Business & Investment

eCommerce in Nigeria; Meaning, Key Players, Problems and Prospects

eCommerce in Nigeria; Meaning, Key Players, Problems and Prospects

Much has changed in recent times as the advancement in technology has revolutionized the means of communication as well as the access to information from virtually anywhere and at any time.

It is plausible to say that the Internet has been able to put a lot of things in place ranging from quick access to information, online business transactions, online schooling, online shopping, online banking and much more.

The way business is being conducted today has changed compared to the time past where all business was undertaken face -to-face.

Read Also: 9 steps to start eCommerce business in Nigeria

eCommerce in Nigeria; Meaning, Key Players, Problems and Prospects
eCommerce in Nigeria – Photo Source: https://www.freebrowsinglink.com

Now, most business activities are conducted online and this is where e-commerce comes to play. It is very important to know the meaning of e-commerce as it is practically the key subject of this article.

E-commerce can be defined as the use of electronic telecommunication technology to conduct business transactions over the Internet.

It allows goods to be exchanged anytime, 24 hours a day, seven days a week, anywhere the buyer has access to the Internet. It expands the market of every seller and in many cases, the market becomes global.

In most developed countries, e-commerce has proven to be a vibrant source of economic growth as well as in developing countries.

The emergence of e-commerce has positively changed the traditional method of shopping as physical presence is no longer a necessity before goods can be purchased or payment made.

Read Also: 15 Problems of E-Commerce in Nigeria and Possible Solution

E-commerce is the environment in which an increasing proportion of business is now conducted. It involves the transmission of confidential, sensitive and valued information and to operate in this environment effectively, not only customers but also business partners must be convinced.

E- commerce also involves the dissemination of pre- purchase information and post-sales services and support as it is not only limited to the purchase of a product.

The advantages derived from engaging in e-commerce transactions by the e-commerce sites include reduction of transaction and operational cost, maximizing efficiency and convenience of receiving payment online.

The e-commerce market in Nigeria is gradually growing and in years to come, it will drastically improve the economy of the country.

The beauty about e-commerce is that it provides customers the ability to bank, invest, purchase, distribute, communicate, explore and research from virtually anywhere as long as there is an Internet connection.

It has been reported that Africa is the fastest growing e -commerce market in the world with a 25.8% increase rate compared with the rest of the world 16.8% growth rate.

The number of Internet users has greatly increased has over 70% of the Nigeria population are familiar with the Internet especially the youths.

I recently came across an article published by Punch stating the downturn of the e-commerce market in Nigeria as more online stores have closed due to the recession, poor purchasing power and logistics problems and this problem put Nigeria in that struggling path to keep up with other developing and developed countries in terms of e-commerce.

The Internet is indeed a viable medium in which e-commerce can help boost the Nigeria economy as more users can tap from the opportunities available and utilize it to the country’s benefit.

Many Nigerians are still wary of online transactions because of cybercrimes and still prefer the traditional ways of making payment and this is kind of one of the setbacks of e-commerce in Nigeria.

For e-commerce to thrive in Nigeria, there must be consumer security when it comes to vital information requested of the consumer and also there must be a viable means of delivering the items purchased to the consumers without any problems or delays.

Read Also: E-Commerce Is Changing the Way Cars Are Being Bought and Sold in Nigeria

It would interest you to know that with e-commerce in full gear, physical possession of goods like books and CDs is not really necessary as it can be sold in electronic files downloaded off the Internet directly into the customer’s PC.

For e-commerce to fully evolve in Nigeria, there is an urgent need for more legislative action which would provide a more secure and robust platform for e-commerce in Nigeria like in other developed countries.

There is two principal e-commerce model which includes; Business-to-business (B2B) (Businesses purchase from other businesses) and Business-to-consumer(B2C) (Businesses sold to consumers).

There are also four major stages involved in e-commerce transaction which include; consumer search stage, the ordering stage by the consumer, the online payment stage and the delivery stage.

The buyers and the sellers are the key players in the e- commerce market. For any business transaction to take place, there have to be two parties involved and in this case, it is the seller represented by an online website and the potential buyer who by the means of Internet arrives at a successful transaction.

As much as e-commerce has a promising prospect for the Nigeria economy it is not without problems and this article is aimed at addressing the problems and prospects associated with e-commerce.

Problems of E-commerce in Nigeria

The major challenges associated with e-commerce in Nigeria are:

1. Cybercrimes

The increasing rate of fraudulent activities online has made Internet users, consumers and business men and women more conscious of business dealings online as they are more wary of falling victims to such fraudulent practice and this is one of the major challenges of e- commerce in Nigeria.

On online stores when an item to be purchased is selected, personal information is required of the consumer and also payment details which can be a dangerous tool in the hands of fraudsters who uses such information to defraud the consumer.

This has raised serious concern and that is why people still prefer the traditional method of making transactions even if it is more stressful than online transactions.

2. Poor infrastructure

This is another problem why there is a downturn in the e-commerce market in Nigeria as there is no suitable infrastructure where the operation of the e-commerce market can thrive.

Read Also: Top Ten e-Commerce Sites In Nigeria

3. Unreliable distribution and delivery process

Complaints have been made on how goods ordered online don’t get to its destination or how the wrong goods are being delivered contrary to what was initially purchased and this has made people shy away from online shopping thereby resulting to the slow embrace of e-commerce in Nigeria.

4. The high cost of shipping goods

The e-commerce market is wide as it extends to other countries and products shopped online which is outside the shores of the country needs to be delivered through shipping and due to the fluctuation in naira this can be an issue as the cost of shipping would be high and also the duration of time the goods reaches its destination need to be taken into cognizance.

5. Low penetration of credit cards

Prospects of E-commerce in Nigeria

There is a high possibility that e-commerce would thrive in Nigeria as the government has taken necessary measures to ensure that cybercrimes are reduced drastically and offenders are brought a book.

Legislative efforts have also been put in place by the government to ensure that telecommunications companies operate easily by providing interconnectivity required by e-commerce to function effectively.

Payment options adopted for online transactions are now properly secured to prevent fraud.

The delivery process if properly looked into will give consumers much confidence in shopping online as they are sure to receive their goods on time and without any hassle.

Read Also: 10 Advantages and Disadvantages of Science and Technology in Nigeria

Conclusion

E-commerce is a positive change to how business is now conducted as it can be a great source of economic development in Nigeria if the problems are solved and also provide employment opportunities for youths.

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Cynthia Victor

Cynthia Victor is a Content Developer at InfoGuideNIgeria.com. InfoGuide Nigeria is a team of Resource Persons and Consultants led by Ifiokobong Ibanga. Page maintained by Ifiokobong Ibanga. If you need a personal assistance on this topic, kindly contact us.

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