E-commerce is a global phenomenon that is reshaping economies and redefining development metrics. To an average Nigerian, e-commerce connotes shopping online and getting your orders delivered. But in a real sense, a lot more investment and business activities make up the e-commerce space, and e-commerce has far more impact in today’s economy than many people imagine. Discussed in this article are some of the impacts and contributions of e-commerce to overall economic development.
Boosting local businesses: The e-commerce wave enables hundreds of SMEs across Nigeria to run profitable and sustainable businesses, benefiting from the economics of digitization to achieve a significant increase in their activity level. For instance, B2B platforms like Alerzo, TradeDepot and others are transforming the informal retail market with services targeted at improving businesses of rural sellers. With e-commerce, prospective entrepreneurs don’t have to think about huge capital to actualise their dreams. Also, existing businesses are leveraging online platforms for more reach and ultimately business growth.
Economic development: Since the covid-19 took the world by storm, conversation has since increased on the impact of e-commerce and the immense economic potential it possesses. For instance, the Nigerian government has woken up to the economic contribution of e-commerce and its potential to overall economic development of the country. The current e-Commerce spending in Nigeria is estimated at $12 billion, and is projected to reach $75 billion in revenue per annum by 2025.
Shaping Nigeria’s economic narrative: By and large, e-commerce has contributed to shaping the Nigeria narrative by showcasing the attractive investment opportunities to the world. Also, it has helped project Nigeria’s talents and cultural elements across the globe. The biggest beneficiary of this has been the fashion industry. Several fashion brands have blossomed thanks to online shopping platforms, while several brands are reaching and making sales to global audiences.
Prompting ingenuity: E-commerce contributes to the economic development in Nigeria by allowing many entrepreneurs embark on new innovative projects. The availability of online markets is prompting and actualising innovative business ideas across Nigeria. Today, many are able to launch businesses with little capital, as virtual markets save them the cost of rents for physical shops or stores.
Connecting rural areas: The ability of e-commerce to penetrate the rural locations and communities in Nigeria is also noteworthy. Deploying different innovative measures, e-commerce brands encourage and promote digital economy in rural communities by extending catalogue of product and logistics services to residents.
Job creation: Despite being a virtual platform, e-commerce is a chain of activities that creates rooms for employment. From processing of orders to packaging and final delivery, humans work behind the scenes to ensure customers’ demands are met. E-commerce platforms in Nigeria employ hundreds of thousands directly and indirectly. If well explored, experts have projected that the e-commerce sector is capable of creating about 23 million jobs in the country.
Driving financial inclusion: Lastly, another huge impact of online shopping platforms is how they facilitate financial inclusion through digital payment solutions. With payments apps of e-commerce platforms, several Nigerians previously excluded in the conventional banking system are being serviced digitally. And this is going a long way in expanding the financial ecosystem.