I first made this comment on radar about the harm online marketplaces in Nigeria are having on eCommerce a few months ago…
With Konga recently announcing the continuation of their restructuring initiative to pivot to the marketplace model, I think it’s important to have the conversation of the impact these marketplaces are having on eCommerce.
Here is my opinion piece on Why Online Marketplaces are not helping eCommerce grow in Nigeria.
Thoughts and opinions?
Hey @OyihomaS, really nice article however I have to say that I ‘half agree’ with the premise of your article. Yes, the biggest advantage of using these platforms is that these small merchants do not have to throw a lot of money behind building out their own websites, online shops and also dabble in online marketing as all of these endeavors will/could erode whatever slim profit margins they are already getting.
However, I somewhat disagree with the premise that the solution is for these merchants is for them to own/manage their e-commerce stores especially due to the points I mentioned above. I’m sure you know of a lot of friends/merchants who have sent you links to their ‘stores’ to buy clothes/shoes/bags/products and these sites no longer exist simply because they didn’t need them in the first place and no one was actually ordering from the sites. There are literally thousands of ‘dead’ stores from merchants who decided to create their own stores just because they thought it was required to succeed and now have nothing to show for it except a parked domain name.
Unless a merchant is specializing in high volume goods and are consistently making high volume sales, owning an online store could just become an additional cost and burden to the business and even in that scenario, I would still caution these merchants to be absolutely sure they have the resources to continually support it before embarking on this as any failure on their system could cause serious harm to their businesses. As I eluded to above, marketplaces like Konga and Jumia etc. have proven that they can handle massive scale and also have millions of Naira and engineers dedicated to making sure that the buying and selling process is as seamless as possible and that is their USP.
I personally believe that a mix of online and offline advertising is what these merchants need to succeed. It would be wrong to assume that just because your goods are listed on jumia or konga, that is the end of your marketing. It is still up to the merchant to continually point people to their stores via word of mouth, whatsapp, facebook, goodwill, personal network etc. Let the small/medium merchants handle their marketing and let Jumia and Konga etc. handle transactions.
As these marketplace operators continue to scale their operations by adding more sellers to their platform competition for sales amongst merchants will intensify resulting in having to frequently adjust prices in an effort to stay competitive.
Just a sidebar, I believe that the ultimate reason for the increased competition on these platforms is lack of exclusivity. If you’re selling the same products and/or brands that 50 other merchants are selling, you will ultimately have to continually adjust prices to stay competitive or get priced out. Creating your own online store to sell the same products/brands totally takes you out of the game if majority of your potential customers are already on these marketplaces looking for the lowest possible prices.
Sorry, if this comes out as ranting. Blame it on coffee 
Hey @OyihomaS there are a couple of assumptions implied in your post, but the following 3 are particularly strange;
• That listing on online marketplace is a restrictive contract which merchants are legally obliged to follow i.e if they list on Konga/Jumia, something stops them from owning their own online store. I don’t see any evidence of this, do you? For instance look at Amazon/AliBaba marketplace (which Jumia/Konga model themselves after), a lot of merchants there have their own thriving online presence and yet make brisk sales on the platform.
Yet, you said merchants are ‘choosing to exclusively sell their products through online marketplaces’. Is this a fact or just an opinion?
• That merchants who start from online marketplaces would have somehow eventually found the web. Arguably, the most important benefit the advent of online marketplaces gave to Nigeria, is that they brought people to the web. And provided the infrastructure as well. Did you discount that angle?
Just so you know, most merchants on online marketplaces have little in common with the examples you listed - Ruff and Tumble, Shoprite and Slot. I’m sure there are good examples out there which makes your point better, just strange to me you didn’t include (or find them).
• According to you, scaling and growing an actual brand in Nigeria should be of greater importance in a merchant’s hierarchy of long term needs. I kind of agree with this. However, I think where your post missed the tracks was extrapolating this simple opinion, to mean revenue today should take a back seat.
