Nigeria ranks 100th in eCommerce growth index

• Smartphones serve as largest enabling platform

Although the frenzy for electronic commerce (eCommerce) is hitting higher waves in Nigeria, the country was, however, ranked 100th out of 137 countries, for the second year running, according to a survey by the United Nations Conference on Trade and Development (UNCTAD).

A copy of the survey, which measured the readiness of countries to engage in online commerce, obtained by The Guardian, titled: UNCTAD B2C E-Commerce Index 2016, Luxembourg, for the second consecutive year, topped the performance chart. Among the top 10 economies, six are European, three are from the Asia-Pacific region and one is from North America.

From the developing economies, three high-income countries – Republic of Korea, Hong Kong and Singapore – ranked the highest, followed by several Gulf states. Uruguay is the top performer in Latin America and the Caribbean. At 61st place in the Index, South Africa is the front-runner in e-commerce readiness on the African continent.

The greatest improvements compared with the 2014 Index are noted for Qatar (up 47 positions) and the United Arab Emirates (up 41 positions), in large part due to an improved indicator measuring postal efficiency. Conversely, Madagascar and Sierra Leone are negatively affected by the changed methodology and see the largest declines in ranking.

The UNCTAD B2C E-commerce Index 2016 is composed of four indicators: Internet use penetration, secure servers per one million inhabitants, credit card penetration and a postal reliability score.

The United Nation’s body noted that this year’s Index was improved by increasing the geographic coverage (from 130 to 137 economies) and fine-tuning the indicator to measure the delivery aspect of e-commerce. The straightforwardness and transparency of the Index allow countries to compare how they perform in different areas. The 137 economies represent 96 per cent of the world population and 99 per cent of world GDP.

UNCTAD noted that eCommerce readiness varies by region. It added that just over a fifth of the population in Africa uses the Internet compared to two-thirds in Western Asia. While Western Asia and transition economies fare well on most indicators, credit card availability is average. Overall, it pointed out that Asia needed to boost Internet penetration, which currently stands at just over a third of the population, as well as the number of secure servers.

“In Latin America and the Caribbean, the main barriers appear to be low credit card penetration and relatively poor postal reliability. Africa ranks the lowest in all the indicators. Unless there is improvement in the underlying transaction and logistics processes, African online shopping is likely to remain confined to wealthier populations in urban areas”, the report stated.

According to the statistics, on the African continent, Mauritius is second on the index at 70th after South Africa. Tunisia, Morocco, Egypt, Botswana, Kenya, Senegal, Algeria, Ghana ranked 73rd, 79th, 82nd, 85th, 86th, 91st, 95th and 99th respectively.

Meanwhile, the Q1 eCommerce Q1 report data by performance marketing firm, Criteo, revealed that 73 per cent of the transactions in Nigeria happened on smartphones in Q1.

The report, which showed smartphones becoming the dominant m-commerce device indicated smartphones taking a huge chunk, about 18 per cent in Africa, of eCommerce transactions compared to about 10 per cent share of other mobile devices. The report also highlighted mobile versus desktop sales trends in the country with desktop sales dominating e-commerce transactions within weekdays and Saturdays while Sundays share equal transactions rates between mobile and desktops. This is in contrast to South Africa’s mobile commerce trends where mobile dominates all weekend transactions.