“Nigeria B2C E-Commerce Market 2019” is the title of the new report released by Germany-based secondary market research specialist yStats.com. According to the report’s findings, the country has an untapped online retail market potential, with strong double-digit growth projected through 2023.
Double-digit growth rate projected for Nigeria’s online retail sales
With its large and growing population, Nigeria has an untapped potential for B2C E-Commerce. Internet penetration is projected to rise by nearly 10 percentage points between 2018 and 2023, up from around one-third of the country’s population last year. More than 50% of connected consumers shop online, mainly for electronics and fashion items, according to surveys cited in the yStats.com report. As shoppers grow more confident with making purchases over the Internet, both the number of digital buyers and their spending is projected to increase. Over the forecast period through 2023, online retail sales in Nigeria are expected to maintain a strong double-digit growth rate.
Underdeveloped infrastructure challenges the growth of E-Commerce in Nigeria
While rising Internet connectivity contributes to the growth of E-Commerce sales in Nigeria, several major barriers still exist, yStats.com’s report reveals. Among them is the underdeveloped logistics infrastructure, inhibiting efficient and reliable delivery of E-Commerce orders. Furthermore, the country’s population remains largely unbanked and has no access to traditional electronic payment methods such as credit cards. As a result of these and other challenges, several E-Commerce companies exited the market in 2018, while others succeeded in overcoming the hurdles by building their own fulfilment and digital payment capabilities.
Regional player Jumia leads the online retail market in Nigeria
One of the market leaders with a robust E-Commerce infrastructure is Jumia. Based in Nigeria and operating across 14 African markets, Jumia launched its IPO on the New York Stock Exchange in April 2019, potentially leading to further expansion of its market share. Faced with increased competition and infrastructure challenges, two other major players, Konga and Yudala joined forces in 2018, introducing a combined E-Commerce marketplace under the Konga brand. International competitors are also active on the Nigerian market, with Amazon and AliExpress ranking among the favorite online shopping destinations of Nigerian consumers, according to a ranking included in the yStats.com report.