In any case, I would have thought merchants finding more customers (in this case, online), so they can sell more and make money is their #1 priority (which is what led them to online marketplaces in the first place). In this scenario, they can then go on to be successful enough to scale and build their own brand. It seems to me that you got this step completely backwards. Did you notice that too late?
I’m genuinely interested in the thought process you took to reach your conclusions. You might even be right, but I don’t even see how online stores and marketplace are mutually exclusive events.
Hi @jogunjobi, thanks for sharing your thoughts.
Firstly, I think it is important to reiterate what the article is about, which is growth. How can small retailers grow their business?
I believe we both agree that building a loyal customer base is essential to this cause; however, we seem to disagree on the approach to doing this - while I suggest owning an e-commerce store you instead see more benefit in investing in a combination of online and offline advertising.
Building a loyal customer base goes hand in hand with building a brand. For customers to be loyal they first need something to be loyal to. Once this is identified (i.e. a customer is aware of the brand) loyalty is then built through a combination of multiple customer experiences with that brand. Let’s use Nigeria’s most investable startup as an example – Printivo. No doubt Printivo has not only built a recognizable brand name but also a loyal following of customers – all from owning its own e-commerce store. Could Printivo have sold their services online via a marketplace? I assume they could have done this through DealDey or Vconnect. However, their decision to launch their own e-commerce store allowed them to control the customer experience, which goes well beyond simply ensuring that the customer is satisfied with the final product. They thought about the entire customer journey – from making it easy for customers to find what they want, to creating a design, to placing an order, to order fulfillment and after-sales support. Printivo’s CEO, Oluyomi Ojo, talks more about customer happiness in his interview with TechCabal. Much of Printivo’s success and growth can be attributed to, first, ownership of the customer experience and then the ability to execute exceptionally well time and time again. Selling through online marketplaces alone means retailers cannot replicate what Printivo has been able to achieve, as they do not have control over the customer experience. For this reason, investing in advertising to simply redirect customers to a marketplace to buy will be doing more to drive growth for the marketplace operator than the retailers themselves.
To address this statement:
When selling a homogenous product competition can grow fierce, however, avoiding a price war is in the best interest of all retailers because everybody loses. In situations like this retailers need to find ways of differentiation in order to grow and gain a sustainable competitive advantage. Investing in branding is one such way to do this (I recommend you read up on the cola wars: Pepsi vs. Coke, its super interesting).
Lastly, I acknowledge the risk involved in retailers setting up their own website and the many “corpses” of e-commerce stores that are still scattered across the web. However, as you suggested they came about “**from merchants who decided to create their own stores just because they thought it was required to succeed.” We know the operational environment in Nigeria is cutthroat, so if a retailer doesn’t know what they are doing they are bound to fail! This is why I said a retailer’s approach has to be strategic and well executed in order to gain customers and get ahead. Moreover, I feel it should be in the interest of those involved in this ecosystem to find multiple solutions to such problems rather than advocating for just one – being marketplace commerce. From my observation, what we can learn from the success of these marketplaces is that small merchants need guidance. This “hand holding” approach is what has driven the growth of marketplace commerce and even Sim Shagaya once spoke of its importance way back when he was at the helm of DealDey. Maybe the question is how can we transfer this experience into enabling merchants to succeed as an e-retailer?
Again, while I do see benefits of marketplace commerce for small businesses, I believe having more online stores is key to growing eCommerce in Nigeria as it will not only push for more customer acceptance but also drive innovation within the ecosystem.
I love this thread 
…
Me too. I have a lot to say… I’ll take my time to comment later
Hey @PapaOlabode thanks for you comments. I’ll try address them as best I can 
I’m quite unsure how you arrived at this, especially when you quoted my statement - “merchants are choosing to exclusively sell their products through online marketplaces.” I never implied that they were under restrictive contracts I explicitly said it was a choice. To your point, it was in fact by looking to Amazon and Alibaba and how merchants were using online marketplaces as marketing channels and not solely their online stores that, in part, incentivized me to write this opinion piece.
