A New Way of Doing Buisness

Fri, Aug 23, 2013

By publisher

8 MIN READ

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Online business which is now booming in Nigeria has revolutionised the way Nigerians carry out business transactions

|  By Chinwe Okafor  |  Sep. 2, 2013 @ 01:00 GMT

ONLINE business has become a booming trend in Nigeria. The business is fast spreading like wild fire especially amongst the youths and technology-minded adults. Within the last two years, various private and public online business platforms have continued to rollout in Nigeria. The likes of Jumia.com, OLX, Konga, Buylocalthings.com, Wakanow.com, Worldmartafrica.com to name but a few have flooded the internet space, making it easier for online shoppers to purchase at any given time.

Consumers have realised the benefits of shopping from the comfort of their offices or homes, or with the convenience of their internet-enabled mobile phones. Samson Elijah, a business man, said that online business should be encouraged seriously in Nigeria. “I’m relieved with the stress of going to the market in order to purchase one item or the other; all I need to do is, use my debit card and make transactions, and the item is delivered at my doorstep. I’m really enjoying this trend,’ he said.

But this trend is not acceptable with Chika Ogu, a student, who said she doesn’t like the idea of buying goods and services that she could not see and touch physically. “I can’t risk it at all, because I’m not confident that the online merchants are trustworthy enough to deliver the products and services as promised. Not even in this country where there is high incidence of cyber-crime, how do you expect me to send my card to someone online? I know that there are people who do it, but I can’t do it because I don’t trust this online thing at all. Many people’s emails are being hacked into on a daily basis, and likewise banks’ websites are accessed without any penalty for those caught. If emails and websites are not safe from hackers, tell me how safe my debit card will be? Nigeria uses the chip and pin, but these bad boys have a way of generating the numbers to use people’s cards to also purchase goods online. I am still skeptical of buying goods online,” she said.

Sim Shagaya, managing director, Konga.com, said that online shopping is revolutionising the way business is being done in Nigeria. The internet has revolutionised the way many things are done in the country, including buying and selling. “Buying and selling are now being made attractive with online shopping because it helps to avoid traffic jams, long payment queues, pick pockets or robbery incidents and several other things faced by the typical Nigerian shopper,” Shagaya said.

Tunde Kehinde, a co-founder of Jumia.com and one of the leading online retailers, said that Nigeria is fast-approaching an increase in economic growth which is a major player in the e-commerce industry. He referred to ecommerce as the process of buying and selling of products or services on the internet and also stated that the internet has no doubt come to stay with its amazing possibilities.

Kehinde, said that Nigeria recorded an estimated 25 percent growth in online shopping with revenues valued at N62.4 billion in 2011, which is a N12.5 billion increase from 2010 value. He also stated that with more than 160 million people, Nigeria stands a great chance to become the next e-commerce hub of Africa. “Online shopping has changed the way customers and retailers think. Customers are constantly seeking to comfortably shop endlessly while retailers are constantly seeking new paths to growth. A country’s prospects for online retail success are closely related to how many people use the internet and how many are comfortably purchasing products online in terms of security and customer satisfaction,” he said.

Raphael Afaedor, another co-founder of Jumia Nigeria, said that e-commerce could integrate several nations into the global market, which in turn would improve and strengthen the economic well-being of these nations. He highlighted some basic factors, which he termed as obstacles to the growth of e-commerce in Nigeria which includes lack of basic infrastructure like; steady power supply, good roads as well as limited access to telecommunications infrastructure and high cost of internet facilities.

“The power situation in the country has remained very poor; there is the issue of limited access to telecommunications infrastructure and high cost of internet and the roads are not fantastic either. Being an online retail company, it is of utmost importance to keep our power structure up and running all day, seven days a week. One can wonder its financial implications on the business and how we manage to stay competitive with our pricing; it’s simple. As a company driven by targets and customer satisfaction, we have built a mesh network of top local and international brands with a mission to bringing best quality products to our customers at the best price deals anywhere in the country. This, in turn, has helped us to see a steady increase in our customer base, giving us the capacity to manage this challenge,” he said.

Afaedor said that they try to gain the trust of their customers and prospects alike, while also constantly looking for channels to reach our customers to show them that we care about bringing solutions to what should, indeed, be a relaxing experience. He noted that the electronic way of doing business was a new concept in Nigeria. Most people are used to buying and selling face-to face whereby they see and touch what they want, negotiate on best deals, and buy. He explained that in a bid to address the issue of trust, Jumia Nigeria allows its customers to pay on delivery after they must have seen, touched and confirmed the delivered product.

According to him, Nigeria’s e-commerce had grown steadily but the lack of legislation that specifically targets cybercrime or cyber security has, no doubt, continually hampered its accelerated growth and concerns raised by such nefarious activities, no doubt, calls for a legal intervention. Therefore, the need for a cybercrime law in the country should not be over-emphasised.

The role of government towards the growth of e-commerce in developing nations cannot be over emphasised. In Nigeria, for instance, Afaedor called on the government to take advantage of the potentials inherent in e-commerce for the development of the nation. He said because of poverty, under development and lack of accurate internet penetration, most people in the country are not benefiting from the e-business industry both from the customer and merchant perspective. He also stated that if the three tiers of government could work towards handling some of the afore-mentioned problems of e-commerce in the country, a higher success rate would be recorded thus the nation can leap frog its economic growth.

Meanwhile, Olusegun Aganga, minister of industry, trade and investment, said that it has concluded plans to ensure that Nigerians in the diaspora and foreigners planning to register their businesses in the country can do so online from any part of the world in the next two months. He said that the Corporate Affairs Commission had begun the process of ensuring that the 24-hour business registration was achieved in all states across the country, adding that more states had been covered since the commencement of the initiative in July 2012.

“Since the inauguration of the 24-hour business registration in July 2012, 35,902 companies have been registered within 24 hours. So far, we have achieved a 10 percent increase in the number of companies registered, and an increase of 33 percent in business names registered and 42 per cent increase in incorporated trustees. Currently, the 24-hour business registration process is attainable in Lagos, Abuja, Kano and Kaduna, with Port Harcourt and Enugu following shortly. Also, the global online business registration is to take off in two months’ time. This will ensure that anyone can register their businesses in Nigeria from any part of the world, and also make payment without necessarily coming to Nigeria,” he said.

Aganga noted that in line with the transformation agenda of President Goodluck Jonathan, the ministry was exploring new ways of unlocking domestic and international capital to boost local and foreign direct investment across all sectors of the economy, adding that the move would create more jobs and generate wealth for the country.