Detailed analysis of the E-commerce sector in Nigeria; market profitability, market opportunities, consumer trends, an analysis of top market leaders, and finally some recommendation on starting a profitable e-commerce business in Nigeria.
There are over 25 e-commerce stores in Nigeria with market size of $17 billion. E-commerce in Nigeria is one of the fastest growing markets in the world with over 255 billion in revenue annually and a rapid growth rate of 25 percent. The industry makes it possible to engage in transactions from different parts of the world giving access to the product from the different market in different places. Also, it is a commercial activity dealing directly with the trading of goods and services and with other related business activities in which the electronic medium plays a crucial role. In addition, e-commerce grows at 25.8 percent in Africa with Nigeria being the fastest growing market in the continent compared to the 16.8 percent in the rest of the world. The e-commerce will continue to grow bigger with about 60 millions of Nigerians now enjoy access to the internet with the population dominated by youthful population. In accessing the opportunities, the rapid growth rate of mobile telecommunications of more than 170 million people, over 300,000 online orders are made every 24 hours.
One of the major if not the major constraint faced by online shopping markets in Nigeria is the increase in fraudulent activities online commonly known as cybercrime. Cybercrime is defined as any criminal activity done through the internet with the intent of defrauding people of their belongings. People have been defrauded of their e-wallets, hijacking phone numbers and use it to offer services illegally among others.
Looking at the competitive landscape, online shopping has to compete with local stores for the prices of goods and services and since most of the online stores often generate profits from delivery costs, in a situation where both offer the same prices there will be no use engaging e-trade.
It will be however recommended that industry should ensure and regulate that all firms should embark on PoD (Pay on Delivery) due to its impact on the number of online shoppers. It was discovered from a study that the majority of users are shopping due to the PoD practice.
In addition, the e-commerce industry should ensure a user-friendly interface while making orders and also a hitch-free delivery to harness consumers’ loyalty and trust.
INDUSTRY AND MARKET DYNAMICS
This involves how a market changes over time to interaction between the supply and demand of online shopping within the e-commerce sector, market or market segment.
E-commerce industry as already identified with a rapid growth rate and a growing market size of $17 billion in 2019 which also indicate a gradual adoption of the online marketplace by consumers. Consequently, Nigeria remains Africa’s largest mobile market with about 162 million subscribers in the continent and a penetration rate of 84 percent. According to the recent report by the National Bureau of Statistics (NBS), it was estimated that the e-commerce sector is expected to contribute about 10 percent (10 trillion naira) to the nation’s Gross Domestic Product (GDP) by 2018. Currently, the population of users is 67,101,452 with the penetration rate of 37.59 percent and GDP per capita of $5.911.
E-commerce is a fast-growing with an annual increase and opportunities to further increase as the rate of internet users increases. Of the identified market drivers includes:
- Third-party logistics
In any organization or industry, the effect of exceptional logistics can never be over-emphasized. Logistics plays a vital role in the creation of visibility in the e-commerce supply chain and determines the overall satisfaction of the customers, efficiency and service delivery. However, it is noteworthy that it requires a lot of expertise and a complex network of several small systems.
- The explosion in mobile internet penetration
As earlier mentioned, the adoption of the latest mobile technologies is playing a big role in the growth of e-commerce. When shopping, the structure must customers friendly and ease of use leading to the growth of the industry.
- Growth of big data
With the increased need to take up emerging challenges, big data analytics has helped to deliver more solutions for which the online shopping platforms are no exemption. Of the major drivers of the industry is the growth of big data which has helped delivered quality solutions in analyzing the target market, delivery solutions exceeding customer’s expectations. Big data analytics help to track the consumer’s online behavior and help consumers determine the needs, tastes and preference of the customers.
- Increased range of payments for unbanked shoppers
There has been high growth of online wallets and cryptocurrencies and other digital currencies that are making it possible to trade without worrying about the exchange rates and country-specific financial issues. The wide spectrum of options has made it easier for people to buy online.
