| Nigeria | Mar 27, 2017
In Nigeria, the ICT industry has seen an immense boom and has opened new business opportunities for many professionals who have the ability to tap into new markets and ideas. […]
In Nigeria, the ICT industry has seen an immense boom and has opened new business opportunities for many professionals who have the ability to tap into new markets and ideas. According to the Nigerian National Bureau of Statistics, the ICT sector grew by 8.7% YoY 1Q2016, while Minister of Communications Hon. Abdur-Raheem Adebayo Shittu told TBY the growth of e-commerce in the country is exponential and that many companies are keen to get involved. In fact, the ministry expects to develop more than 10 new technology villages and knowledge centers across the country by the end of 2017. Though the percentage of individuals using the internet in Nigeria is less than half of the population, an increasing number of Nigerians are tapping into the lucrative prospects of online businesses and are getting familiar with its aspects. Players in web-based businesses interviewed by TBY believe there is great potential in the sector and that the Nigerian internet market is highly lucrative, though the market is still in its infancy.
In order to attain widespread success, e-commerce platforms need to overcome various structural obstacles. A major hurdle is the payment process for online transactions. In contrast to customers in western countries, many customers in Nigeria still prefer to pay cash on delivery; in fact, the country has a relatively lower penetration of debit and credit options for online payments. According to a survey by PayPal, 31% Nigerians who do not transact on the web are concerned by payment security and cite it as the reason why they do not trust website-based businesses. Nevertheless, 65% of internet users admit to already shopping online while another 24% say they intend to make purchases over the internet in the future.
In an interview with TBY, Shola Adelkoya, the CEO of Konga.com, noted the key to its success is the company’s offering from the very beginning the option for customers to pay on delivery. The company recently launched Konga Pay. “This is a solution so that SMEs and individuals can turn their phone into a POS. It eases the process of collecting electronic payments and makes payments on the Konga platform easier. We are also the first in the world to allow merchants to put their products on social media and be able to collect payments electronically; if an individual has an Instagram page, they will be able to collect payments from their phone. We hope to be able to resolve some of the payment issues that exist in the markets as part of a whole ecosystem,“ Adelkoya said.
Another revolutionary website-based business is Wakanow, which saw a major gap in the Nigerian travel space and launched an online travel company that offers a one-stop portal as well as mobile applications to search, compare, and buy affordable flights along with hotels associated with other traveling-related services in Nigeria and Africa. The site offers hotel reservations, flight tickets, car rentals, and many other services via a broad partner selection and facilitates payments with its Pay Small Small installment payment product that allows clients to split payments. Former NBA player and Group MD Obinna Ekezie told TBY, “The fact that we are an African company allows us to provide special services to customers that otherwise might not be readily available or accessible through other international platforms.“ Ogavenue, an event booking platform, is another example of a website that is finding its own space in the Nigerian online market. Established in August 2015, it has already over 6,000 venues listed all over Nigeria.
Although a great deal of work still needs to be done in order to get online shopping to become a part of daily life, certain tech-savvy companies have managed to spread the word and are taking the market to new horizons. Online businesses have started to become a success story in Nigeria, especially amongst the youth, providing locals with a safe, easy, and convenient way to buy and sell their favorite products and services.