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E-commerce Logistics: Emerging Service With Growth Potentials


A despatch rider

A despatch rider

When e-commerce was first introduced in Nigeria, many doubted the motive of its promoters, who initially experienced low patronage. This is attributable to the fact that it was strange for Nigerians to buy items via the computer or other electronic medium, as they were only used to physical bargaining. Today, e-commerce is growing and offering an almost seamless shopping experience.

However, as e-commerce continues to thrive, purchase delivery became a challenge to online storeowners. Online retailers have issues delivering items to customers intact, and without damage, because of lack of professional handlers. When courier companies deliver products on behalf of online storeowners, they are usually impatient and don’t bother to know whether the customer is satisfied or not. Customers complain of little or no satisfaction in the area of specifications. This vacuum in e-commerce operation has presently given birth to e-logistics, a new business area that is promising better opportunity for savvy business people.

E-logistics provides an integrated, end-to-end fulfilment of the supply chain to merchants, and can be part of existing e-Commerce system in an enterprise. An example is Konga Express created by Konga solely for express delivery.

And though it started in Lagos, but today, e- commerce logistics has come to the rescue of online businesses, and is steadily growing, with frontiers extending to other states across Nigeria, albeit at a slower pace. Some Nigerians have recognised the gap between virtual demand and actual supply, and have kickstarted their own e-logistics companies to bridge the gap.

Even though e-commerce logistics appear to be new, stakeholders of that industry have attributed the growth of this sector to the success of e-commerce in Nigeria, which they said prompted creation of avenues to meet the particular need.

Coordinator of God is Good Logistics (GIG), Olufemi Olufela said of the development: “I observed that e-commerce is the new way of life, but most courier companies don’t have the patience to allow a customer inspect consignment to verify whether it is in good condition or not before paying for shipment. We see it as one area where courier companies are lagging, and today, we are bridging the gap and meeting the needs of both storeowners and their customers.

“When a merchant sends delivery to customers, most of them would want to inspect the received consignment, and then pay if they are satisfied. But we are willing to spend that extra time, unlike courier companies, depending on the volume of shipment at a particular time.”

Olufela believes e-logistics operators spend more time attending to customers than other logistics companies, adding that each delivery trip is planned in such a way that it will not eat into operations.
“Take for instance, for some courier companies, a single despatch rider can go out with about 50 different items, which must be delivered within a specific period of time. We recognise the need of online businesses, so a despatch rider for e-logistics may not undertake more than 30 deliveries per day, because a customer has at least 15 minutes to check out consignment, which most courier companies cannot afford to spare. They just deliver, sign delivery note and leave. However, we get paid for it, and most times, the consignments are not heavy, as some might weigh just 0.5KG or 1KG.

“The business is lucrative. You’ll be surprised that 10 per cent of Nigerians that have Facebook accounts would use the Internet for one form of purchase or the other. Imagine 10 per cent of Nigerians that subscribe to Facebook, Whatsapp or Blackberry, using them to advertise their goods, while others are purchasing. Even if one was supposed to deliver 50 consignments, but successfully delivered only 30, the volume would still make up for the undelivered 20. And the volume is increasing. We started with pay Porte, but now, we have over 50 e-commerce companies. Although those that are licensed to operate may not be more than 40, but the remaining 10 would eventually get their licence, when they see the benefits derived from incorporated businesses.”

For the Chief Executive Officer, Ace Logistics, Anselm Nsolo, people are venturing into the e-logistics business without understanding the intricacies.

“E-logistics is growing in Nigeria, and the opportunities are yet to be fully harnessed. People are rushing to start the business without understanding how it should be done. Some are not even aware that you can contract relocation services online. And although the business is good, but we still need to educate people more on it,” he said.

However, the business is not without challenges, both for the merchants and logistic organisations.

Tokunbo Fatimah is a merchant, who once had a sour experience with an e-logistic company. He narrated his ordeal thus: “e-commerce is fast paced and timely delivery is considered key to continuous patronage. I had challenges delivering my goods to customers, because courier companies don’t deliver to customers on time. Sometimes the goods are damaged by the time it gets to the clients. This, coupled with bad road infrastructure and traffic jams in almost every part of Lagos rendered the whole thing useless.

“Some despatch riders would sometimes run away with payments made by customers. There have also been situations, where delivery personnel ran to the market to buy the item at a cheaper rate or even substandard product to sell to customers only to return and say the customer rejected the items. After experiencing such issues, I started using men who run deliveries with their personal bikes or tricycles.

“Potential clients are usually scared because they don’t know who they are dealing with. People hardly trust their goods in the hands of a stranger, and this is why some customers prefer the pay-on-delivery option. Initially, automated tracking was a challenge, but today, there is tracking for local distribution. Sometimes, we collaborate with courier companies to track our parcels, so it is not a major challenge.”

He explained that e-commerce logistics is lucrative despite associated challenges.

“Even when a customer is dissatisfied with the product and refuses to pay, we still get paid, as we have insurance for goods. So, when there are damages, our insurance partners usually sort them out,” he said.

On the future of e-logistics in Nigeria, he said; “The future is promising, because the Nigerian population keeps growing daily. The prospects are there, but we need government to make business friendly policies, good road network, as well as put relevant infrastructure in place. When some items were prohibited, we had issues and could not bring them into the country. And now, some businesses have almost collapsed with the prohibition from foreign exchange window.”

Enumerating the advantages of e-commerce and logistics, Olufela said, “I can tell you the price of a pair of shoes without leaving my house. People won’t bother going to the market, when they know it is what they can do in the comfort of their homes. This is why e-commerce is growing in Nigeria. Initially, the fear of fraud prevented people from patronising e-commerce. But because of exposure and awareness, people now know the big names in the industry, and once the clients know you won’t disappoint, and the quality is certain, they won’t mind paying in advance. If e-commerce can do this much in its few years of entry into the Nigerian market, I can tell you that if we don’t disappoint as the middle men between both parties, more people would decide to pay in advance without fear. With this, more logistics organisations would emerge.”

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