- Payment on Delivery (PoD)
This has been at the forefront of the conversation around why buying and selling online in Nigeria is adopted. According to reports, it shows that a 300 percent increase in orders is a result of PoD. Thus, ensures the consumer’s trust and loyalty of the business. With online voting conducted by Jumia Nigeria, asking the best payment options, more than 67percentt chose to pay on delivery option.
The e-commerce industry in Nigeria is highly connected with the numbers of internet users via mobile phones and other platforms. With the 180 million citizens in Nigeria, more than 60percentt are youthful population owing to the fact that the youth are the most users of online shopping. The industry has had a tremendous impact on business transactions and influenced the economy greatly. With an improved trade activity providing a cost-effective method of connecting producers and merchants directly to customers, e-commerce market thrives. Consequently, the current market size according to a report by the Economist Intelligence Unit, London is around $13 million with an annual growth rate of 25percentt. Also, industry experts reported an estimate of the market size to rise to $50 billion in 10 years.
Majority of internet users are shoppers owning to the report of the National Communication Commission (NCC) that the mobile network coverage is currently estimated at 77percentt. In Nigeria, 89percent of internet users online shoppers while 24percentt are expected to do so in the future.
Some of the identified constraints that the industry might possibly face are as follows:
- Lack of trust: the online shopping platforms had suffered from consumer’s lack of trust coupled with the internet accessibility challenges.
- Cyber crimes: this is one of the major if not the major constraint faced by online shopping markets in Nigeria. This is a result of the increase in fraudulent activities online. Cybercrime is defined as any criminal activity done through the internet with the intent of defrauding people of their belongings. People have been defrauded of their e-wallets, hijacking phone numbers and use it to offer services illegally among others.
- Lack of acceptance: some online stores do not accept or allow transactions from Nigeria based on the antecedents of fraudulent practices creating a bad impression in the mind of customers and the prospective ones.
- Competition: online shopping have to compete with local stores for the prices of goods and services and since most of the online stores often generate profits from delivery costs, in a situation where both offer the same prices there will be no use engaging e-trade.
E-commerce in Nigeria and its potential is a vibrant source of economic growth and development expected to add about 10percentt to the nation’s GDP. Also, it impacts in the Micro, Small and Medium scale enterprises (MSMEs) towards job creation and wealth management can never be over-emphasized. With the increased growth, goods sold and delivered at affordable and competitive prices and sometimes cheaper than offline prices.
The e-commerce will continue to grow bigger with about 60 millions of Nigerians now enjoy access to the internet with a total population dominated by youthful population. In accessing the opportunities, the rapid growth rate of mobile telecommunications of more than 170 million people, there are over 300,000 online orders are made every 24 hours. Others are the ability to reach out to millions of people in different places at a point in time, a huge contribution to the economy, and an unfolding impacts in the consumption patterns in the economy.
How Non-Techies Are Breaking Into Tech Jobs
Image credit: Tasnim Shamma/WABE
Technology startups are at the forefront of innovation. However, while there are plenty of opportunities to influence technological growth, many people lack the necessary training to succeed. This means people need to attend training programs designed to help acquire the skills needed to break into careers in tech. Many college graduates were prepared for jobs that no longer exist or will soon become antiquated.
A 2017 report by McKinsey found that around 50% of current work activities are “technically automatable”. With this in mind, the reason is clear why so many regular people are starting to consider jobs in technology.
Whatever statistic you want to use, one thing is for certain: millions of workers are vulnerable to automation, and many future jobs are in the technology industry.
As automation continues to take hold and disrupt new markets, there are a number of available programs to support people who want to transition into the tech industry. This article will discuss the three main paths being used to support workers in their transition: coding bootcamps, upskilling, and reskilling.
