Among the focus group, 82% are between 18 – 25, primarily Gen Z consumers with broad access to the internet. 10% is between 26 – 35 years, while the remaining 8% is between 35 – 45 years. On how skillful they are at using the internet, 47.4% explain that they are casual users, 36.8% claim to be expert users, while 15.8% say they are basic.
On whether they preferred online to offline shopping, 73.7% claimed that they preferred offline shopping while 26.3% selected online shopping. Just like every other country, young Nigerians are most likely to spend online. So, while it is understandable that the older customers would still be reluctant, an overwhelming majority (76%) of the Gen Z consumers in the group explained that they still preferred offline shopping, as they indicated issues with accessibility, credit card scam, brand trust, and data security.
While convenience was an essential factor to those who preferred online shopping, comments by those who preferred conducting their shopping offline include “Because I can see what I want to buy”; “Most online stuff are fake”; “I prefer to buy offline so I can confirm the quality and be able to price”; “I enjoy window shopping online a lot, but offline shopping ensures that I do not get any unpleasant surprises”; “Most times, it is not what you ordered that you get”.
Even with the low popularity of credit cards and digital payments, e-commerce has grown significantly in Nigeria, especially between 2018 and 2019. Online food retail and personal care rose by 50%, whereas the fashion and beauty sector experienced an increase of over 40%. The most valuable e-commerce sector in Nigeria was travel and accommodation, which achieved $3.2 billion in consumer spending. However, the age-long problems facing e-commerce in Nigeria, including logistics and delivery issues, have persisted. Even with the large population, the need for e-commerce appears not to be strong enough, income inequality, brand awareness, and education makes the target market too small, and there are high service delivery frictions.
“We are a country where about 87% is poor, making us the poorest country in the world,” said an expert. “The country also has a middle class that is rapidly falling back down the economic ladder, and millions are slipping into poverty. The potential in the huge population exists when more consumers have more money to spend and have the means to go online to sort through thousands of products to buy what they need. In this case, the consumer will also have to deal with late or false deliveries, or the fear of providing information that cybercriminals can use. At that point, almost everyone wants to avoid the headache”.
“Logistics remains a major challenge for Nigeria’s e-commerce customer,” said another expert. “It is an online trend for customers to always post images with ‘What I ordered vs What I got’ on social media. More than anything, that perceived lack of certainty or trust in the market, especially for a new customer, will affect the market. Besides, the insecurity associated with online transactions is also a major hindrance among businesses and customers. To improve the market, payment providers have to educate customers while providing insurance to Nigerians. Moreover, e-commerce firms in Nigeria have sometimes perpetuated the trust deficit by showing a total disregard for product quality and customer service.
The signs are apparent – the future of the Nigerian market is online. With sustainable economic growth and an increase in consumers’ purchasing power, the act of shopping will continue to transition. The effects of e-commerce already appear in customer service to new product design. But while the evidence reveals that many more Nigerians can willfully engage in e-commerce transactions, improved awareness and security remains paramount to business survival in the sector.