E-commerce is an integral part of the global digital economy. While advanced economies of the world are vastly exploring other aspects of the digital economy, e-commerce remains the major driver in third world markets. The Nigerian narrative has largely been of the latter. E-commerce has been a huge lever for Nigeria’s digital economy with online shopping platforms leading the charge by thrilling consumers. Presently, e-commerce accounts for a huge share of transactions in Nigeria’s digital space.
Notably, digital commerce activities have drawn attention to the possibilities of a robust digital economy. Recently, the European Union, under its Gateway Initiative disclosed plans to invest £820 million in the Nigerian digital economy sector over the next three years. “Nigeria has immense potential for digitalisation and with a combination of 160 million Euros in grants and 660 million Euros in loans, the EU aims to comprehensively support Nigeria’s digitalisation strategy,” said The Executive Vice President of the EU, Margre Vestager.
While B2C models have shown the way, some B2B platforms are reshaping the informal retail sector. Top among them are Alerzo, TradeDepot, Market Force and Omnibiz. According to tech enthusiast Samuel Elegba, the transition of the informal retail market will not only help address challenges in the sector, but could be the push that takes Nigeria’s digital economy to the next level. “Come to think of it, the informal retail sector is estimated at $100 billion. Majority of these transactions are done in cash! For years, we were advocating cashless policy, yet not much was done to bring this sector into the digital space.
“This appears to be a gold mine that has been neglected so far. Imagine converting 20% of that market into the digital economy. Yes, the challenges there are much: the market is fraught with loads of hiccups: unauthorised marketer peddling adulterated products, lack of access to funds, mass literacy among retailers, clustered market, and logistics are just few of the lot.
“But the motivation should be the end benefit. And with the increasing number of investors pumping money into this digital market, the gap will gradually shrink. When the likes of Jumia started, there were reservations that it can’t work. But see what we have today. If you look at the business models of some of these brands, their operations will solve challenges in the sector. This could just be the needed push for our digital economy boom.”
Industry observers are also of the view that with technology connecting manufacturers, distributors and retailers, B2B online platforms will go a long way in curbing the menace of adulterated products in circulation. This will also lead to massive improvement in volume of online payments and financial inclusion. With the help of these digital solutions, retailers can build transaction history which will boost their chances of accessing loans.