I made a call on where eCommerce in Nigeria might be in the industry life cycle. It is my belief that we are transitioning from introduction to growth – considering the concept of online commerce in Nigeria is seemingly not so much of a novelty anymore, the big players are being funded for the purpose of growth and there has even been a noteworthy exit already (DealDey). That being said, I think merchants do not need as much convincing on why to sell online but instead what approach to do so. And based on the provision of infrastructure by these marketplaces, coupled with the merchant’s lack of a comprehensive understanding of the hidden long-term impact of exclusive marketplace commerce, the decision on how to approach this is not seemingly well thought out and aligned with a growth strategy.
Again, I am not too sure what part gave the impression that “revenue should take the back seat.” Throughout the article I speak of achieving long-term growth and analyze how a “marketplace-only” approach might not help achieve this goal. In my conclusion I was advocating for merchants to consider using a combination of both online marketplaces and an e-commerce store. I believe striking the right balance could spark faster growth of e-commerce in Nigeria.
Hey @OyihomaS I think we’re slowing moving towards the same thought process but your use of Printivo as a case study is where we differ. I also think we might also be on two different ends with our definitions of what types of businesses qualify as SME as it seems you’re mostly referring to established brands.
Printivo, as you already stated, is the most investable startup in Nigeria and they have the funds, investor network and scale to prove that. Concurring with my point above, I would definitely recommend that a merchant like Printivo should own their sales pipeline because they clearly have the resources to support every aspect of their custom process due to the volume that I assume that their doing. While they may be creating a ‘generic’ product, their name and the quality of their products creates and enhances the customer loyalty to their brand.
On the flip side, for other merchants in Printivo’s space who do not have the name recognition, scale and are probably limited to one or two printing machines, I would caution on trying to imitate printivo’s model because the overhead of creating a website to design customized cards (developer, web maintenance etc.) could be potentially crippling if only a few people visit said website. Their best bet would be to go where their customers already are .i.e. jumia, konga marketplaces and then use the combination of offline and online advertising methods to direct people to their storefronts. This has already been proven in the Etsy model where custom designers and printers have been able to successfully create niches for themselves with custom business cards, wedding invitations etc.
When selling a homogenous product competition can grow fierce, however, avoiding a price war is in the best interest of all retailers because everybody loses. In situations like this retailers need to find ways of differentiation in order to grow and gain a sustainable competitive advantage. Investing in branding is one such way to do this (I recommend you read up on the cola wars: Pepsi vs. Coke, its super interesting)
Back to this point about homogenous product competition, I also think that using coke vs pepsi as an example is very misleading as these are two globally recognized brands with almost no additional competition (Dr Pepper?). A better comparison would be the hundreds of sellers on these market places selling very similar products (much like the image below).
I would argue that ‘Stylege’ in the picture above would not come close to the same volume if he/she sold the loafers exclusively via their own online store. Being on Jumia allows Stylege to immediately feel the market for their products and adjust prices accordingly. Now, every customer that purchases said loafers from Stylegee is now a potential returning customer that Stylege can follow up with via email marketing to alert of new deals and sales. There’s nothing wrong with a price war as it is a risk every merchant needs to understand before going into business. At the end of the day, what they believe the price of their goods is worth is not necessarily what the market thinks it’s worth and ignoring that could be the deciding factor on if they succeed or fail.
is good! But then you go ahead and title your post why online Marketplaces are not helping eCommerce grow in Nigeria, which above quote from you clearly doesn’t agree with it.
The fact is online marketplaces are helping eCommerce in Nigeria. You have not provided 1 example of a merchant that should not go to online marketplace, but there are 1000’s of datapoint examples of merchants that Jumia/Konga have brought online. How’s that not helping eCommerce?
I could possibly write a longer post about why your starting position is wrong (admittedly you make lots of good points), but the key thing is, we don’t even have anything near enough ecommerce marketplaces. Almost every good craft needs one because apart from merchants making money, it brings choices, quality check/minimum standards, variety etc to consumers.
