If you are an eCommerce owner or you just launched your eCommerce business in Nigeria, you will understand that there have been some challenges as to running a successful eCommerce in Nigeria.
During an interview with some eCommerce experts, I noticed that most of them all have similar challenges in common, and if these challenges can be resolved, then the business will thrive. However, whether it will be resolved anytime soon or not, as a business owner, our best approach is still to seek a way of managing and coping with these issues while still being successful in the business.
In this article, I will be talking about the challenges of running an e-commerce business in Nigeria, how it affects both established and start-up businesses.
The eCommerce business is a sector that is fast growing not just in Nigeria but in the world. In Nigeria, we already see the likes of Jumia, Konga, Payporte, Jiji, etc. making waves in the business, but they also face some issues. This is why I will be focusing on the challenges of running an e-commerce business in Nigeria.
If you are considering starting your own eCommerce business in Nigeria, then you may want to read this first and understand all the hassles and challenges the business possesses. The major challenges faced by e-commerce businesses in Nigeria are more generic and so it affects both big and small.
Below are the major challenges:
- Trustor Payment on Delivery
Let’s see the breakdown and more details:
Logistics plays an important role in the life of an eCommerce business owner. In fact, it is the number one thing you need to tackle if you want the get your business right. Starting from product sourcing to handling and shipping down to delivery to your end consumers.
This is the most crucial aspect of the eCommerce business and most people who don’t understand all of this tend to give up at this stage because it may be overwhelming.
When you start sourcing for products, you need to put good logistics in place to ensure that you are getting the right item from the supplier, aside from that, you also need to make sure that the product is safely handled and shipped to you in good condition. If you work with the wrong logistics companies for this, you may end up frustrated because you may either get your items very late or they may arrive totally damaged.
That being said, another aspect of logistics is your local delivery man who you are trusting to help with delivering your items to your buyers. This challenge of logistics has been dragging the eCommerce business in Nigeria, but lots of people are still finding a way to cope. I believe you too can work your way around it now that you know about it.
Trust or Payment on Delivery
The rate of corruption in Nigeria is still on the high side, and it’s not looking like it is decreasing any time soon. As a result of that, the internet space is full of scammers and this has remained a big stumbling block to the success of online business in the country.
This is why trading and buying goods or paying for services online is proven very difficult for some folks. Phishing and scamming have become the norm and this is killing the trust of even those who are willing to trade and make payment online. People are no longer willing to pay outrightly for products online hence the introduction of Cash On Delivery (COD).
Cash on delivery was introduced to help buyers reduce and cut down their losses, however, it is now taking a thorn on sellers which has now created another big challenge for sellers. One of the challenges that sellers face with this is the high rate of returns which will definitely lead to huge losses. This is because you are the one taking care of the shipping fee that is being charged by your logistic company.
If you are strictly asking your customers to pay before they get their product based on trust, you may make some sales but that may not be much because not all customers will want to go for that. On the other hand, if you are using the COD method and want to trust your customers to pay when they receive their products, you will be faced with so many returned items.
This is a big challenge in the eCommerce industry. You are in it for the profit and so anything that makes you spend more than you are making will put you at a loss. As an eCommerce business owner, you need to find a way to balance the equation and also manage the situation.
eCommerce business is a fast-growing sector in the world and lots of countries have already welcomed and adopted the idea making the business easier to operate with more trust.
However, in Nigeria, it is still developing and lots of people are trying to get used to online business. For the business to thrive and make waves in the country, logistics, and trusts have to improve.
Logistics companies have to come up with better ways of handling, processing, and shipping. Plus, these logistics companies should also be able to cover more areas so as to provide a wider reach for businesses.
Also, government agencies need to incorporate policies and infrastructures that will enhance the growth of the sector as the sector is the future of business in the continent.
These policies and infrastructures should be able to eliminate the issue of trust and improve the growth of the business generally.