Nigerian ecommerce has local twist

16 May 2013

LAGOS: The Nigerian middle class is taking to the internet to purchase brands like Samsung, Ralph Lauren and Zara from Amazon-style websites, which have had to adapt their business models to local conditions.

"It's not so much there's this appetite for online shopping, as that there's an appetite for shopping," said Sim Shagaya, who set up Konga.com less than a year ago.

"Retail here is still mostly informal, fragmented and inefficient," he explained to the Financial Times. "People want convenience, which gives us the opportunity to leapfrog with e-commerce."

Growing internet penetration – up from 6.8% in 2007 to 28.4% in 2011 according to the International Telecommunications Union – is helping fuel an e-commerce boom but one that has a particularly home-grown flavour.

"We have captured a lot of early adopters, but there's a much larger market out there that still needs to be educated about buying online," said Tunde Kehinde, joint managing director of Jumia Nigeria, a rival to Konga.com.

The way Jumia goes about this is to equip a sales team with tablets and send them out to businesses, churches and homes to show potential customers what they can buy. This includes a range of brands that the company has struck agreements with, such as LG, Samsung, BlackBerry, Nokia, Ralph Lauren and Zara.

As well as mobile phones and clothing, these sites typically sell household goods, books, DVDs, toys and cosmetics.

Other Nigerian twists include cash-on-delivery, since online payment is rare as many people do not have bank cards and are, in any case, concerned about fraud. Ecommerce sites have also had to build their own delivery fleets because the postal service is unreliable.

While Konga and Jumia stock a large range of items, specialist sites are looking to corner particular markets.

Olumide Olusanya set up Buycommonthings, an online grocery store that delivers the same day to customers in Lagos, the Nigerian capital.

"Everything has come together at the right time for e-commerce here," he said. "We are still paddling ahead of the wave, but when it comes it is going to be huge."

Data sourced from Financial Times; additional content by Warc staff