Also you need to consider the unique stage of Nigeria (it’s definitely not ‘growth’ despite what you say), alternative marketplace use cases for the ‘small guys’ (e.g YouTube where Maker Studios or even IRokoTV started from), impact of marketplaces on BigCo (e.g I always buy my printer ink from HP on Amazon) etc and you would see that eCommerce marketplaces is great for Nigeria.
Well i think i go with @PapaOlabode here, Online Marketplaces act as marketing channels for Ecommerce stores not competitors.
People visit marketplaces which can be likened to a normal market scenario looking for cheap products to buy , i see a product i like and mr a and b sell the same product but mr a sells his own cheaper than mr b, in a marketplace i go for mr a but in a strict ecommerce scenario, i am looking for reliability and brand balance and may not necesarilly look at price.
As a merchant, make sure you have a strong USP and a well though out execution strategy to launch especially if youre selling generic products, building a brand involves money for offline and online marketing and activation and consistent execution and customer service that allows word of mouth spreading.
Customers follow price, quality and speed in their buying decisions while Merchants look at convinience and brand in starting commercial selling, the trick is finding a balance point for the two.
Big Ecommerce firms see onlinre marketplaces as a way of crearting more marketshare and brand relevance and hence are complimentary strategies.
So i dont think its harming e-commerce, its complimenting rather.
Again, Printivo’s case the website and process is its USP
@jogunjobi I do not think our definitions of SMEs are too different. Printivo is a great case study of how SMEs can succeed at their own ecommerce store provided they know what they are doing. I implore you to read the interview with Printivo in its entirety and you will see that the company’s starting point was arguably no different from any other SME.
Oluyomi Says:
“Our first machines, first hires, first bikes…came from our personal purse. Subsequently, we were funded by our customers.”
This is the same scenario most retailers launching their own ecommerce store would find themselves in when starting out. Before Printivo launched their ecommerce site they did not have the “high volume sales” you say is a necessity, in fact, Oluyomi discloses that their fist customers came from Printivo’s launch post on TechCabal. How they were able to grow into the “most investable startup in Nigeria” was by doing things differently. They knew that to achieve sustainability and growth a company has to be customer-centric. More importantly, they understood that this was not just about product satisfaction but encompasses every interaction customers had with their brand. Speaking on their success, Oluyomi says:
“It comes from delivering value, you can not play that down. Those little things like on-time delivery, replacements when customers complain will get people to keep coming. One of the most profound lessons I have learned is that all through the lifetime of your business, your number one funder is the customer with or without VC money,”
Discouraging people from imitating Printivo’s model is not helping. Entrepreneurship is all about risk taking, however, those who do it blindly will fail and those who take calculated risks will succeed. Printivo took a calculated risk that has paid off. They have been strategic in knowing who exactly their customers are, where they are and how to reach them – all off which excluded marketplace commerce. To supplement this they have executed well by proactively delivering value across the entire customer journey. The investment in developing their site shows that they have chosen customer lifetime value over cost of customer acquisition and their growth is a testimony to the benefit of that.
This is actually where marketplace commerce falls short. Jumia, like many marketplaces, limit the ability for merchants to remarket to customers directly via email campaigns. As the terms and conditions for Jumia sellers state:
- The merchant acknowledges that the relationship between customers and Jumia is governed by the privacy policy and the general terms and conditions, both available on the website.
Firstly, this explicitly states that the customer belongs to Jumia. Secondly, if you proceed to look at the privacy policy there is no mention of Jumia being obliged to pass on email or any useful marketing information to the merchant.
Why do they do that? Well, if the merchant had customer emails and could market to them a special offer that would generate a sale then the merchant and customer could arrange this transaction outside their marketplace, which means Jumia would not get a commission. Hence, in order not to leave themselves vulnerable, marketplace operators do not actively help merchants build a loyal following.
In addition, you have to consider the limited brand exposure of these merchants.