Coding Bootcamps as a Training Method
Coding bootcamps are short-term, intense training programs focusing on employment. Whereas college is focused on teaching a wide range of theoretical knowledge which builds the foundation for a career in Computer Science, coding bootcamps have one specific focus: to help people find jobs in tech.
A recent report on the bootcamp market found that 33,959 people graduated from coding bootcamp in 2019 alone, a 4.38% increase from the previous year.
Coding bootcamps, which have been around for about a decade, have grown in popularity because they promise to help people pursue specific careers in technology.
Bootcamps often position their courses in fields such as Data Sciencea and Web Development, both of which are expected to realize strong growth in the coming decades. Also, bootcamps bundle services such as career support and hiring partnerships together with offerings. These services assist people in their transition from a training program to a job.
Learning New Skills Through Upskilling
Often, a worker will be in a stable field but needs additional training to keep up with technological changes. For instance, a retailer may need to be trained in a few Sales tracking tools, or an Engineer may need to learn a new programming language. This type of training, called upskilling, is an important part of workforce training.
Upskilling refers to when people learn about new technologies to help them stay viable. While a particular job may not be directly affected by automation, new technologies have emerged, allowing employees to be more productive and efficient.
Many companies looking to largely incorporate technology in their business have in-house upskilling initiatives. The Guardian Life Insurance Company, for instance, is training its workforce in new technology like sensors used to improve underwriting and risk management procedures.
Upskilling allows people who work in more traditional roles – like Marketing, Business Development, Sales, and Payroll – gain exposure to new tech ideas, and may act as a springboard to further training opportunities. For instance, a marketer may be trained in how to use SQL to analyze campaign data. Also, after finishing an upskilling program, an employee may decide to commit to pursuing a career in tech, capitalizing on the skills acquired during training.
Reskilling Existing Workers
There is another training option in addition to coding bootcamps and upskilling which has become popular among technical training programs in recent years: reskilling programs. Reskilling programs are initiatives where a business invests in its workers and help build the skills employees need to remain viable.
In contrast to bootcamps, reskilling programs are designed for workers whose job is at risk of automation. An employer will create a training program in a field of growth within their business–the Cloud, for example–and offer some workers the opportunity to retrain in a new field. AT&T, for example, is investing $1 billion in workforce retraining. The telecom giant did so after learning only half of their employees had the skills needed to be protected from automation.
Reskilling programs have grown in popularity because they allow businesses to simply retrain existing employees instead of hiring a new workforce. Often, companies will work with external training providers such as Udacity to design a reskilling program and offer to retrain any employee whose job is likely to soon become obsolete.
Reskilling programs offer dedicated workers an opportunity to stay with a company while being trained for a job in tech. This is an especially worthy proposition for workers who do not want to invest months training beyond work hours. With a reskilling program, a worker can stay with an employer – and earn a paycheck – while being trained in the new skills they need.
Each training method mentioned above has the potential to support people who are breaking into tech from non-technical backgrounds. Upskilling, coding bootcamps, and reskilling options are only three of the many workforce training options being explored. Apprenticeships and education-as-a-benefit, among other programs, are being seen as additional ways for workers to gain new technical skills.
Automation presents a threat to millions of workers, but jobs in techare likely to keep growing and provide job security. But before workers can get a job in tech, they need to find the training, and that’s where coding bootcamps, upskilling, and reskilling have become crucial in the workforce development puzzle.
Blockchain breakthroughs in Africa signal enterprise adoption readiness
Technological breakthroughs such as blockchains and distributed ledger technologies are digital infrastructures that enable innovation. Businesses across the globe are already benefiting from blockchain-based technologies which are predicted to create over $3 trillion in business value by 2030 according to Gartner. Despite the huge potential, CIOs overestimate the capabilities and short-term benefits of blockchain technology to help them meet business objectives which creates unrealistic expectations when it comes to assessing offerings from blockchain platform vendors and service providers.
