The e-commerce industry is popular all over the world and in many countries, the contribution of e-commerce is significant to the country’s GDP. However, in Nigeria, we have seen this industry struggling because there are major problems in the way of its growth. Today, we will be having a look at some major problems in the way of e-commerce industry in Nigeria:
1. High Cost Of Shipping
The high cost of shipping is a major problem in Nigeria. There are several challenges involved in shipping goods to Nigeria, with the biggest being the value of the Nigerian currency Naira. Because the value of the Naira has been on the falling side in recent years, this makes shipping of goods to Nigeria difficult. Plus, you never know how long it will take a product to ship to Nigeria and there are differences between the costs of shipping companies.
Cybercrimes in Nigeria are on the rise and in the past decade, we have seen an increase in online fraudulent activities in Nigeria. Cybercrimes are one of the major challenges that affect the development of the e-commerce industry in the country. The thing about internet crimes is that these can be carried out anywhere and for this reason, the people of the country are hesitating to make online purchases.
Usually, people have to deal with frauds on the internet who scam them for money without providing anything in return. There are also reported cases in Nigeria where people have been defrauded of their e-wallets. Despite the government trying its best to fight cybercrimes, there are new means of defrauding people introduced every day.
3. Inability To Examine The Products Physically
In a country like Nigeria where cybercrime and online frauds are on the rise, people are reluctant and hesitant to order anything online because of the inability to examine products physically. While shopping on the internet, a customer has to depend on the product description and product images provided by the store.
In other countries of the world, this is not a huge problem because there are minimal chances of any fraud happening but in Nigeria, it is not uncommon to be scammed by an online store and customers don’t even trust online stores with little things like playing cards for games like Spider Solitaire. Therefore, the ability to examine products physically is also becoming a problem for the Nigerian e-commerce industry.
4. Low-Profit Margin
There is also the problem of low-profit margin in the Nigerian e-commerce industry. As we mentioned earlier, the cost of shipping goods to Nigeria is very high and this can take up most of the profits for the manufacturers. Plus, there is also a lack of awareness in the country where people don’t trust online stores and they prefer to buy goods and things in person, rather than ordering something online. This further reduces the profit margin for online stores which then have to suffer great losses.
We had mentioned shipping of goods to Nigeria but along with that, shipping and logistics inside the country are also a great challenge that is limiting e-commerce in Nigeria. In developed countries, you would find every house to have an address of its own but in Nigeria, some houses don’t even have an address.
This makes it difficult for courier and postal services to deliver goods to exact addresses. As a result of all of this, online stores have to devise different methods to ensure the delivery of goods to their customers which increases the costs of goods.
6. Lack Of Online Payment Gateways
In most countries, there are online payment gateways in place that are convenient for both customers and stores. Not for online stores only, but on different online websites, you would find online payment methods even for games like Freecell, Solitaire, Klondike, Pyramid, etc. The customers don’t have to withdraw cash to pay for online goods and the online store gets the money directly in its e-wallets but in Nigeria, this is a problem for most online stores.
In Nigeria, the majority of the users prefer cash on delivery or payment by hand. There is a dire need for the interaction of online payment methods in the Nigerian e-commerce industry so that this industry can reach new heights.
7. Competition With Local Markets
Online stores also have to compete with local stores and markets for the prices of the same goods. The situation becomes difficult when offline local stores and online stores offer the same product for the same price. Because the price of the product is the same on both online and offline stores, people in Nigeria prefer to buy such goods in person, from local markets instead of ordering them online and having to wait for the product to be delivered.
As a result of this, online stores in Nigeria have to offer goods and services at reduced prices to attract buyers. Along with this, they also have to provide occasional discounts to gain the loyalty of customers.