continue expanding their offerings, attracting more businesses and consumers to their platforms.

5. Increased focus on customer experience

E-commerce players are expected to invest more in improving the customer experience, including faster delivery times, better packaging, and improved customer service.

6. Growth of niche e-commerce platforms

Niche e-commerce platforms targeting specific industries or consumer segments, such as fashion or electronics are expected to grow in popularity.

7. Increased adoption of e-commerce by small businesses

More small businesses are expected to adopt e-commerce platforms as a way to reach new customers and expand their businesses.

8. Use of artificial intelligence and machine learning

E-commerce players are expected to leverage AI and machine learning to improve their operations, including product recommendations, fraud detection, and inventory management.

9. The continued growth of the industry

The e-commerce industry in Nigeria is expected to continue growing in the coming years, driven by factors such as increasing internet penetration, rising consumer demand, and government support for the sector.

These are just nine trends and predictions associated with e-commerce in Nigeria, but there are many other developments to watch for as the industry evolves.

How to take advantage of the trends of e-commerce in Nigeria

1. Start your online store

Since the future of e-commerce in Nigeria looks promising, you can start your online store today so that your business will become visible to the growing internet-savvy market. There are about three ways to design an e-commerce website namely; 

  1. Website Builder
  2. WordPress
  3. Outsourcing to an expert

The first two ways are cost-effective, while the third one is a bit pricey. When you want to choose to use a website builder to design your website, the website builder you choose will give you templates that you can use for your design. If you are looking for a website builder to use for your online, we recommend the OLITT store website builder because of its versatility and low cost.

If you choose to use WordPress, then you will need to buy a domain name and hosting to get started, the domain name is the identity of your website online, while the hosting is the space given to you to keep your website so that visitors can retrieve the data anytime they want to. You can read this post on how to design a website with WordPress.

2. Leverage on the e-commerce marketplaces in Nigeria

Conclusion

The e-commerce industry in Nigeria has seen significant growth over the past few years and has become an essential aspect of the Nigerian economy.

The industry is poised for even more growth in the future, with trends such as mobile commerce and social commerce shaping the industry’s future.

Despite the challenges faced by e-commerce platforms, we can expect to see improvements in infrastructure and payment methods that will help make online shopping in Nigeria more accessible and secure.

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