Companies such as IBM were early adopters of blockchain. “We have used it now to solve issues with the management of our supplier ecosystem and, most recently, we are working to use the technology to improve the way in which we onboard and manage the suppliers we work with (known as the Trust Your Supplier),” said Anthony Butler, IBM’s leader and CTO for blockchain services in Africa and Middle East.
Aligning blockchain projects to fit the overall business strategy of an organisation is key for companies looking to pursue blockchain-based implementations. “We are led by the market and we will build whatever capabilities we need in order to address market demand. We see a lot of companies now wanting to implement blockchain networks at scale so helping them with this, as well as the associated business challenges, is a core part of our strategy. “We are seeing customers who look to us, the general contractor, for convening blockchain networks across different countries, industries, and technologies,” said Butler.
There are also increasing opportunities to create even more value by applying AI and IoT to blockchain networks. This is also an area of focus for companies like IBM. For example, integrating sensors with a blockchain network to gather real time and immutable data on the temperature and conditions under which a product has been transported through a cold chain; or using AI to make predictions based on the data that is sourced via the blockchain network. “There are many emerging cases now and our research organisation is focused on what comes next so we are looking at the implication of quantum or how technologies such as crypto-anchors can be used to further strengthen supply chains with blockchain for example,” Butler explained.
The role of Cloud in implementations of blockchain solutions for African enterprises
African based companies are making blockchain technological implementations. “We completed the Cranberry Cognitive Operational Management Engine which provides the most relevant real-time business service and operational data to the relevant individuals and business units across all service levels of client organisations through interactive dashboards,” said Stin Mulunda, CIO at Cranberry AB. The company has delivered a future-proof business management system which will run optimally 24/7 by leveraging all aspects and elements of data and the environment to ensure an accurate understanding of current realities and how to enhance the future. “We are now able to provide businesses with:
- A single version of the truth through the implementation of smart contracts and the Business Node Consensus Ledger (BNCL);
- Real-time and predictive SLA compliance with bottleneck and business node identification;
- Customer, human resource, provider and operational trend analysis.
The scalability and reduction of total cost of ownership as energy consumption, system upgrades, hardware and software updates as well as infrastructure expert remuneration costs are axed from business expenses upon migration to cloud. The other benefit associated with cloud-based infrastructure is the myriad of software solutions which are compatible with an environment with the option to deploy remotely.
“Agility and service optimisation have become an essential trait for survival for businesses in every sphere of the economy, this has led to the mass adoption of enabling technologies such as artificial intelligence, blockchain and IoT which are all fundamentally cloud-based (distributed infrastructure),” said Mulunda. Cloud platforms such Microsoft Azure, Google Cloud and AWS offer businesses the ability to leverage world-class infrastructure, artificial intelligence capabilities as well as blockchain and IoT solutions.
Cloud, automation, AI, machine learning, blockchain and advanced analytics are just some of the innovations being speedily implemented worldwide to combat business disruption. “The Cranberry Operational Engines’s machine learning and natural language processing algorithms provide organisational correlative analytics on all events, transactions and interactions across all business units and their underlying internal and external resources,” said Mulunda. “The business interaction module harnesses node data to calculate the business proficiency of all business units, individual human resources, and client interactions to provide business leaders a full view of the organization’s performance against set objectives, SLAs and targets at any given time.
This brings the unprecedented possibility to observe and predict current and future organisational efficiency, achievements, profitability, client sentiment, and customer experience by creating a seamless flow of information across internal and external business environments as is the case with a client such as Afrocentric, thereby future-proofing of every aspect of an organisation’s operations.”
“We’re currently in the final phase of the development of our neural analytic dashboards which will harness the Engine’s machine learning capabilities to provide executives with accurate real-time organizational correlative analytics,” Mulunda explained. These dashboards are programmed to analyse the most important/relevant metrics and KPIs to provide summarized intelligence on all events (i.e new customer vs returning customers, human resource punctuality vs revenue vs expenditure per province, store type, etc).
