Nigeria's Ecommerce 2.0. When does it begin?

Nigeria’s Ecommerce 1.0 is done. Simply put. It ended with Nigeria’s economic recession.

The results are devastating. What else have they not experimented with? Oversized advertising to [Drone delivery] (http://pulse.ng/tech/black-friday-yudala-makes-first-ever-drone-delivery-in-nigeria-id4400147.html).

Nobody won!
If we were to plot the regression curve with the data of every ecommerce player, you’ll find out they all fit very close to the curve. The only datapoint that will really differentiate them is how much dollars they’ve raised. Konga’s shockingly abysmal active users statistics proves that no one has a solid lead. At this point, Konga and Jumia have an advantage because they’ve positioned themselves for potential future growth.

The recession will have casualties
Assuming that there’s no surge in oil prices in the immediate future, by the time Nigeria’s economic woes turn back around, a lot of today’s businesses would be dead. Killed not by solely by the recession but also by the scale of their business.

They had first movers advantage and they messed it up. It’s like playing a game of chess and you get to start with white pieces. They had white!

Nigeria’s Ecommerce 2.0. When does it begin?
The ones that make it through the recession will have new players to contend with. Keep in mind, the field is still very much open for play. For God’s sake, Facebook has 16 million active Nigerian users. That’s the market.

This post was first published on my medium page

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E-commerce 2.0 is going to be specialty online retail not the sell everything and lose a lot formula of Konga and Jumia. There will be more niche offerings that will price in the horrendous logistics of package delivery in Nigeria.

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E-commerce 2.0 will begin when POD is yanked off and a trusted Escrow/Refund system is in place. The cost of return logistics is killing. Unserious customers who place orders they are not willing to pay for are not helping matters.

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This is early Christmas! Anywhere I don’t see this happening anytime soon due to desperation by both big and small players

General merchants would still be the key players as scalability is a big issue for investment.

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Very interesting @Akinmail, infrastructure spend will change a lot with these folks. Improved spend on rail, revival of NIPOST or privatization etc. We are a buying nation.

Scalability requires scalable infrastructure which Nigeria does not have. I see a phone e-commerce site being profitable along with shoes, baby clothes and toys, kitchenware as categories.

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this is spot on

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The title makes me wonder whether there was a Nigerian Ecommerce bubble burst in the first place that left the pioneer players crashing to zero. Nevertheless, I’m still a proponent of a unique transformation of the e-commerce industry in Nigeria.

It begins when theres an Actual crash, the Companys Loss is due to Operations and Marketing, it was one Oga dat decided to get over 100 billboards round Nigeria and it was approved, Same oga that decided building 1 large warehouse makes sense than decentralized clearing houses that could offer faster pick up or lead times.

We havent even reach 1.0 yet, till they Restrategize and increase User Adoption, the industry is where it is, Stalling.

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This is very funny and ridiculous!

Innovation is about improving the customer experience and giving the customer what he/she wants! If the customer really wants to pay in cash then so be it! As a retail player it is for you to figure out how to make the experience better for the customer and that is the way to think and not just in terms of the logistical difficulty of returns.

I’m an Amazon Prime user… that means I can make a $10 purchase and return same a week later at ZERO cost to me because Amazon only wants me to make that purchase if I am SATISFIED! (same with Walmart and Lords & Taylor by the way)

That said, I’m going to call out two local e-commerce players now;

  1. drinks.ng; Bought two bottles of their VSOP cognac a few months ago and paid with a bank transfer. I suspected that the drinks were of dodgy quality after I had one and I complained to them by email. They promised to pick up the bottles and make a refund but never did in spite of my follow up. Anyway, I have sent one of the bottles to LVMH for testing.
  2. I bought a headset for about N2,000 sometime last year from Konga and paid online. It was advertised as an apple earpiece but it turned out to be a chinese knock-off. I wrote off the amount and trashed the earpiece because no strength to chop insult.

(On the plus side… had a seamless refund experience with Supermart.ng that left me surprised)

These kinds of attitudes will definitely not help in building the required thrust for these businesses to thrive.

So let’s face it… POD isn’t going anywhere. E-commerce players should focus on improving their customer experience (not their website)

Shikena…

Did you also read this?

Yes I did.

Escrow is just adding another layer to a simple transaction … advantage to customer because the Nigerian Consumer Protection Council doesn’t have teeth… meaning e-commerce platform selling shitty goods would still have to deal with the logistics of returns.

At the end of the day, I don’t think anyone is sitting in their homes and making orders they have no intention of taking deliveries of. Customers will still have the right to return defective products. POD actually forces e-commerce platforms to deliver real value to the customer… it is NOT the problem

Lastly, if you think that is the solution to POD (which I reiterate is not a problem) is an escrow service then by all means build one… I’m sure all the e-commerce players will be happy to pay you to use your service.

I’m done.

This is where you got it all wrong. I am an e-commerce Merchant. I have sold items on Konga, Jumia and Kaymu. The bulk of the returns are not due to defective products as you stated. I will give you some instances.
a. Customers order items just to test the e-commerce delivery system without the intention of paying for the items. They make comments like they no dey play with una again? I think sey they no go deliver am.

b. A customer places an order, when the delivery guy gets there, the same customer will tell him that the person that placed the order is not around. An attempt to dial the number on the way bill will give him out as the person that placed the order.

c. Customers either not picking their call or phone not reachable.

d. Customers order the same item from two merchants on the same e-commerce platform and receive/pay for the one that is delivered first. The second one automatically becomes a return.
e. Customers order the same item from eg Konga and Jumia and receive/pay for the one that is delivered first. The second one automatically becomes a return.

and many other funny reasons. That is why i said this [quote=“ojochidem, post:3, topic:8559”]
The cost of return logistics is killing. Unserious customers who place orders they are not willing to pay for are not helping matters.
[/quote]

An escrow system already exists as sellers that subscribe to return policies have their funds held back for certain days pending when the customer will make a case for return. That is why i said we need a TRUSTED system. If a seller knows that he will not receive money for selling defective items, he will stop selling them.

You spoke only from the consumer angle, you needed also to know the pains of the service providers.

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I wish I could award you 200 likes!

You truly have been a player in the e-commerce space and knows what goes on unlike most self proclaimed analysts.

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I would think these sort of ‘strategies’ are obtainable because the market is still fairly resistant to the very idea behind e-commerce. Companies are still fighting sentiments…

@ojochidem Do you think that if websites processed credit cards before delivery it would cut down on most of the unserious customers?

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I’d like to think it’s a no-brainer.

If I’ll take my money and have it put in an escrow account, only to rely on me having to justify the reason for the return as a basis to getting my refund, them I’m probably not testing their delivery system.

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Yes, to a large extent.