If a customer visits the same page you show as an example above what they notice most in terms of branding is the big Jumia logo in the top left corner. When they make the purchase they receive an email confirmation from Jumia in their inbox. When they receive a call confirming purchase or delivery the person identifies himself/herself as Jumia. When they arrive at your doorstep you are greeted with the person in a Jumia jacket and the bike behind them sporting a large Jumia logo plastered on its side. The package you open to retrieve your brand new loafers is covered in Jumia’s logo. How then is a customer meant to remotely feel that Stylege is responsible for meeting their needs?
If it is only sales a retailer cares for then marketplace commerce can do that. If it is growth they seek, merchants will need to invest in their brand. Referring back to this awesome Printivo interview (that every aspiring entrepreneur should read), every SME should pose to themselves the same question Printivo did, which Oluyomi says is:
“We asked ourselves if we wanted to deliver value or just rack up figures.”
@PapaOlabode I think the fundamental question we need to be asking is what will be the key driver of growth for eCommerce in Nigeria?
This requires us to step back and actually identify who within the e-commerce value chain matters the most. The answer is not the sellers providing the service, although crucial, it is actually the customer. Ecommerce is only as great as the customer says it is. It does not matter how many retailers sell online, what truly matters is whether the customer is happy with their experience shopping online.
My argument is that online marketplaces are not enabling consumers to have multiple experiences shopping online. When one of these marketplace operators fail to deliver a high quality shopping experience, consumers do not just question the retailer they question the entire concept. We are at a stage where Nigerians are still building trust with ecommerce, however, this trust is overly reliant on a handful of companies and that is dangerous. If one of the large players were to fail tomorrow the narrative would likely be questioning Nigeria’s readiness for ecommerce and not necessarily the actions of the individual retailer. This concentration of influence is not good for growth. If we are to grow ecommerce we need to empower more retailers by enabling them to launch a successful ecommerce store. This competition offers customers multiple ways to experience ecommerce and creates an environment where faster learning can take place for sellers and consumers.
I believe the first step to doing this is providing a more complete understanding on the impact of marketplace commerce on small businesses. This is to incentivize small businesses to think more strategically about ecommerce rather than put all their eggs in the marketplace basket.
That’s exactly what online marketplaces do! They are the first step in understanding the importance of small business owning their own online store.
You’re right in analysis but I think you’re over complicating or not aware of how real life scenarios work. So if you’re advising Bisi who happens to own a boutique on Victoria Island, what’s the first step to introduce her to ecommerce?
From your position; Bisi’s should get a developer, integrate payments, think of return & refund policies, organise shipping logistics, build CRM, track inventory etc before selling her first item. How long will this take; say 2 - 3 months? Instead a better approach is to get her on any of these marketplaces and have her open a store in minutes.
Then and only then, can you start pointing out the obvious disadvantages (which you’ve listed in your post). Yes, you’re right about concentration of services on a platform, but then those are part of disadvantages - they’re still a needed.
Hi @OyihomaS, thanks for your explanation of how the marketplaces work and how they limit customer retention and downstream communication and I have to admit that it supports your premise and is a huge disadvantage for the merchants. I’m starting to agree with your thought process albeit very slowly but there are still parts of your article I still disagree with.
While there are disadvantages to listing your wares on a marketplace like Jumia or Konga such as the ones you have described, I still have to oppose your view that owning your own online store is the solution.
Owning your online presence…YES…but not ‘always’ including an online store.
I personally believe that any merchant who is selling less than 50 - 75 items week over week should instead choose to bolster their online presence and look for ways (including owning a simple website like wix etc.) to direct people to their Jumia/Konga stores. I’ll still refer back to my original response that only merchants with high volume goods should consider owning their own online store so that they have more control over the end-to-end sales process which Printivo clearly falls into this category and chose to embark on successfully.
I think one thing we both have eluded to but haven’t fully tackled is the actual customer and customer acquisition which is ultimately the end goal. Yes, we want as many of these merchants to succeed but that is based on customer behavior. The customer in most cases is looking for the best possible deal and in most cases, will visit the first place where he/she thinks that deal can be achieved which in most cases is an online marketplace (same premise as a customer going to a physical market to get the best price on goods from multiple sellers instead of just going to the tiny store which sells a few items). Merchants first and foremost need to be where their future customers are and the first place most customers will visit right now are these marketplaces with thousands of options before maybe thinking about visiting your online store which has at most 40 - 50 items.
