The emergence of big players like Jumia, Konga in 2012 has brought an increased awareness of E-commerce business in Nigeria. And like every new business that comes up in Nigeria, many people have come into the market to get a piece of the action.
Before Jumia and Konga, there were not serious players. The Naspers based company, Kalahari.com.ng was the first major player that entered the market. It lasted less than 2 years before the promoters felt that Nigeria was not yet ready for eCommerce and it closed shop. Unknown to Kalahari.com.ng, it had sparked a light that would create the interest of the likes of Sim Shagaya and the Samwer Brothers and this gave rise to Konga.com and Jumia.com.ng respectively.
Now with the increased awareness, a lot of people have jumped into the market not having the foggiest idea of how to succeed in the market. As at my last count, there are over 100 E-commerce sites in Nigeria all fighting for for space and recognition. I know that more than half of them will not see the end of 2013. This is because most of them do not know what it takes to run a Successful E-commerce Business in Nigeria.
I will list a number of critical things that eCommerce promoters or owners should be aware of to succeed in Nigeria.
- Have a clear vision and goals for your business. This is the first and the most important critical aspect of all businesses; whether online or offline. This is not debatable.
- Know your addressable market. Most people do not have the foggiest idea of the size of the addressable market for their business. You must know the number of Nigerians that have access to the Internet, the number of card holders in Nigeria.
- Have a good marketing plan with the right marketing strategies. How would you draw potential customers to your site and what are the available communication channels? How would you draw people from offline to online way of doing business?
- Choose the right E-commerce platform. If there is one critical success factor that you must be aware of, it is choosing the right ecommerce platform. It must be easy to maintain, and easy to use by the customer. You must also commit constantly improving the user experience. Some of the best Ecommerce companies redesign their sites once or twice a year.
- Have a good Customer Support system. You must be close to your customer. You must also be available to your customer at all times. Understand that being online means you are open 24/7. So you must be able to deal with your customers at all times as your platform is up at all times. You must be available via social media, on phone, email and maybe have a physical address. But you must have defined communication lines open for your customers.
- Have a very good idea of your costs. Know your direct and indirect costs. Know and acknowledge all the costs involved in providing your services. Also apart from knowing them, ascertain how and who will bear the costs so as to make decent profits. Some people have remarked that Jumia's goods are more expensive than the market price. Note that they have also realised that the cost of doing business in Nigeria is very high and the customer would bear part of these costs for them to provide good quality service
- You do not have to be the cheapest. Be affordable. There is a difference between having the cheapest products in town and having the products at affordable prices.
- Delivery must not be entirely free forever. Some people believe that they must have free delivery of their products. Please understand that even though Jumia and Konga started with free delivery, it was for a defined, short period and this has changed now. You can only have free delivery when your purchase is over a certain amount. And this amount is not arbitrarily arrived at, it is scientifically done. So take note.
- Understand Category Management. You must understand your products and how to maximise profitability from choosing the right products and the right amount to stock.
- Managing Inventory. You must determine what you want to stock or source from a vendor/partner. This is because you cannot tie up a lot of money on inventory. So if this is the case, you would have to seek vendors/partners that you would source from when a request is made from a customer. Make sure you set strict quality control measures else you will always meet with the "Out of Stock" syndrome and you will end up apologising to the angry customers who have already paid.
- Have adequate payment options for your customers. Apart from providing the card payment platforms for Interswitch Verve cards, Mastercard, Visa, you must provide bank accounts where your customers can pay into and also though tricky, payment by cash upon delivery. All these payment options have risks; so analyse and use the most suitable ones for your business. For instance, do not assume that since Jumia and Konga provide the option of cash payment upon delivery, you must provide the same. First understand that this option has cash limits and it is not available to all delivery addresses throughout the nation. It will be ill advised to deliver to some locations in Nigeria.
- Remember your competitors. According to Michael Corleone in the famous film, "The Godfather II", Keep your friends close but your enemies closer. You must constantly monitor the activities of your competitors, even when you think you are the best in the industry. Resting on your laurels is dangerous when you are running an online business, because you never know what might happen and which newcomer might sweep underneath you and take some of your business.
If you want more information or want a well defined and detailed eCommerce strategy for the Nigerian market, send me an email at email@example.com.