By Chima Akwaja, Lagos
The e-commerce industry is at risk of losing its over $1.9 billion investments as many Nigerians live in constant dread of online fraud and will do anything to avoid using their debit cards to process payments electronically, LEADERSHIP Sunday checks have revealed.
Electronic commerce is still at the rudimentary stage in Nigeria, with the pace of adoption and acceptance decidedly slow.
Despite the huge strides recorded in the landscape, especially with the massive awareness for globally celebrated shopping festivals such as Black Friday and Cyber Monday, among others, the average Nigerian is still an unrepentant traditional shopper.
A recent report released by the Oxford Business Group revealed that retail sales hit a whopping $22 billion figure globally in 2016, with online shopping figures accounting for a major part of this outlay.
In advanced climes where access to the internet and of course literacy stand at appreciable levels, e-commerce has become a lifestyle for many.
Interestingly, global retail sales, of which e-commerce makes up a major part, is projected to rise further to an estimated $27 trillion by 2020.
Nigeria has also been bitten by the e-commerce bug. This has been made possible by the proliferation of online stores all competing for the attention of shoppers, many of whom are eager to jump on the ease and convenience of the e-commerce train.
LEADERSHIP Sunday gathered, however, that unsavoury experiences from delivered orders in recent weeks have called to question the future of e-commerce in Nigeria.
Many Nigerians live in constant dread of online fraud and will do anything to avoid using their debit card to process payments electronically.
According to data from the Nigerian Inter-Bank Settlement System (NIBSS), the year 2014 saw 1,461 reported cases of electronic or e-fraud, with actual losses grossing N6.216 billion.
In 2015, about 946 attempted e-fraud cases were also recorded by banks, other financial institutions (OFIs) and mobile payment operators (MPOs), resulting in an estimated loss of N5 billion.
Recently, Minister of Communications, Barr. Adebayo Shittu indicated that about N78 billion was lost yearly in Nigeria to all forms of cybercriminal activities. This reality has stunted the growth of e-commerce in Nigeria.
Recently, Nigerians woke up to hear about the killing of a Jumia delivery man who went to deliver two iPhone handsets in Port Harcourt and an Uber driver who was killed in Ogba, Lagos by sadistic and treacherous customers.
On March 26, 2017, Nigerians were stunned with the gory tale of Mr. Chukwuma Eleje, an employee of a third party logistics provider, iHub Global Solutions who was strangled to death and dumped in a septic tank by two men and a lady while at the point of delivery in Port Harcourt and had his motorcycle stolen as well.
As if that was not enough, on April 11, Mr. Iniovosa Emmanuel was killed by two men who pretended to be in need of the online taxi service, UBER. They strangle the driver and escaped with his car to Edo State where they had planned to sell it.
The suspects had reportedly boarded the vehicle from Ikeja enroute Ogba before ordering the late driver to head for a different direction where he was killed.
These dastardly acts have forced Payporte.com, another indigenous online store and sponsor of the just concluded Big Brother Naija reality show to suspend the ‘Payment On Delivery’ as part of its payment options.
According to the online store, only online secured payments and bank transfers would be accepted as means of payment from Monday March 3, 2017.
Managing Director of the firm, Mr Eyo Bassey, who explained the step was taken for security reason said: “Our decision was necessitated by the increasing risk and security challenges posed by this payment option.
It was also to reduce the amount of cash carried from one location to another by our delivery staff.
“We encourage our customers to make use of our other secured electronic payment options such as online payment or bank transfers for payments. We believe this will also play an active role in the growth of e-commerce business in Nigeria as well as give a new dimension to the business”, Eyo further stated.
In line with the suspension, refunds for unsatisfied customers would be processed within a maximum of 48 hours while only customers who have shopped on PayPorte for five times or more will be able to access the POD option from April 10 pending its total discontinuation.
PayPorte’s oead of Operations, Boma Igah said: “We understand the likely challenges which our customers may face as a result of the new policy.
We have therefore put in place systems to handle refunds faster within a maximum of 48 hours. Customers who have shopped on PayPorte for five times or more would enjoy the pay on delivery option from April 10, 2017, pending its removal from our payment options.
“Customers that had already placed orders using the payment on delivery orders before March 3, 2017, would be allowed to pay using that option but for future orders, customers would be required to make payments using our various secured payment options”.
To ensure adequate security for e-commerce operators’ personnel, e-head of public relations and social media, Jumia Nigeria, Ojuola Asuquo, said they had completed a comprehensive review of their delivery operations and the framework for all service providers to be put in place.
He said, “Delivery agents who receive a call from a customer asking for a change in their delivery address after the agent has already left the office have been asked to notify the office and obtain approval before proceeding to the new delivery address.
“Agents will make all deliveries in an open and visible space, not inside private residences. Where it becomes necessary for an agent to enter a customer’s residence, for example, to assist with a heavy item being delivered, the agent will notify the office before entering the residence.”
Sadly, the e-commerce experience in Nigeria has been stalled by the action of some online retailers who end up disappointing the customer with the delivery of items different or inferior in quality from the one seen or ordered online.
For Mr. Prince Ekeh, vice president, Yudala.com, Nigeria’s composite e-retailer, in such a case, the customer has to bear the inconvenience of having to either navigate the thorny process of seeking a refund or waiting for an extra lengthy number of days to get the right item.
He noted that this is why ensuring that “what you see is what you get” remains a unique selling point in the e-commerce market.
Ekeh said, “Despite the growing appeal of e-commerce, available data shows that the shopping behaviour of majority of Nigerians is still largely traditional – with many preferring to see, touch or experience the product in action before making the buying decision. E-commerce has become a thriving global industry.
“Commerce in Nigeria originated from a traditional stand-point. Nothing feels better than haggling with a seller face-to-face and eventually securing a bargain. The glint in the eyes of the buyer and renewed spring in the steps are a sight to behold. For now, at least, e-commerce will struggle to completely wipe away this culturally-ingrained shopping behavior”.
A recent report revealed that the Nigerian e-commerce industry recorded a handsome $1.9 billion figure in 2016 and the figure is expected to reach an estimated $3.9 billion in 2020. However, e-commerce in Nigeria has remained a predominantly urban phenomenon.
For many in the hinterlands and rural communities hobbled by the absence of the most basic infrastructure, e-commerce will remain an abstract concept for a long time. To reach these ones, citing a physical store not too far from their location remains the best bet.
To this effect, Ekeh said, “In spite of the massive hype and growing status of e-commerce in Nigeria, you are better off convincing the average Nigerian to make the final buying decision when you can provide him or her with an opportunity to ‘experience’ the product before parting with his hard-earned money. This often involves visiting a physical or brick-and-mortar store location to interact with sales attendants and getting a chance to see a demonstration of the item before the sale is closed.
“Cases abound of most walk-in customers actually admitting to having checked out a particular product online but still preferred to physically visit the store to see the product before purchase,” he added.
Other experts also called for education and implementation of cashless Nigeria as well as the need for institutions to do background checks on credit worthiness of customers before using the pay-on-delivery option.