I’ll fully agree with you that it is an imperfect system and there are disadvantages to using online marketplaces up to and including you pointing out that merchants have no access to the customer and customer data after a sale is made. However, if every small to medium merchant decided to open up an online store, what we would get is literally hundreds to thousands of stores all selling little to nothing plus customer fatigue trying to navigate multiple stores trying to buy items to make up an outfit (e.g. visit 5 stores before finding and buying a shirt that I like, visit 3 additional stores to find shoes etc.) as opposed to going on Jumia and simply typing ‘casual shirt’ or ‘loafers’ and getting multiple results which would include the merchant’s wares if they are listed on there.
While it is a highly skewed balance of power, what these marketplaces offer is instant access to potential customers and low overhead to maintain an online store (no need for expensive developer, shipping, payments, shipping etc.). Once they have built their online presence and their business to a mid to high volume sales, then they should start investigating totally owning their sales pipeline.
On a side note, I think this is an opportunity for a smart business person to come up with an idea or platform which helps Jumia and Konga marketplace merchants drive customers to their storefronts if something like this doesnt already exist.
@PapaOlabode, I think you may have missed this part of the post:
“The appeal for retailers to sell through these marketplaces is evident as it requires substantially less investment than starting your own eCommerce store and, in addition, these platforms act as powerful marketing engines, which are capable of driving incremental sales for SME’s. Marketplaces offer an almost “hands-off approach” to selling online and this is what truly resonates with small business owners who are understandably not well versed in the concept of online commerce. However, while this strategy may work well for them in the short-term, failing to establish an e-commerce store of their own is a risk that will most likely prove harmful to their growth in the long-run.”
As you can see I never advised someone in Bisi’s position– a novice in online commerce – to open an ecommerce store as their first approach to selling online. In fact, I acknowledge the reasoning behind initially choosing marketplace commerce over owning an online store given how new the concept is to the “Bisi’s” of Nigeria. What I am focusing on here is long-term growth and how relying on marketplace-commerce alone presents considerable risk in reaching this goal for the reasons I explained.
I disagree with this. Marketplaces are the first step in helping small businesses understand the importance of selling online and not owning an online store. They are introducing these businesses to an emerging market opportunity but not how to take full advantage of it and capture more value from this channel. As you have made clear, owning an online store can be very complex as Bisi would have to:
Yes, participating in marketplace commerce is a quick and safe way for small businesses to get familiar with ecommerce, and more importantly see value in it. However, it hardly trains small businesses in all the aforementioned items that they need to know to own and operate an online store, least do it successfully.
Furthermore, I believe it’s easy to assume that as these small businesses sell more through these marketplaces they will inevitably see the value of online commerce and choose to set up their own shop. But there can be a very strong urge to stay satisfied. I mean if marketplaces are bringing in money why try and fix what isn’t broken? This is why I am speaking of the disadvantages, in order to provide a more complete understanding of how it could impact small businesses down the road. In addition, marketplace operators have no incentive to encourage these small businesses to set up their own shop, so whose responsibility is it to offer these small businesses the guidance they need? The answer is the ecommerce ecosystem. This is whom I refer to when I say:
“More needs to be done to enable SME’s understand the importance of owning their own e-commerce store as well as actually helping them launch and manage it.”
Growth of ecommerce in Nigeria is interdependent. If sellers are slow to progress everyone else in the ecosystem will be slow to progress and this ultimately affects consumers – who are the key drivers of the industry’s growth. However, if the ecosystem were to encourage and support more online stores that would mean more business for the ACE’s and MAX’s of Logistics, the Paystack’s and Paga’s of payment gateways, and, of course, the Prognostore’s of inventory management (I had to throw this in there ). Moreover, and, most crucially, it would mean customers are met with multiple ways to experience ecommerce and, hopefully, strengthen their trust in it meeting their needs.
