Thursday 14 March 2019
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BUSINESS DAY
23
Nigeria ranks second in 2018 E-commerce trade Africa David Ibemere
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igeria has been ranked in the 2018 United Nations Conference on Trade and Development (UNCTAD) Businessto-Consumer E-commerce Index ranked ecommerce uptake in Africa, and 75 globally. Leading Africa packs include Mauritius coming first followed by South Africa third, Tunisia, Morocco and Ghana coming in that order. According to the report Nigeria ranks second, largely thanks to a significant increase in postal reliability as measured by the Universal Postal Union (UPU). As Africa’s largest B2C e-commerce market (in terms of both number of shoppers and revenue), reliable delivery of products is critical. However on individuals that owns an ecommerce account Nigeria Globally, Netherlands took the lead having im-
proved from fourth place in 2017. The UNCTAD report further estimates that that the B2C e-commerce market in Africa was worth about $5.7 billion in 2017, which corresponds to less than 0.5 percent of GDP, far below the global average of over 4 percent. However, the uptake of eCommerce in Africa has seen online shoppers surge at an annual rate of 18 percent, which is way above the global rate of 12 percent. “There is no doubt that ecommerce is fast emerging as a new frontier in Africa and in the global market. As eCommerce continues to grow, retailers need to expand their distribution networks, build more fulfilment centres, and leverage more on third-party logistics (3PL) partners. At the same time, online retailers must place greater focus on conveniently locating their fulfilment centres close to their markets to facilitate faster deliveries.” The report further stressed reliable and solid
logistics and supply chain interventions are at the heart of successful ecommerce. This will ensure that the sector thrives and sufficiently satisfies customer demands for availability of goods purchased, timely, safe and secure deliveries exempt from breakages, bends or losses as well as favourable return policies.
On Nigerians online spending habit the report noted that payment still remains cash on delivery, followed by credit and debit card and mobile payment noting that the ecommerce sector is a new frontier in business that calls for close synergies between the ecommerce players and bac- end lo-
gistics to ensure a positive customer experience from that first click to eventual delivery. One of the major challenges for retailers the report call for a solid and long-term partnership between logistics players and ecommerce partnerships which will ensure growth and expansion for both
parties at the end of it all, the e-customer emerges the winner. UNCTAD further called on e-retailers to ensure they build trust with their targeted consumers. “Africa was worth about $ 5.7 billion in 2017, which corresponds to less than 0.5% of GDP, far below the world average of over 4%. hence the need to not only boost Internet penetration to grow e-commerce, but also existing Internet users to trust the online market for making purchases. Unlike developed markets such as the European Union, where 68% of Internet users made an online purchase in 2017, the corresponding figure in Africa was only 13% on average in 2017. “If the ratio of online shoppers to Internet users in the region was increased to 50%, an additional 77 million online shoppers would be added and the estimated B2C revenue (assuming average annual spend was halved) would more than double.
Ruff ‘n’ Tumble loses market share on economic woes BUNMI BAILEY
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sther Ezenwa, 34, mother of three recalls how she visits the top class malls in Lagos to buy clothes for her newborn baby a few years ago, sadly, that has changed as she now visits night market in Berger, a suburb of Lagos to get clothes for her newborn baby. “Things have changed, I cannot afford the new clothes now,” she said. Nigeria’s fragile economic conditions, low purchasing power, and declining incomes have made consumers shift from sub-premium children wears to secondhand wears. According to a 2019 childrenswear report by Euromonitor International, an independent global market research company that provides strategic research services for the consumer markets, Gatimo Nigeria Ltd, through its retail brand, Ruff ‘n’ Tumble, a leading designer, manufacturer and retailer of designer children’s clothing in Nigeria lost the lead within childrenswear
that it had held up until 2018. Euromonitor International’s Childrenswear in Nigeria report offers a comprehensive guide to the size and shape of the market at a national level. “Due to a poor economy and falling incomes, demand has fallen for the subpremium children’s clothing sold by Gatimo Nigeria Ltd, through its retail brand, Ruff ‘n’ Tumble, a leading designer, manufacturer, and retailer of designer children’s
clothing in Nigeria” the report stated. The report further said that brand new children wear through formal retail channels were not considered essential for children in Nigeria due to parents considering that cheaper clothes often second-hand or smuggled are preferable for children as they outgrow clothes quickly. According to the Population figure estimates by Countrymeters based on the
latest United Nations data, at the beginning of 2019, Nigeria’s children population under 15 years old is 81.9 million Gbolahan Ologunro, an equity research analyst at Lagos-based CSL Stockbrokers said that most consumers cannot afford particular brands, they would have to shift to cheaper alternatives and more so if the product is considered as an essential commodity. “So rather than your per-
Analyst: Bunmi Bailey Graphics: Fifen Eyemisanre Famous
ception about the quality, the decision will be influenced more on pricing as oppose to quality and the perception about a particular brand,” Ologunro further said. Also, there are expectations that Mr. Price, a fashion retailer store and Pep, the largest single discount retailer in Africa may perform well in 2019 due to parents generally preferring cheap clothing for their children, except for special occasions and outings. In 2018, these retail brands performed well through their offering of a wide range of affordable but good quality childrenswear and are expected to continue to increase their presence to tap into growing demand among urban consumers and the increasing preference for apparel shopping through modern chains. In addition, the strongly growing population of children and increasing urbanisation is expected to boost demand for childrenswear increases. “Children aged 0-14 is expected to grow by 11 percent over the forecast period, whilst the number of urban households is expect-
ed to increase by 22 percent”. Research conducted by America research company Trend reiterated that Nigeria is the largest kids’ market in Africa and the second-fastest growing market with a forecast of double-digit annual growth through to 2022. Also, the United Nations estimates that 80 percent of Africans wear secondhand clothes. Oxfam says 70 percent of clothes donated globally end up in Africa. Clothing and textiles are collected from donors (firms and charities). They are then sorted, bundled and then shipped to Africa. Vendors purchase these items and sell them at a low price to Africans. The customer base of the secondhand clothing market is usually extremely cost-conscious and often promotes the ideologies of sustainability and environmentalism. Secondhand clothing, after all, is the recycling of used and or unwanted clothing, and this reciprocal buy, sell and trade transaction between the customer and the retailer save an incalculable amount of unwanted clothing from dumps and landfills.