The expansion of e-commerce in Nigeria is being driven by significant advancements in telecommunications services. And one aspect of e-commerce that has been effective in Nigeria is e-banking. Internet usage increased by 73% between the years 2000 and 2019, although at an erratic rate.
E-commerce expands on traditional commerce by incorporating the speed and flexibility provided by electronic media, enabling improvements in operations that result in significant cost reductions as well as enhanced efficiency and competitiveness through the redesign of conventional business techniques.
The globe is starting to appreciate doing everything from the comfort these technologies present, thanks to the comfort our mobile phones and devices present. E-commerce is a sizable industry that is expanding globally at an unheard-of rate. People of all ages, including children, millennials, and senior citizens, like shopping at various e-stores. Compared to actual establishments, purchasing online brings about greater enjoyment.
E-commerce has boosted businesses’ productivity over time by streamlining the order-to-delivery procedure. Additionally, it has contributed to time savings, revenue growth, and enhanced customer service.
What is e-commerce as it pertains to Nigeria?
E-commerce is the practice of marketing, identifying, paying for, and delivering products and services online. By enabling consumers to conduct banking transactions, buy, sell, distribute, communicate, explore, and research information about various products from virtually anywhere and at any time where there is Internet access, e-commerce technology has revolutionized the system of business transactions. Most significantly, it has produced electronic markets and given firms a chance to connect with customers directly at several levels.
It was noted that Nigeria’s financial system now includes an electronic payment system, which has decreased the amount of physical cash moving through the economy. Additionally, a significant number of electronic-based transactions have been encouraged, primarily as a result of globalization’s effects.
Importance of e-commerce in Nigeria
1. Always Available
On e-commerce websites, there is no time restriction, in contrast to a physical store, which does have closing and opening hours. Since it is open around the clock, clients can easily shop there without having to worry about anything. You shop when it’s convenient for you.
2. Reduced operating costs
The decreased cost of e-commerce is one of its most obvious advantages. With eCommerce, you can avoid many of the significant, up-front costs that traditional retail can involve, such as a physical storefront, inventory, or payroll, while you’re just getting started. You can gradually expand your business with an online store as your sales increase.
Young businesspeople with less cash should take advantage of this excellent opportunity because administration and maintenance costs are quite modest.
3. Distance is not a barrier
Without a doubt, brick-and-mortar establishments are restricted by geography and depending on your goods or services, this may be essential to your financial success.
Since its market is not constrained by geography, an online store will have a comparatively larger one.
There is no reason you shouldn’t consider moving your business online if you want to increase your reach when you compare the number of people you can reach through a website to the number of people you can reach through a high street store or local advertising.
4. Expand your niche with ease
Many factors are taken into account when a merchant wishes to launch a new product. However, things are completely different when you have an online store because you can constantly and simply extend your selection and be highly adaptable.
You may simply offer new products and increase your market because you are not dealing with a small group of individuals in one specific region but rather with the entire planet.
5. Transparent business operations
E-commerce features like POS (point of Scale) machines, bank account information, credit and debit alerts in internet banking, and the checks and balances e-commerce affords make business systems transparent in developing nations like Nigeria, where there is a high tendency for shady deals and fraudulent activities.
In Nigeria, eCommerce also enables the government to identify accounts with questionable activity and locate the owners for EFCC investigation.
6. Saves time
E-commerce transactions happen quickly and almost instantly. Consider how long it would have taken someone to complete a bank transaction before the invention of e-banking, which now allows for such transactions to be completed in a matter of seconds with mobile applications. Gridlock is a common occurrence in Nigerian cities like Lagos, Abuja, and Port Harcourt. Savings include both the time that would have been spent traveling and the cost of maintaining mobility.
7. Comfort and simplicity
Many enterprises in Nigeria can now be operated from the convenience of your home thanks to e-commerce. You don’t need to go to the markets, where you risk having your phone stolen while navigating a throng of customers and vendors in order to purchase a gorgeous garment for your birthday. The majority of e-commerce software is relatively simple to use and understand.
8. Decrease in labor and inventory management costs
E-commerce in Nigeria lowers the expense of maintaining records and facilitates auditing. It is possible to utilize the program to keep track of all purchases made and goods sold, which greatly simplifies inventory management for Nigerian supermarket operators and lowers the expense of hiring additional staff.
9. Contact prospective clients
The capacity to reach customers worldwide is made possible by the availability of your products online. You can conduct international business here.
Results from a possible customer’s “search engines” for a product, where you sell the goods in question, may make your online store accessible to clients you make no attempt to attract.
10. Easily track customer behavior
Numerous factors can affect how customers’ tastes and fashions vary, so as a business owner, it is your obligation to adapt to the market as consumer tastes change.
This could be more difficult and error-prone in a physical market, but it is simpler and more attainable with e-commerce.
The offer is tailored to meet customers’ needs by keeping an eye on their purchasing patterns and areas of interest. You may enhance your ongoing interaction with them and create enduring relationships by consistently meeting their requirements.
11. The reduction in the danger of carrying raw cash
The risk you face when carrying cash is reduced by the cashless transactions made possible by the use of debit cards.
Businessmen who had to travel to Aba, Onitsha, and Lagos to buy wholesale products in the past were robbed of their cash and items when they were apprehended by bandits.
Money transfers are now feasible thanks to e-commerce, which prevents situations when losses like this occur.
12. E-commerce enables discounts and offers
During holiday occasions like Eid-Kabir discounts, Christmas and Easter discounts on clothing, shoes, jewelry, cosmetics, and food products, many businesses hold promotions, bonanzas, and giveaways.
Black Fridays are an exciting shopping event that is quite popular. Typically, one or more Fridays in November of each year are designated as Black Fridays.
This is something that many online stores like Jumia and Konga do, offering incredibly alluring discounts on devices, electronics, clothing, and much more.
13. Promotional possibilities
E-commerce expands marketing options, and small firms require this to expand. Only the prominence of the search button can boost the odds of scaling up and reaching a larger audience in Nigeria, where business owners, entrepreneurs, and small business owners predominate.
E-commerce not only cuts down on advertising expenses, but it also removes geographical restrictions on customers and physical barriers in marketplaces.
Additionally, because customers may make purchases at any time thanks to e-commerce, Nigerian business owners may be able to make money even on holidays.
Forms of e-commerce relevant to Nigeria
Dropshipping is the practice of a company or individual “selling” on their website goods that they don’t actually produce or own. The owner(s) of the dropshipping website never touch anything; instead, they simply take a small cut from the person or company who produces and sells it. The products are packaged and shipped by the third-party company.
2. Manufacturing and private labeling
Any company or person that engages in private labeling and manufacturing is essentially just handling all of the presale steps internally. In other words, they manufacture, package, and then sell the products directly to the consumers.
3. White labels
Products purchased from a manufacturer are rebranded (or “labeled”) by businesses operating on a white-labeling business revenue model and then sold as the companies’ own goods.
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