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E-commerce key to Nigeria economic diversification

04 December 2015, 16:13

Abuja - E-commerce has been identified as one of key sectors to steer the diversification of the country’s economy.

According to analysts, the expansion of this industry could stimulate the much needed growth of Nigeria's non-oil economy and contribute to broadening its horizons in the medium to long term.

The retail trade industry is benefitting the most, with digital goods accounting for 47 percent of monthly sales while clothes, shoes and fashion accessories account for about 39 percent on a monthly basis.

According to FBN Capital, foreign suppliers are penetrating the Nigerian market gradually via e-commerce platforms.

“Small and medium-sized enterprises (SMEs) stand to benefit immensely from the online market space as it is more cost effective and a faster way to increase their visibility and reach. The SMEs are a growth engine for Nigeria's economy; leading online retail platforms are already incorporating SMEs to drive their businesses,” the think-tank added.

Also read: E-commerce to foster Buhari's plan to diversify economy

In an attempt to support Nigeria's e-commerce industry, DHL, the global logistics firm has announced plans to invest US$20 million across its key divisions in Nigeria.

In addition, e-commerce is also playing a pivotal role in Nigeria's hotel and travel industries.

Based on data from Jovago, a leading hotel booking company, 27 percent of Nigerians use online platforms to book and pay for hotel rooms while 73 percent pay on arrival.

In addition to this, 51 percent of Nigerians prefer to book less than a week in advance while 31 percent book hotels on the same day of their arrival.

However, FBN Capital said while broadband penetration in Nigeria was still low at 10 percent, the country was likely to experience steady growth of 3G access.

The 3G network enables access to the internet over mobile devices at a data speed of 2Mbps.

“As access expands, it should have a transformative impact on Nigeria's growing e-commerce market,” FBN Capital projected.

According to the Nigerian Communications Commission, the industry regulator, active internet subscription via GSM was estimated at 97,1 million in September, equivalent to penetration of 57 percent.

- CAJ News

Tags nigeria

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