‘How e-commerce can contribute N1tr to Nigeria’s GDP by 2018’
If challenges bordering on e-commerce trust, network reliability and network security issues as well as payment interface issues are addressed, Nigeria’s e-commerce sector can contribute N1 trillion to the nation’s Gross Domestic Product by 2018, latest e-commerce report has revealed.
Indeed, the National Bureau of Statistics had noted that the e-commerce sector is expected to contribute about 10 percent, of the projected N10 Trillion to the nation’s Gross Domestic Product (GDP) by 2018 if key challenges are addressed.
While e-commerce has begun to experience significant and remarkable growth, in the country, statistics show that the numbers are still relatively small compared to the rest of the world, even as the numbers and trend forecasts are showing great potential for sustained growth following the arrival of more e-commerce sites over the last few years.
A report by eMarketer, an online e-commerce research company, showed that e-commerce is growing at a rate of 16.8 per cent yearly globally; while in Africa, the e-commerce space is put at 25.8 per cent – making it the fastest growing sector in the world.
“There are still a number of significant hurdles to overcome in this sector to achieve these projected growth rates. The steady increase in e-commerce is being threatened by issues such as e-commerce trust, network reliability and network security issues; as well as payment interface issues; Internet accessibility. The Internet as a whole in Africa is still on a steady growth trajectory and access to the Internet is achieved primarily via mobile devices, which is still quite limited.
“When a survey across three of the more vibrant and growing e-commerce markets in Africa, notably – Kenya, Nigeria, and South Africa was carried out, one of the questions posed to respondents, was; “What is the largest obstacle for patronizing online e-commerce platforms in your country?” It was revealed that respondents considered ‘Delivery time’ a major obstacle factor to the patronage of e-commerce in Africa.
“Other factors included cost, internet connectivity, lack of purchase and payment options and lack of security. Some additional hurdles that e-commerce has had to overcome in the recent past, include a fear of online security regarding online payments (and successful online processing), to high delivery costs, and long lead time, amongst others.
“Some other respondents have expressed mistrust of the online payment systems and a lack of full process knowledge and understanding of the e-commerce process, as to the reasons they have not so far patronized e-commerce in the African region. The rate of online scams also makes people afraid to put their private information online. A number of responders still do not trust the safety of the systems and are therefore not ready to enter their secret passwords on some random e-commerce sites, regardless of the substance or popularity of the sites and their offerings”, a report by CP Africa explained.
Regardless of these challenges, stakeholders believe that e-commerce is on the rise and will sustain the growth.According to them, the rapid adoption, and consumer affinity for online shopping once the hurdles are overcome, will increase significantly in the coming years.
In order to overcome the identified challenges, one of the e-commerce platforms in the country, Konga.com noted that it has been working on new innovations to ensure that the average consumer is drawn closer towards the medium.
Indeed, the firm introduced a secure payment solution model, ‘KongaPay’ – to further afford customers confidence to process their purchases to the point of making payment online.
Other key e-commerce platforms in Nigeria – Jumia, Yudala, etc., – have tackled delivery issues by offering the 24 hour delivery model, which guarantees that orders made get delivered by the next day.
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