Bridging the gap of standards, consumer protection in Nigeria’s $13bn eCommerce
The world today has grown beyond being a global village. It is now just a click away. The era of smart handheld devices has made the online space the only go-to avenue to seek knowledge and answers to man-made problems. Even when a child seeks his or her parents’ assistance on an assignment in school, the standard refrain is “go online, just Google it.”
Ditto for the world of shopping, that too has changed drastically in recent years. Today, online transactions, especially shopping, has joined the ‘Google it’ trend, with business deals running into billions of dollars and much more in other currencies are done online daily.eCommerce stores now must find ways to compete for customer loyalty, the same way brick-and-mortar stores have been doing for the last 100 years. New technology is allowing online retailers to do just this.
The statistics are quite revealing. Currently in Nigeria, eCommerce value is estimated at $13 billion. Last year, eCommerce sales amounted to $2.3 trillion.The same year, renowned online firm, Alibaba, recorded an impressive sales figure of $25.3 billion in a day at a single international shopping forum. Despite this good news, there are, however, tales of woes in online transactions and trade malpractices in digitalized marketing.The Guardian checks showed that there are over 400,000 orders daily in Nigeria. The sector has players including Konga, which recently merged operations with Yudala. Other operators include Jumia, Gloo.ng, Dealdey, Kaymu, and Wakanow, among others.
However, experts believe that for a more robust and efficient eCommerce sub-sector, in which the enlarged ICT ecosystem can find strength, a regulatory framework is seriously desired. To them, a regulatory framework would not only help to improve the level of customers’ trust but ensure quality for money spent.There are, however, some noticeable drawbacks. These are lack of internet access, poverty, a high rate of illiteracy, and logistical inefficiencies. Most of these problems still persist but technology advances, notably smartphones, have given millions more Africans access to the internet and mobile payment systems.
Africa is home to 54 countries and 1.25 billion people. Internet penetration is only 35 per cent according to Emergent Payments, a payment platform provider. Few consumers own desktop or laptop computers. Thus Africa is primarily a mobile ecommerce market.Other impediments to eCommerce are: Africans are apprehensive to purchase online due to fraud and delivery difficulties; lack of a national street address system in most African countries. The delivery person and the customer often have to stay in constant touch by mobile phone on the day of delivery. This, in combination with the lack of paved roads, keeps global logistics companies out of most countries; large segment of the African population is unbanked. The typical African digital consumer is young — the average age is 19. Older consumers prefer cash on delivery, which is still the dominant method of payment in Africa; and eCommerce merchants have to set up country-specific sites because of payment issues, logistics problems, and cultural differences.
Taking up the gauntlet, the Standards Organisation of Nigeria (SON) took the initiative and ensured that stakeholders converged on the Lagos Sheraton hotel recently to brainstorm on how consumers could enjoy safety and protection as they buy and sell online.On the rationale for the forum, the Director General of SON, Osita Aboloma, disclosed that the regulatory agency and other sister agencies, especially the Consumer Protection Council (CPC) have been inundated with increasing number of consumer complaints on the quality of products sold through the online platform.
Aboloma, who was represented by SON’s Director, Corporate Affairs, Dr. Paul Angya, also stated: “E-commerce as the name implies is a business that is on the rise today, and the internet’s vast potential has made it easier for organisations to reach out to a larger pool of customers and prospects. This underscores the need for the standardisation and regulation of the quality of products and services being traded through the cyberspace.”He added: “The promotion of awareness on standards and quality regulation in the eCommerce sector has become necessary as the drive for digitalised market increase and the pressure on the standards community mounts. These require that all stakeholders reckon fully with the realities of the competitive and fast-paced global economy.”
The SON boss was optimistic that the event would foster positive change that will ensure improved customer satisfaction and consumer protection and ultimately guarantee the safety and security of online sales and marketing as well as ensure that only quality goods and services are provided for the consumers.The Director General, Consumer Protection Council (CPC), Babatunde Irukera, in his presentation on eCommerce and consumer protection, stressed that the incredible advantages and boundless opportunities of eCommerce also come with some responsibilities.
In his words: “If you do not want to go to a store to buy, this convenience carry some responsibilities; hence the importance of standards and consumer protection”. Noting that eCommerce value in the country is presently $13 billion, Irukera said regulatory framework is critical because it has become a great avenue for economic growth.Stressing the importance of the consumer, the CPC boss declared: “Any business that does not prioritise consumer protection and satisfaction is living in its last days. The options that consumers have will not always be limited. The future for businesses can only be guaranteed if we deliver satisfaction and confidence to the consumer”.The CPC boss lamented that a warranty, which would have minimised the challenges of online business, is not as effective as it should be and urged manufacturers to address the issue.
According to him: “When consumers have an issue with a product, the distributor or seller simply says: ‘We also are marketers’, and would offer no relief. For the consumer, the question then is: take the product back to where? Hence, manufacturers must support their sellers to the very end. Sadly, here, those who purchase are at the mercy of manufacturers like those who sell. We are working on regulations to tackle these issues.He added: “We want a manufacturer that has a certain allowance for the distributor to take care of consumers. The manufacturer that does this should also be able to make demands and push government and regulatory agencies to do the needful. These should help SON and ensure appropriate regulation”.
In the second paper titled ‘The future of Standards and quality regulation in E-commerce,’ SON’s Director, Products’ Compliance Department, Tersoo Orngudwem, remarked that Nigeria must ensure conformity to international standards as SON is doing. “Standards are global, and the world is a global village. So, Nigeria and Nigerians must embrace standards. We need to make our E-commerce seamless like any other country in the world.”
Another presentation was given by the Chief Executive Officer of Survenia.com, Oluwadamilare Ogunleye, one of the 24 Africans who benefitted from a two-year E-Founders fellowship, which includes intensive courses at the Alibaba global campus in Hangzhou, China.Ogunleye, like Irukera, stressed the burden and beauty of eCommerce in his paper tagged ‘eCommerce Security and Regulatory Framework: Trading within and across borders.’He stated inter-alia: “Before this paper is over, two out of every 10 people in the world who have decided to purchase a particular item would likely have gone ahead to buy that item online. They would have moved on to other things, compared to their peers who are about to navigate the transportation bottleneck of where they reside.
“However, what they get in convenience, they repay in anticipation of the risk of something going wrong, of the feeling of having just being scammed, of the vendor not receiving payment, of receiving an item different from what they ordered, of receiving a bad or poor-quality item, of receiving the item late, of never getting a refund, and of regretting if they should have ever bought the item online at all.
“Therefore, consumer trust in digital markets is one of the main challenges in the development of eCommerce, and thus the need to come up with regulatory framework and standards that protect the eConsumer is of utmost importance. The underlying principle is to ensure a level of protection for consumers using eCommerce that is not less than that afforded in other forms of commerce”.Ogunleye recalled that last year, Nigeria passed the Electronic Transaction Bill, which provides a legal and regulatory framework for conducting electronic transactions, protects the rights of the consumers and other parties in electronic transactions and services, and ultimately facilitates eCommerce.
Urging stakeholders to take a critical look at the bill so that it would achieve intended purposes, he advised SON to collaborate with the National Information Technology Development Agency (NITDA), which is charged with the oversight issue of data in the bill, so as to develop appropriate standards for data classification, submission, processing, protection and storage.Ogunleye also urged SON and CPC to work together on appropriate consumer education campaigns to enable people to make informed choices of goods and services and to raise awareness of their rights and responsibilities. “Special attention should be given to the needs of vulnerable and disadvantaged consumers and those with low or non-existent literacy levels. This would not only endear trust on the part of the consumers, but also drive adoption on the part of eCommerce players”, he added.
On cross border eCommerce, the CEO noted five challenges, which he said the United Nations Council for Trade and development (UNCTAD) identified. These were: dealing with unfamiliar brands in an unfamiliar language, lack of certainty in receiving a product as described or ordered, hidden costs, including those related to customs duties and currency conversion, as well as shipping or delivery, conformity of products to local standards, and lack of clarity on protection afforded by a seller’s jurisdiction, redress available in the event of a dispute and enforcement of awards due to consumers.
He therefore recommended: “To effectively protect consumers within Nigeria, CPC and SON must be empowered with the authority to investigate, pursue, obtain-and where appropriate-share relevant information and evidence-particularly on matters relating to cross-border fraudulent and deceptive commercial practices. This authority must also encompass a working collaboration with foreign consumer protection enforcement agencies and other appropriate foreign counterparts”.
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