Written by: Heath Muchena, founder of Proudly Associated. Heath works with international companies looking to launch products and services in African markets. He is also the brains behind Block Patrol – a technology adoption and business development startup that pushes the value of advanced tech upstream. He is also the author of 15 books ranging from tech, political economy, business and finance.
Women In Big Data South Africa set to exhibit at AI Expo Africa 2020, amplify women in AI, Data Science
The Women in Big Data South Africa chapter, a forum which seeks to strengthen diversity in analytics and big data, is set to exhibit at AI Expo Africa 2020 Online with chairperson and strategic sourcing and research specialist Naomi Molefe also giving a talk on talent sourcing in artificial intelligence (AI) and Data Science at the show.
The expo which will this year be held as an online event on 3 and 4 September, is the continent’s largest trade-focused AI, Robotic Process Automation (RPA) and Data Science business conference.
Nick Bradshaw, co-founder of AI Media Group organisers of AI Expo Africa, stated “We’ve invited Women in Big Data South Africa to exhibit at this year’s show as part of our drive to make the AI and Data Science community more inclusive and diverse. AI will have direct social, economic and political impacts on our societies as we move into the Fourth Industrial Revolution, as such it is imperative that women be included in this field to avoid gender bias and to come to come up with technologies that progress digital equality”.
“As we celebrate women’s month in South Africa this August, we should have more conversations, not only now — but all year round — on how to attract, encourage and support more women in AI and machine learning research, as well as in the big data and analytics field,” added Bradshaw.
The Women in Big Data Forum’s mission is to inspire and attract more female talent to big data roles and to help them connect, engage and grow. The organisation does this through networking events, professional development and by sharing industry related content with members.
Delegates to AI Expo Africa 2020 ONLINE who are passionate about the meaningful inclusion of women in AI should also visit Fliptin’s virtual booth at the show. The Johannesburg-based venture builder runs the AI in Africa social impact initiative — in partnership with the Kgalema Motlanthe Foundation — which through a series of bootcamps exposes 15-18 year old female learners to AI concepts and ethics, as well as the design thinking process, pitching techniques and building chambers and image classifiers.AI Expo Africa 2020 ONLINE will also feature talks by prominent women working in the field. These include:
- Kay Firth-Butterfield, Head of AI and ML, World Economic Forum
- Renee Cummings, Criminologist and AI Ethicist, Columbia University
- Alison B Lowndes, AI Devrel EMEA, NVIDIA
- Ati Ngubevana, Group Executive HOD: Digital Process Engineering, Vodacom
- Kathryn Malherbe, CEO and founder, MedSol AI Solutions
- Kimara Naicker, PhD Researcher, UKZN Quantum Research Group
- Lebogang Martins, Senior Project Manager, IoT.nxt
- Lenore Kerrigan, Country Director SA, UiPath
- Nella Oluoch, CEO and founder, Keypetbooks
- Phumza Dyani, Chief Marketing and Sales Officer, Broadband Infraco; Chief Innovation Officer, Pan African Chamber of Commerce
- Celina Lee, CEO, Zindi
- Nazareen Ebrahim, AI Researcher, Socially Acceptable
- Minda Marshall, Director, LectorSA
- Vicki – 100% synthetic AI-powered host
Roy Bannister, Director Show Production at AI Expo Africa, stated “Not only do we have a superb line-up of regional and global female thought leaders, we uniquely also have a brand new addition to the show – Vicki.
Vicki is the first 100% synthetic AI-powered host of AI Expo Africa 2020. She is working at the show to introduce the main keynote speaker during the opening sessions of Day 1 and Day 2 of the show.
This technology has come a long way and will be showcased at the event. It’s becoming harder to tell the difference between real humans and synthetic actor, which is both an amazing innovation but also provokes interesting reactions, especially in the era of fake news and deep fakes. She is a testimony to how far this technology has come and we can assure our audience everything she says is true!”