The E-commerce business has become one of the fastest and easily adopted businesses in Africa particularly in Nigeria where a majority of people make use of smartphones and advanced devices. With the innovation of e-commerce, daily activities have become a little bit more easy to carry out. Today, people don’t have to stand in long queues at the bank to make transactions, getting a cab has become as easy as clicking a button on your phone and one can do all sorts of shopping without stepping of their homes. It is safe to say that e-commerce has made the world a better place.
However, taking a look at the current economic situation in Nigeria, the ultimate question being often asked is can the e-commerce business be sustained in Nigeria? It was not too long ago that the likes of Jumia, Konga, Payporte, Dealdey, OLX and so many other promising e-commerce businesses stormed the business industry with their new prospects which made everyone excited. Within months these e-commerce businesses became so successful that they expanded across Africa. As at 2017, the e-commerce industry in Nigeria was valued at $13bl (N4.5trl) and was estimated by The National Bureau of Statistics (NBS) to hit N10trl in 2018.
Unfortunately, the Nigerian economy hit a huge recession in 2015 which has been lingering till date, with the new economic reforms initiated by Nigeria’s incumbent President to fight corruption and revive the economy which is believed to have been in disarray over the years. With the rise in dollar rate and restrictions on importation, many businesses have been left struggling while some have even completely shut down operations within the country and investors have withdrawn. The e-commerce business was not left out in this struggle, so much that the top players in the industry within the country such as Konga, was forced to sell as a result of the economic pressure and OLX shutdown its operations in Nigeria.
There is no doubt that the e-commerce business is a very lucrative one with the digital revolution which gives it its high demand. However, Nigeria’s dwindling economy has raised many concerns and questions on if e-commerce is actually a sustainable business in the country. A lot of factors go into managing an e-commerce business and with the increase in the cost of doing business, many are not yielding as much profit as expected. This is a serious question which can only be fully answered when Nigeria’s economy fully regains its strength. Meanwhile, the e-commerce business remains and continues to thrive regardless, because it is more or less Africa’s future and the stepping stone to attaining the advanced technological growth that most developed countries have already surpassed.
Olatorera Consultancy Limited is a new-generation consulting company providing business development and consulting services to established companies and high net-worth individuals. Olatorera Consultancy provides critical and analytical services to companies under our radar to enable them innovate and serve their clients more effectively and efficiently using digital resources and modern strategies. Olatorera Consultancy provides the seal and stamp of Africa’s Best to enable great companies compete stronger on a global scale. Olatorera Consultancy publishes an annual list of “Africa’s Best 100 Companies” and “Africa’s Best 100 Leaders”.