POOR LOGISTICS, INFRASTRUCTURE GAPS BATTLE ECOMMERCE OPERATIONS IN 2019
The hydra-headed challenges of poor logistics and infrastructure gaps have been identified as major factors that limited the development of electronic commerce (eCommerce) in Nigeria in 2019. These challenges are said to have impacted operators’ performance, caused hitches in delivery, and affected bottom lines. The current e-Commerce spending in Nigeria is estimated at $12 billion and is projected to reach $75 billion in revenues yearly by 2025.
But in a chat with journalists in Lagos on Monday, the Chairman, Zinox Group, Chief Leo Stan Ekeh, noted that eCommerce operators are currently battling logistics challenges, coupled with infrastructure decay, and the issue of trust across the country. Ekeh, who said the prospects for eCommerce is huge in Nigeria, going by the market size and the bourgeoning sector, noted, however, that the issue of poor logistics must be tackled adequately if efficiency must be achieved.
Ekeh, whose Zinox Group is the parent company of Konga, said the eCommerce platform has invested hugely into logistics to ensure smooth operations, including opening new warehouses at strategic locations across the country for improved distributions, investing in logistics companies for onward and faster distributions.
The Zinox Chairman, who said Nigeria is still suffering from online fatigue, disclosed that Konga staff are also undergoing various trainings that will make them more effective and efficient to be able to meet the growing demands of online shoppers in the country in 2020, and beyond. He disclosed that in the new year so many innovations will be unveiled to boost Konga’s operations across the country.
According to an ICT expert, Tade Adelegan, the future of e-commerce in Nigeria is still very bright despite the challenges recently noticed in the industry. “It is said that companies like OLX, DealDey, Efiritin, and few others shut down their businesses in Nigeria claiming non-profitability. I know that few others are also struggling but I believe that should not spell doom for the industry in Nigeria if the industry players make deliberate effort to develop it,” Adelegan noted.
In recent times, according to streettolz, more than 32.88 per cent of the Nigerian population already has access to the Internet and the rate of mobile phone usage increased to over 87 million representing an attractive market for mobile commerce. Nigeria’s e-commerce market was recently valued at N225 billion or $1.3 billion due to the 25 per cent in e-commerce growth.
“These are impressive statistics that should not be overlooked. As a strategy for survival, diversification could be the way to go. E-commerce owners must be deliberate and put into adequate use of the data they have on consumer behavior to invent other services that would continuously grow their clientele. Such services could be new or be an expansion of the existing ones,” Adelegan advised.