July 22, 2024

eCommerce, the Nigerian Digital Economy

2 min read

Technology advancements had continued to enhance the standard and process of business operations across the globe. From its telling impact on global communications, to manufacturing and transportation, technology provides a springboard for enterprises to flourish and efficiently accomplish their business initiatives on a daily basis. Today, every nation looks to explore the loads of possibilities in the digital economy driven by technology. 

Nigeria is not an exception to this. The federal government is pushing for Nigeria to key into opportunities in the digital space to grow the economy. Policies have been formulated, with a digital masterplan to guide the process of attaining the set goals. There has also been a machinery in motion to sensitize the people on the opportunities open to them in the digital economy space. 

While several social and economic investments combine to make up the digital economy, e-commerce and its chain of business activities has so far been the major driver of Nigeria’s digital economy. Thousands of sellers are connected to millions of consumers through the likes of Jumia, Konga and Jiji. Hundreds of Thousands of informal retailers are stocking directly from manufacturers through platforms like Alerzo and TradeDepot. 

The Federal government recently said the current e-commerce spending in Nigeria has grown to  $13billion per annum and is expected to hit $75billion in revenue per annum by 2025. It also said e-commerce grew in Nigeria from 14% in 2019 to 17% in 2020. 

The Director General of the National Information Technology Development Agency (NITDA), Kashifu Adbullahi also touched on the impact of e-commerce on everyday life and its crucial space in the digital economy. “The most profound impact for me is how it makes life more convenient and less disturbing. When covid came, we were disrupted and the only way to keep going was these online services. E-commerce is critical to any online services or digital economy because when you consume a service, you need to make a payment and you can only do that through e-commerce,” he said.

The place of e-commerce in the Nigerian economy is being boosted by gradual transition of informal retailers into the online shopping community. Informal retailers have been an integral part of the Nigerian economy since inception. Majority of the nation’s SMEs operate in this space. “The informal sector is classified into micro, small and medium enterprises (MSMEs). The sector makes up 50% of the nation’s gross domestic product (GDP), making it the major source of economic growth, productivity, and competitiveness. Moreover, 90% of Nigeria’s retail market transactions happen in the informal channels, and the Food & Consumer Goods retail market is worth (estimated) over $40billion,” said Adewale Opaleye, Chief Executive Officer of Alerzo Limited. 

Commendably, e-commerce in Nigeria is attracting interest from investors pumping millions to set up technology needed to drive the sector. Given its growing importance and acceptance, getting more Nigerian Customers sellers and informal retailers onboard e-commerce will no doubt be key to Nigeria’s digital economy success. 

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