@Jogunjobi Let me first address this:
The idea that moving a large volume of goods every week is the only way a merchant can succeed or cover the cost of operating an online store is inaccurate. A merchant can also afford the cost of operating an online store if they sold low volume-high margin goods, for example luxury items. In addition, what is far more important in succeeding at operating an online store is that the merchant knows what they’re doing (i.e. they are not a complete novice to the concept) and are willing to devote the necessary time, energy and money into it. There is every possibility that a merchants raking in millions of naira worth of sales on marketplaces could create their own online store and still fail woefully. There is also every possibility that a merchant who chooses to start selling online by launching its own ecommerce store can succeed (Printivo is an example of this scenario).
I believe this is going back to your suggestion of investing in advertising to achieve growth. When trying to achieve growth a business will find that retaining old customers is much more valuable than gaining new customers. This is because convincing a previous customer to make another purchase costs the business much less than convincing a new customer to buy for the first time. This concept is key to growth as it implies cost of customer acquisition will fall in the long run, which improves the profit margins for the merchant. As you have acknowledged, merchants are at a huge disadvantage when selling through marketplaces due to their inability to remarket to their previous customers. This means they are not able to retain customers effectively. Hence, investing in advertising will continue to bring new customers that replace the old customers. This will more so help the merchant be sustainable than helping them achieve growth. What is more worrisome is that marketplace operators are capable of marketing whatever they want to these new customers. This lack of control creates the possibility that the marketplace operator could market a competitor to a customer the merchant may have brought.
Furthermore, what accelerates growth is not just acquiring customers but loyal customers, who will unwaveringly choose the merchant over its competitors time and time gain, as well as freely refer the merchant to others. As I mentioned before, loyal customers are a result of a brand repeatedly delivering highly enjoyable customer experiences. And providing a highly enjoyable customer experience entails more than telling a customer you have the product they are looking for or the customer receiving a product that works as described. These are important, but if it were that simple loyal customers won’t be hard to come by. To offer a great customer experience the merchant has to consistently show customers high levels of attention, care and support through out the customer journey. Customers need to be pampered and this is something online marketplaces do not allow merchants to offer.
That being said let me be clear on where I stand with marketplaces. I never said marketplaces are of no value to small businesses, customers or ecommerce in Nigeria as a whole. I am not advocating for online marketplaces to pack up and go. No doubt a significant amount of shoppers initiate their product searches on online marketplaces. No doubt marketplaces offer small business owners an opportunity to benefit from the Internet as an emerging sales channel. My criticism of marketplaces is focused on how it is affecting long-term growth of SME’s and the impact this may have on ecommerce progressing in Nigeria. My position from the beginning has never been for a merchant to choose between joining an online marketplace and owning an online store when attempting to start selling online. What I am advocating for is that SMEs should not get complacent when selling online by choosing to sell through these marketplaces only. This is why I said:
While I do believe small business owners who are trying to get off and running with selling online should include marketplace commerce as part of their eCommerce strategy, as it will help them reach a wide audience, it should not be the entirety of it.
The decision to launch an online store takes a lot of consideration for any business owner. It may not be the right choice for every SME, however, for a merchant to scale into a recognizable brand, they will need to move away from marketplace commerce at some stage.
You can’t really go neck to neck with these big guys. Very fat marketing budgets - you get lost - little or no visibility in Ads’ World.
Why should I bother about my own store(website) when I can sell on Jumia Mall/Market, Konga, Vconnect? More visibility for me. In the near future, you could become a top seller and a bit of a brand yourself since you become very popular. Several examples in UK, USA.
And someone mentioned branding. Jumia everywhere: email, the delivery guy, the delivery box and so on.
Seriously, who should be there? the merchants?
Marketplaces can’t provide all the logistics you will need. In Nigeria, most of them allow the use of several 3pls as well self-delivery. If you are willing to deliver yourself, you can as well brand the delivery guy and box.
One thing that won’t change is: Every big brand will take every opportunity to increase its visibility in anyway possible.
I really don’t see this as an issue.
