Special Report: How COVID-19 Boosts e-Commerce in Nigeria Small Business

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The outbreak of COVID-19 pandemic brought a huge change to the social order including how businesses are conducted. In this Special Report supported by Open Society Initiative for West Africa (OSIWA), MAWA Foundation examined how the COVID-19 pandemic led to small businesses in Nigeria embracing e-commerce that is rapidly changing the old order.  

The pandemic has affected social order, forcing humans to adopt the use of Zoom as alternatives for social gatherings such as meetings, weddings, birthdays, and many other kinds of celebrations.

E-commerce began to rise across Nigerian communities during the lockdown that made visiting shops, markets, and offices difficult and in some cases impossible, forcing businesses and consumers to embrace online transaction, providing and purchasing goods and services, and that raised e-commerce’s share of universal retail trade from 14 percent in 2019 to about 17 percent in 2020.

Although Nigeria doesn’t have a dominant e-wallet across communities, the COVID-19 pandemic contributed hugely to the rise and acceptance of e-commerce which afforded business owners and service providers to connect to customers. 

Many business owners in Nigeria that have digital literary, during the COVID-19 lockdown, moved their businesses online where they now connect with wider customers and carry out transactions and are making huge profits.

In this Special Report, MAWA FOUNDATION deliberately omitted e-commerce giants such as Jumia, Jiji, and Konga and chose to interview individuals that conduct small businesses online, to gauge the impact of COVID-19 on e-commerce. And, using this approach, our findings show that the pandemic has triggered a boost in e-commerce.

In interviews conducted by MAWA FOUNDATION, many of the persons spoken to said they relied on Facebook, Twitter, Instagram, and WhatsApp to carry out their business starting from the time of COVID-19. At about 39 persons interviewed, 30 say Facebook and Twitter are the best platforms for e-commerce.

Mr. Charles Afam, who owns a big boutique shop in the New Karu area of Nasarawa State, while speaking to MAWA FOUNDATION, narrated how he moved his business online during the COVID-19 lockdown. He, however, disclosed that it proved difficult at the beginning because of the issue of trust, but say his customers started buying from him when he showed them he is genuine and trustworthy.

“Before COVID-19, I relied mainly on customers coming to my shop and buy from me, but during the lockdown, I moved my business online, and since then, I have been reaching huge customers and making huge profits”

“As soon as I get new product, I display them on Twitter and Facebook, people contact me if they like any, and they pay, I send the product to them”

“Moving businesses online is very profitable, you do not have to worry about paying for a shop space where you will display your products, the only thing required is being trustworthy and delivering quality products displayed online to customers when they make payments”, Afam said.

Miss Ruth Ekor, while speaking to MAWA in an interview at her Masaka residence, said she has moved her car sale business online, a decision she took during the COVID-19 lockdown that made it impossible for her to sell a single car. She narrated how it is more profitable to sell online compared to putting cars in parks waiting for buyers.

“Before I took my business online, I found it difficult selling a car the whole month, but since COVID-19 forced me to embrace online sale, I now reach many customers and sell up to three cars a week, sincerely, taking my business online was the best decision  I ever made,” Ekor said.

“No doubt, COVID-19 pandemic has brought huge expansion to online businesses; there are lots of challenges that must be addressed. For instance, a good number of persons have been scammed online, monies paid not delivered because of poor online transaction facilities,” she added.

Mr. Raphael Ogbu, a commercial taxi driver, told MAWA how he is leveraging an online platform to provide services to his customers. He disclosed that many of his customers connected with him via Twitter and Facebook when he moved his business online as soon as lockdown began.

“A good number of commercial drivers have moved their business online, many of us are not in Uber or Bolt, we just use our Twitter and Facebook to market our services and many have found us there while we are rendering quality services to them”, Ogbu said.

At about 10 persons interviewed by MAWA at Keffi, New Karu, Masaka and New Nyanya who are private properties dealers say e-commerce provides them a platform for an effective business transaction. They pointed out that taking their business online makes it easier for them to connect with buyers.

Mr. James Akpan, who said he deals with land and real estate, told the MAWA team that the online platform has become the most effective place to reach out to prospective buyers. He, however, pointed out that his knowledge of online transactions became broadened and sophisticated during the COVID-19 lockdown which came as an alternative means for survival during the period.

Miss. Rose Adebo, while granting an interview to the MAWA team in her Karu residence, narrated how she moved her catering business to an online food vendor during the COVID-19 lockdown. She, however, said since she moved her business online, she makes three times more profit compared to what she made while offline.

She explained that her customers reach out to her by ordering food online using Facebook and Twitter. She added that some who have her telephone number call her to place an order, while she delivers the order to them in their respective homes.

Adebo disclosed that considering the huge profit she is making selling food online, she is working to set up an e-commerce website where she can transact her business more professionally.

“I can tell you that COVID-19 impact that brought a boost in the online business is beneficial to anyone who is taking the advantage. Today, I make a huge profit selling food online” Adebo told MAWA.

MAWA FOUNDATION found that many of the local businesses that have moved online during COVID-19 are now selling and making profits twice more than their income when offline. For example, Jumia during the lockdown moved to 50 percent sale during the first six months of 2020.

The current trend of upward e-commerce acceptance is likely to be sustained among Nigeria’s growing population. However, there are barriers that will stop many persons in Nigeria from taking the opportunities it brings. Some of them are costly broadband services, lack of consumers’ trust, and poor digital skills among small business owners across many communities. 

The upward trend of e-commerce acceptance sparked by the COVID-19 lockdown presents the Nigerian state an opportunity to harness the potential and places her to take advantage and stand tall in the digital economy.

E-commerce Challenges and Legal Issues

The COVID-19 brought a huge twist to e-commerce in Nigeria with many of the citizens embracing it as the new normal. However, prior to the COVID-19 pandemic, as far back as 2011, the country was reported to have spent N62billion in online purchases. Also, in 2017, professionals in the Nigerian financial service sector put the country’s e-commerce market worth to move to over $50billion (N15.45trillion) in no distant time.

As e-commerce continues to rise in Nigeria, there is a need for a unified legal regulatory framework.  Although there are laws that try to address businesses and cyber dealings in Nigeria, at the moment, there is no singular law that holistically takes care of e-commerce regulation in the country. 

Nigerian Consumer Protection Council Act, 1992 Cap C25 Laws of the Federation 2004, Evidence Act 2011, and Cybercrimes (Prohibition, Prevention Act 2015 are some of the legislations that attempt to regulate e-commerce operations in Nigeria.

From the spark on the e-commerce during the COVID-19 lockdown, the platform has come to stay, and, good as it is, the Nigerian state must put in place a legal and policy framework, make available internet accessible and cheap across communities. The country must also begin the process of digital literacy among the citizens, with huge investments made to teach the populace at both formal and informal levels that will enable them to cope with the current realities. 

In that way, the challenges facing e-commerce in the country will be reduced to the barest minimum, and the country properly positioned to play a dominant role in the emerging digital economy.

This report is supported by the Open Society Initiative for West Africa OSIWA

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