Case Study: m-Commerce in Nigerian Market
Mobile commerce, a terminology used to describe selling the goods and services through mobile devices has become the most popular and powerful drift in e-commerce.
Mobile commerce creates a hassle free environment for the customers to buy goods and services over the mobile platform. They don't need any expensive devices like desktops/computers to shop through online. Because everyone can't afford desktops/computers and also they can't do the shop on the go. Instead of using the expensive devices, the customers can easily afford the mobile devices. Shop through mobile devices can give the better shopping experience to the customers.
Why is m-commerce so important in the Nigeria and what are the factors that you need to consider if you are planning to setup your online business in Nigeria?
No one can deny that Nigeria will lead the way in terms of digital sophistication. With a GDP forecasted to drive from $178 billion in 2012 to $700 billion in 2020, and a population that’s expected to rocket. It can easily predict that Nigeria will have a stand in mobile commerce world, this is definitely where the mobile revolution is taking place.
In Africa, Nigeria is a developing country. According to Financial Times report, Nigeria is able to become one of the most mobile- savvy countries in the world with 140 million mobile subscribers in 2015. Mobile users are growing in a tremendous way. It is a flourishing era of the mobile commerce in Nigeria.
Out of 140 m mobile subscribers, it is estimated that 30% (42 million) of mobile users are smartphone users in the Nigeria and it is continuously increasing.
1. The Smartphone users: For every m-commerce business, the smartphone users are the most impoetant part. Increasing the number of smartphone users will lead to the future of every m-commerce business. In Today's era, the technology is the essential part of every business. Jumia (an eCommerce giant in Nigeria) sold more smartphones in July 2015 as compared to the whole year of 2013.
There are three reasons behind this huge growth in smartphone users.
i) Bringing the prices of the smartphone down substantially and making it accessible to a larger periphery of the Nigerian population. Competition has increased between the mobile retailers. New smartphone retailers have entered the Nigerian market and the smartphone prices have drastically decreased as compared to the prices in 2013. Jumia has sold the average price of the smartphone is 25,000 naira in 2015 as compared to 54,000 nairas in 2013. The new entrant of mobile retailers such as such as Infinix and InnJoo currently selling smartphones as cheap as 10,000 nairas.
ii) The most tech-savvy population is the youth in Nigeria and they represent 66.38% of the total population between the age 0-25 years (2015). The youth section is an important part of the success of mobile industries in the Nigerian market. According to an AT Kearney and Quartz Study released in 2014, Nigeria is 2nd after Brazil in the ultra-connected population ranking, as 66 per cent of Nigerians are online at least once every hour and 20 per cent use the internet at least 10 times a day.
iii) Shopping trend moving from the Web to App: In the Nigeria, Jumia and Kongo are the largest online retailers. The number of app downloads on the Google Play Store are 1 M+ and 0.5 M+ respectively for Jumia and Konga.
Benefits of the App -
a. Easy access to the Web
b. Faster and easy navigation
c. Less data consumed as compared to The Web
d. Instant Push Notifications for deals
Jumia Shopping App is the 8th most downloaded app on Google Play Store in Nigeria after the most popular apps like Whatsapp, Facebook, BBM, Instagram etc. and Jumia and Konga are the 1st & 2nd in the shopping app respectively.
2. Pay on Delivery:- POD is the most popular payment method in Nigeria. Why is it so popular? The simple answer is the TRUST. It is only popular because of a lack of trust in the marketplace. Customers can pay by cash or with a point of sale (POS) on the time of delivery.
Before the arrival of the ‘Pay on Delivery’ model, most eCommerce companies had the bank transfer option or payment through debit/credit cards. These payment options didn’t tackle the trust factor in the Nigerian market. eCommerce services had failed due to this problem in Nigeria in the recent years kasuwa.com (acquired by Jumia) and sabunta.com both provided by Rocket Internet, the big German internet startup incubator (builds and invests in Internet companies) failed due to low consumer interest because of the lack of trust.
The most popular eCommerce giants in Nigeria like Jumia and Konga are using the pay on the delivery method to build the buyers' trust and more than 50% of sales generate through POD payment method. Most of all the online retailer has accepted this payment model to build the customers' trust. The pay on delivery method is the most important and essential part of every eCommerce company in the Nigeria.
In short, it is one of the important factors that no one can ignore to compete in the Nigerian market.
3. Shipping Methods: The most common shipping methods:-
Free Delivery (depends on merchant) etc.
The Pickup Station an initiative by Jumia, is more reliable from the customer point of view. Jumia has introduced the most effective shipping method to target whole the Nigerian market by reducing the shipping cost through Pickup Station. Jumia Pickup Station where customers can choose their nearest pickup station to pick the orders. Customers can go to the nearest pickup station to collect the order. The benefit of this method is that it reduces the shipping cost. The Customers can choose pickup station with POD also and can pay at pickup location by Cash or POS (point of sale). This type of marketing strategy is really needed in the Nigerian market.
4. Digital Divide Vs m-Commerce: The last but not least that how mobile commerce can win in the digital divide country like Nigeria. Nigeria is the digital divide country with the adult (age 15+) literacy rate 51.1 % according to UNICEF in 2008-2012*.
What is the digital divide ? Digital divide means the difference in access to digital devices (computers and smartphones ) in society and internet usage. The Economist (weekly news magazine owned by the Economist Group) published the digital divide issue in its magazine and highlighted the issue on the cover page of the magazine in 2005. Instead of digital divide how the mobile commerce is contributing a great impact on online businesses. Nowadays everyone wants a device or application which can be handled by anyone. Nigeria has a huge problem of the digital divide and also we know that everyone is taking their interest towards the technology.
The introduction of smartphones have provided cheap dial-up connection to the internet and hence helped in tackling the digital divide. The mobile device is the most important part of everyone's daily life and it is the most usable technology that they can easily afford. Here is the mobile commerce come into the picture for every eCommerce businesses. The business strategy needs to be created that how the online retailers can target the digital divide Nigerian customers via the mobile commerce.
The mobile application plays a huge role to create this strategy. From the mobile application, the customers can easily shop on the go using their personal mobile devices. They don't need any laptop or desktop to visit the Web Store. It creates a hassle free environment for them.
If you are having the online store or online marketplace and you want to introduce your business through the mobile commerce then we have the advanced and unique solution - Mobikul Mobile App Builder for your complete business needs.
Thank you for Reading :)