Perspectives for growth and sustainability of eCommerce operations
Today, with the very strong impact of globalisation, digitalisation and social media, the engagement with e-commerce across the world keeps changing. Many companies and advertising players are forced to implement new consumer and business models and apply innovative business strategies. Social media marketing has become a norm for most companies with significant use of social media sites like Twitter, Instagram, Facebook and YouTube.
Since its diffusion, online communication has become one of the most commonly used methods of communication for people of all ages, genders, nationalities. Currently, major companies rely very often on the power and effect that the new media have on their brands and proactively try to use these tools in order to create a positive image of their businesses. Thus, it is natural to think that marketers should seek to attract fans and create awareness of their brands through these platforms.
By utilizing the social aspect of the web, online marketing is able to connect and interact on a much more personalized and dynamic level all in the name of e-commerce.
E-Commerce, also known as e-Business, or electronic business, is simply the sale and purchase of services and goods over an electronic medium, like the Internet. It also involves electronically transferring data and funds between two or more parties. Simply put, it is online shopping, as it is commonly known.
Consequently, brands across the world have invested billions of dollars into this venture to ensure they connect with their target audiences on different locations. By monitoring the market trend, many brands have gone ahead to design what they refer to as “market specific” advert messages, with very critical attention paid to media selection, simply to ensure that they do not miss their potential consumers.
This aspect of advertising trail through e-commerce is creating new directions for the future of e-commerce in Nigeria. E-commerce companies are now actively developing strategies to explore this model while discerning advertisers who are planning to reach more of their target audience are plugging in to take advantage of the opportunities.
The reasons for these moves may be connected to recent reports on the digital economy in Nigeria. According to reports on export.gov, Nigeria’s economy is gradually becoming cashless. At present, the adoption of electronic transactions are continuously increasing, with ATM transactions dominating the volume of electronic transactions and the Nigerian Inter-Bank Settlement System Instant Payment dominating in value. The cashless policy has resulted in increasing demand for ATM services deployed in major cities and commercial centers across Nigeria to facilitate electronic banking and financial services.
The report further stated that the successful adoption of electronic payments in Nigeria is encouraging the entrance of payment service providers such as Visa and MasterCard, which see Nigeria as a promising market. Debit cards from many local banks such as Citibank, Zenith, UBA, and Fidelity, are now used by Nigerian travelers to make payment in countries such as the United Kingdom, Germany, South Africa, and the United States. Online wallet services like PayPal are available to residents of Nigeria and all transactions are currently denominated in the USD.
In addition, the demand for electronic transactions has attracted payment facilitators from Europe and Asia who are investing in Nigerian electronic infrastructure projects. Fast growing youth populations, expanding consumer power, and increased smartphone penetration, strengthen online commerce and financial technology in Nigeria. The current e-Commerce spending in Nigeria is estimated at $12 billion, and is projected to reach $75 billion in revenues per annum by 2025.
“The future of e-commerce in Nigeria is still very bright despite the challenges recently noticed in the industry. It is sad that companies like OLX, DealDey, Efiritin and few others shutdown their businesses in Nigeria claiming non-profitability. I know that few others are also struggling but I believe that should not spell doom for the industry in Nigeria if the industry players make deliberate effort to develop it, ” said Tade Adelegan, an ICT expert.
In recent times, according to streettolz, more than 32.88 per cent of the Nigerian population already has access to the internet and the rate of mobile phone usage increased to 87 million representing an attractive market for mobile commerce. Nigeria’s e-commerce market was recently valued at N225 billion or $1.3 billion due to the 25 per cent in e-commerce growth.
“These are impressive statistics that should not be overlooked. As a strategy for survival, diversification could be the way to go. E-commerce owners must be deliberate and put into adequate use the data they have on consumer behaviour to invent other services that would continuously grow their clientele. Such services could be new or be an expansion of the existing ones,” Adelegan advised.
One company that is already looking in this direction is Jumia. The company recently announced its decision to open its platform to more advertisers who wants to link up with their audiences.
“Our platform is one of the most visited in Nigeria and Africa. We are in 12 countries of Africa, and in each country, we serve consumers everywhere. We are much more than “e-commerce”, we have hotels, flights, restaurants, classifieds portals, and many more platforms, which give us even more data and more ability to target the right audience for brands looking to reach a wider and more targeted audience”, said Head of Growth and Partnerships, Olusegun Martins.
Martins added, “we decided to open our platform starting from last month (October). There is a huge opportunity for brands to showcase their services and products to our audience and that is why we opened our platform. The way we want the brands to look at it is to think of Jumia as a search. Every day, more users access Jumia and use it as a source of research, inspiration and shopping.
“No other platform is growing faster. Jumia is adapting the model of leading e-commerce platform in the US, Amazon. Over the last seven years, Jumia had remained one of the top 10 most visible websites in Nigeria, adding that the clamour by customers for an advertising platform from Jumia was on the increase, hence the decision by the company to give it a trial this year.”
In view of the dynamics of modern day advertising, advertisers are now demanding accountability. They are demanding for metrics to measure the effectiveness of their messages either in specifics or generally. For the advertisers, the return-on-investment (ROI) is critical to their understanding of a successful advertising campaign. With the advent of the social media, brands are now compelled to be highly creative in how they design their advert messages to suit the taste of young users of social media.
According to the Social Media Marketing Industry Statistics, social media use is set to change the way in which many marketers conduct their businesses. One of the reasons is that consumers’ ratings of brands on social media platforms have become one of the most credible forms of advertising.
“In Nigeria, we are now sounding like the proverbial broken record-asking for what we would have legitimately have. The challenge with electricity persist, the cost of data remains high compared to that of countries in the same space. The issue of trust is also roving around the success of the e-commerce industry. These challenges must be addressed with deliberate polices by the government to ensure ease of business, while organisations should be creative in providing solutions” said Tega Ebitimi, an IT Consultant.
Interestingly, that the statistics still favour the existence of e-commerce and to a larger scale digital economy in Nigeria provide glimmers of hope for the multi-billion dollar industry. However, how well players in the industry demonstrate willingness to grow would determine its eventual survival.
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