With ecommerce growingly becoming popular in Nigeria, the sector is expected to be worth US$13 billion in 2018 according to a new report.
THISDAY said the country’s leading online stores achieve about $2 million worth of transactions per week (approximately N1.5bn per month). These figures rose to 15,000 orders daily, with market size valued at $550 million (N88 billion).
In the last year alone, Jumia and Konga received $50 million (N8.25 billion) investments. Since 2012 till date, the sector has attracted $200 million Foreign Direct Investment (FDI). Meanwhile, analysts at FBN Capital believe the development of this sub-sector is an extension of the story of the emerging middle class and rising consumption generally which the portfolio community has embraced.
In a report, they stressed that Nigeria’s retail industry has become increasingly sophisticated, evolving from open-air markets to modern malls and online shops.
“Small and medium-sized enterprises (SMEs) are now primary drivers of growth for e-commerce. Cost reductions and improved marketing reach are two of the main advantages which electronic platforms offer.
“Future growth will very much depend on the evolution of internet penetration. According to the Nigerian Communications Commission (NCC), active internet subscription via GSM was estimated at 83.2 million in February, equivalent to a penetration of 49 per cent. Based on industry reports, countries with highly successful e-commerce industries such as the United Kingdom, the United States and Norway have correspondingly high Internet penetration rates of 87 per cent, 81 per cent and 95 per cent respectively,” FBN Capital stated.