Nigeria is home to leading ecommerce companies in Africa. Jumia, barely seven years old, became Africa’s first ever tech company to sell its shares on the New York Stock Exchange in 2019, raking in a whopping $200m. Aiming higher than Jumia, with a difference, is new ecommerce platform, Main Market Online, recently founded by Cyriacus Nwankwo, who has had years of experience running ecommerce businesses. Since its launch barely a year ago, the startup has served customers from Nigeria, US, the UK, Australia, the rest of Africa and Asia.
“There’s a major inclusion problem currently affecting the growth of ecommerce in Nigeria,” Cyriacus said. “The very situation that prevents merchants from certain parts of the country from taking part in an industry with proven potential is an impediment to growth.”
Disrupting Brick-and-Mortar Retailing In Other Nigerian Cities With Stronger Ecommerce Presence
According to Q3, 2019 report released by Jumia, active customers on its e-commerce platform jumped 56 percent to 5.5 million in the third quarter of 2019 from 3.5 million over the same period a year ago, as orders nearly doubled to 7 million. Jumia’s closest competitor, Konga in 2016 reported less than 200,000 active customers. Put conservatively, the total number of ecommerce customers in Nigeria may still be below 10 million.
This is a far cry from available data about Nigeria, a country with over 200 million people. Of this number, about 126 million people, representing 61% of the population have access to the internet — the sixth largest in the world.
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However, despite this apparent large number of internet users in the west African country, it is noteworthy that the country’s internet population varies from state to state.
For instance, even though Lagos is the most populated city in Nigeria with estimated population of around 21 million, and holding about 15.2% of the country’s entire internet population (over 14m subscribers), the rest of the country accounts for more than 84% of the internet population.
Lagos’ neighboring state Ogun, with over 5m (6.3%) of active internet subscribers in Nigeria in Q3 2017 is the second state with the highest rate of internet penetration in Nigeria. This is followed by Oyo, FCT, Kano, Kaduna, Rivers, Edo, Delta, and Niger states, all 10 states accounting for more than 54.9% of the internet subscriber base in the country as of Q3 of 2017.
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These figures are very important because, even though Jumia leads the e-retail shops in Nigeria by far, logistics and by extension, geographical spread remain its greatest challenge. A majority of the company’s warehouses are located around the Lagos city axis, and it takes at least two weeks to make standard deliveries to other Nigerian cities, a major turn off for consumers wanting quicker deliveries and better ecommerce experience.
Jumia’s situation is even worsened by the fact that a majority of the company’s online shoppers are located in Lagos, which holds about 10.5% of Nigeria’s population — that is, the rest of the country’s over 200 million people could be found elsewhere in the country apart from Lagos.
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For one thing, the implication of these is that many people in Nigeria are still shut out from the whole internet commerce experience. And for another, these data provide an insight into what it would look like to conquer Nigeria’s ecommerce market as a whole, and not in bits. This is a playbook Main Market Online is aiming to adopt.
“Take for instance, the merchants based in the Southeastern part of Nigeria, despite having the engine block of commerce in their DNA, and one of the largest markets in West Africa, do not have enough access to the digital commerce ecosystem,” Cyriacus said. “An average trader here brings in tonnes of goods annually and is patronized by people from as far away as Nigeria’s neighbouring countries including Ghana, South Africa,Cameroun, and Benin Republic.”
“The market, at its peak, receives over 6 million visits and more than 10 million transactions on a daily basis, and it is estimated to have more than 3 billion dollars in annual turnover. Despite these glaring facts, these traders remain largely excluded from Nigeria’s e-commerce landscape. The pioneer players of Nigeria’s ecommerce industry are simply not doing enough. Their current business models do not accommodate merchants in other regions in Nigeria outside their primary areas of operation,” he said.
Enter Main Market Online, The Bridge That Links The Divides
According to Cyriacus, the Main Market Online solution, apart from reaching previously neglected markets in Nigeria, does not also believe in “the more you look, the less you see” approach to product marketing used by ecommerce companies in Nigeria.
“You look around you and you’re seeing what others aren’t seeing,” he said. “The competition is all centred in certain parts of Nigeria leaving behind other parts of the country. We intend to fill in the void.”
“Also, by building trust and resilience in our supply chain and ensuring safety of transactions between buyers and sellers, we intend to resolve the problem currently plaguing the industry,” he added.
So far, the startup maintains one of its offices in Onitsha, a city in southeastern Nigeria, noted for its booming commercial activities, and has registered growing number of paying customers and merchants from virtually across all the continents.
Although the future of ecommerce in Nigeria remains bright, Cyriacus however noted the current problems plaguing the sector in the country based on his experience so far.
“E-commerce is nothing without logistics, but there’s this canker worm that has served to further worsen the situation,” he said. “An average Nigerian today wants a pay-on-delivery service despite getting the full assurance that goods paid for would be delivered. It’s one of the bottle necks in the industry.”
The Next Chapter
Cyriacus said adequate capitalization remains one of the greatest challenges facing startups in Africa and Main Market Online is not an exception. For prospective investors, he said the Main Market Online proposition is clear and straightforward.
“The market is rich and the opportunities are enormous. It’s just about the right funding and a little leap to grab it!” He said.
“Our business thrives on low cost operations without compromising quality,” he further said. “This is achieved by letting go of product warehousing and having our merchants keep them in the traditional sense while making the right packaging and shipping options best suited, to offer the best and fastest deliveries to our customers. Every customer wants timely and quality product delivery. This will always be our philosophy at Main Market Online.”
“Resilience and perseverance are key for startup success”
For Cyriacus, resilience and perseverance are key for startup success.
“When you set out to work on your idea, after careful research and considerations, think first of your staying power without any significant external aids,” he said. “Your ability to stay long enough will greatly increase your chances of success.”
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Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer