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Nigeria e-Commerce Market To Hit $13bn In 2018 – Study



The fourth edition of Nigeria Mobile Report released yesterday by Jumia Nigeria estimates that the country’s e-commerce market is worth $13 billion this year, indicating a gradual adoption of online marketplace by consumers. The study showed that Nigeria remains Africa’s largest mobile market, with about 162 million subscribers and a penetration rate of 84 per cent. The number of subscribers fell in 2017 as consumers responded to a poor economic climate, adopted other OTT channels for voice and data services, and as regulatory measures continued to oblige operators to disconnect unregistered SIM cards.

The chief executive officer, Jumia Nigeria, Juliet Anammah, speaking at the launch of the Mobile Report in Lagos, said despite the setbacks, “we noticed four key growth drivers enhancing the adoption of smartphones in Nigeria and Africa: First, the multiplicity of affordable smartphones and a growing market for second-hand devices played a major role in driving the country’s e-commerce sector, which is estimated to be worth $13 billion by 2018. She said: “The third lever is the multiplication of easy payment options such as credit or debit cards payment, or even cash on delivery; and the fourth is the increasing use of social media sites (active social media users).’’ The Jumia report revealed an 11 per cent increase in the number of Nigerians who visited the Jumia website via their mobile phones – 79 per cent in 2017 versus 71 per cent in 2016. Meanwhile, those who used their desktop computers or laptops dipped to 18 per cent in 2017 compared with 29 per cent in 2016.

The report also shows that in 2017, 70 per cent of Nigerians preferred the cash on delivery option, compared to 28 per cent and 12 per cent for credit/debit cards and mobile money options respectively. Anammah, described the upward shift from desktop to mobile as a positive development. She attributed the increase in the number of mobile phone users to the multiplicity of affordable smartphones, especially the Asian mobile brands which continue to build on their Africa-specific strategy by introducing lower price points’ smartphones adapted to the profiles of African users. She also listed a growing market for second-hand devices and the increasing use of social media sites (active social media users) as contributing factors.

Anammah further hinted that “the mobile industry continues to play an increasingly important role in the socioeconomic development of the African region. As Nigeria swiftly becomes a mobile first country, with mobile phone penetration currently at 84 per cent of the population, Jumia is doing its bit to close the gap with sales initiatives such as Jumia Mobile Week.” The availability of lower price points’ phones has paved way for more Nigerians to own mobile phones. With an increase in the number of affordable phones entering the Nigerian market and looking at the trajectory of growth between 2016 & 2017 (31 per cent growth year-on-year), there is a strong indication that by the end of 2018, there might be a 100 per cent penetration of mobile subscriptions, the study noted. This year, the stage is set once again for the biggest sale of mobile phones, beginning March 19th through 25th.

This is a mobile-phone-only oneweek-long sales event dedicated to opening up our customers to a wide range of mobile devices at half the normal prices. “We believe that, by end of 2018, at least every Nigerian will have access to a mobile phone,” added Anammah. In his remark, the chief transformation officer of MTN Nigeria, Olubayo Adekambi identified “the expansion of E-commerce into a dual business model that blends the physical and the digital to create an ecosystem between brands and consumers across the two worlds”, as among the major factors fueling the increase in adoption of smartphones. In order to ensure rural dwellers have increased access to ICT devices such as smartphones, the National Information Technology Development Agency (NITDA) has created an IT Innovation hub, which has the capacity to produce e-literate groups from low skilled or low paid workers, unemployed people, and those with disabilities who do not have access to these ICTs.