Despite the growing appeal of
e-commerce, available data shows that the shopping behavior of majority of
Nigerians is still largely traditional – with many preferring to see, touch or
experience the product in action before making the buying decision.
In this piece, Yudala – Nigeria’s
leading online and offline retail chain – dissects the e-commerce revolution
and why most Nigerians remain slow in changing their traditional shopping
habits.
E-commerce has become a thriving
global industry. A recent report released by the Oxford Business Group revealed
that retail sales hit a whopping $22b figure globally in 2016, with online
shopping figures accounting for a major part of this outlay. In advanced climes
where access to the internet and of course, literacy levels stand at
appreciable levels, e-commerce has become a lifestyle for many. Interestingly,
global retail sales, of which e-commerce makes up a major part, is projected to
rise further to an estimated 27 trillion dollars by 2020.
Nigeria has also been bitten by
the e-commerce bug. This has been made possible by the proliferation of online
stores all competing for the attention of shoppers, many of whom are eager to
jump on the ease and convenience of the e-commerce train.
Nevertheless, e-commerce is still
at the rudimentary stage in Nigeria as the pace of adoption and acceptance is
decidedly slow. Despite the huge strides recorded in the Nigerian e-commerce
landscape – especially with the massive awareness for globally celebrated
shopping festivals such as Black Friday and Cyber Monday, among others – the
average Nigerian is still an unrepentant traditional shopper.
In spite of the massive hype and
growing status of e-commerce in Nigeria, you are better off convincing the
average Nigerian to make the final buying decision when you can provide him or
her with an opportunity to ‘experience’ the product before parting with
hard-earned money. This often involves visiting a physical or brick-and-mortar store
location to interact with sales attendants and getting a chance to see a
demonstration of the item before the sale is closed.
This traditional shopping
behavior goes a long way to justify the unique Yudala model of combining an
online store with physical offline stores located nationwide. Cases abound of
most walk-in customers actually admitting to having checked out a particular
product online but still preferred to physically visit the store to see the
product before purchase.
A few factors are responsible for
this largely traditional approach to the e-commerce revolution in Nigeria:
Trust
remains a major issue: Many Nigerians live in constant dread of online
fraud and will do anything to avoid using their debit card to process payments
electronically. According to data from the Nigerian Inter-Bank Settlement
System (NIBSS) the year 2014 saw 1,461 reported cases of electronic or e-fraud,
with actual losses grossing N6.216 billion. In 2015, about 946 attempted
e-fraud cases were also recorded by banks, Other Financial Institutions (OFIs)
and Mobile Payment Operators (MPOs), resulting in an estimated loss of N5
billion. Recently, the Hon. Minister of Communications, Barr. Adebayo Shittu
indicated that about N78 billion is lost yearly in Nigeria to all forms of
cybercriminal activities. This reality has stunted the growth of e-commerce in
Nigeria.
Internet
access is elusive for many: It is an open secret that e-commerce is
driven by access to the internet. However, internet access for many in this part
of the world is an expensive venture. Worse still, the number of internet users
seems to be declining. Going by the most recent statistics released by the
Nigerian Communications Commission (NCC), the number of internet subscribers in
Nigeria’s telecommunications networks declined to 91, 274,446 in January 2017.
According to the figures released, internet users dropped to 91,274,446 in
January as against 91,880.032 users recorded in December 2016, showing a
decline of 605,586. This is one of the major reasons why the average shopper
remains seemingly stuck in his largely traditional shopping ways.
Unsavoury
experiences from delivered orders: The e-commerce experience in
Nigeria has been stalled by the action of some online retailers who end up
disappointing the customer with the delivery of items different or inferior in
quality from the one seen or ordered online. In such a case, the customer has
to bear the inconvenience of having to either navigate the thorny process of
seeking a refund or waiting an extra lengthy number of days to get the right
item. This is why ensuring that “What you see is what you get” remains a unique
selling point in the e-commerce market.
Millions
remain underserved or unreached in the hinterlands: A recent
report revealed that the Nigerian e-commerce industry recorded a handsome $1.9b
figure in 2016 and the figure is expected to reach an estimated $3.9b in 2020.
However, e-commerce in Nigeria remains a predominantly urban phenomenon. For
many in the hinterlands and rural communities hobbled by the absence of the
most basic infrastructure, e-commerce will remain an abstract concept for a
long time. To reach these ones, citing a physical store not too far from their
location remains the best bet.
Seeing
and touching sells quicker than just seeing: Ever wondered why many
shoppers with access to the internet still end up carrying out most of their
e-commerce purchases in physical stores? For many Nigerians, seeing and being
able to touch the item beats just being able to see it on the screen of a
mobile phone or laptop. Majority still want to see, touch, feel and/or
experience a product before they part with their money.
Nothing
can replace the plain old physical contact: Commerce in Nigeria
originated from a traditional stand-point. Nothing feels better than haggling
with a seller face-to-face and eventually securing a bargain. The glint in the
eyes of the buyer and renewed spring in the steps are a sight to behold. For
now, at least, e-commerce will struggle to completely wipe away this
culturally-ingrained shopping behavior.
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