Nigeria’s e-commerce sector remains “untapped”

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Operators in Nigeria’s e-commerce sector are bemoaning the lack of local investment into their businesses, according to a Financial Vanguard investigation.

According to the report, local investors contribute around 20% of total investment into the country’s e-commerce sector, significantly short of the targeted 60% to grow the e-commerce economy.

Those spoken to during the investigation expressed general concern at a lack of understanding of the sector and an over-cautious approach to start-up investment.

Although the risks are higher and e-commerce ventures generally require a higher capital investment, e-commerce platforms could grow faster than traditional investment areas such as property or oil and gas.

Suleiman Balogun, co-Founder of Nigeria’s letting agency, www.tolet.com., Said “what we have realised is that most Venture Capital firms in this country invest mostly in oil and gas. That needs to change.”

According to the investigation’s findings, Nigeria currently has 120 e-commerce sites, but the majority of them do not receive more than $20,000 of local investment and as such many do not survive the first 12 months of business or fail to break even for longer than expected.

Chiebuka Nworah, founder and CEO of EtyresNigeria.com, an online automobile tyre retailer, concluded “the e-commerce sector in Nigeria is still untapped. We have barely scratched the surface.

There are still lots of niches and services to be filled and made available to Nigerians via the e-commerce sector. The percentage of investment is very low but the signs are encouraging.

There are still numerous opportunities to invest in only if the investors could be discerning enough and look at the bigger picture instead of the short-term gains.”

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