(For sake of transparency, this text was culled from HelpasClub page on Facebook, happy read). The existing operators are independent storefronts, marketplaces, auctioning sites and social networks. However, even though all these operators use different business models and web technology they all target the same buyer, the online retail customer. Our industry therefore includes but is not limited to e-commerce, P2P/ B2P/P2B business networking, marketplace for local business, job search and contract jobs, carpooling, travel, hotel and other bookings and reservation, cloud computing services to SMES, delivery service networks, business directory/maps, crowdfunding, P2P lending, crowd sourcing, advertising, and marketing, social networking, photo-sharing, messenger, taxi e-hailing, online renting and house sale agency and online ads and content marketing.

(1)    (a)  E Commerce turnover is presently over $35 billion, projected to reach $ 200 billion in 5 years. The Nigerian retail market itself is presently $ 115 billion, with 73% of Nigerians shopping in open air markets and 63% in convenience stores. Some 45% of Nigerians have internet access but only 2% shop online at least once a month.

- This is a growth market, the projections and statistics point to an opportunity for investors in the ecommerce space in the foreseeable future.

(b) There are over 300 firms in the Industry, which has dominant players in each niche. Jumia is dominant retailer with 70% of market share of online retail in 2011, followed by Konga whose popularity has steadily risen. Kaymu leads auctioning site for used items, OLX and Mobofree are also important here; Dealsdey is foremost online discount and deals platform. Marketplace players are Konga marketplace and GT marketplace. Afrocab and Eazytaxy are pioneering taxi e-hailing; Lendico is in online lending.

Same investors follow the pattern of making multiple investment in diverse niches of the industry, operating as internet conglomerates. Reflecting oligopolistic competition, major investors are African Internet Holdings, Naspers and Iroko Partners. Tech incubators play an important role such as as L5lab and CcHub.

- This is a fragmented market, new entrants can penetrate by attending to a niche market and solving unmet needs.

(c) Large capital outlay in the online retailer space, due to logistics and support services. Jumia’s capital outlay was $75 million to start up, reflecting the large capital needed to succeed.Jumia has not turned a profit yet, as it follows the typical internet model of re-investing revenue into the business.Konga, the second biggest player now has foreign investors.

- For well funded ventures this represents a temporary competitive advantage.

(d) There is a low barrier to entry in terms of technology. The operators of e-commerce sites are heavily reliant on cloned websites and business models of successful ventures in the US.

- Entrepreneurs, with access to developers, start-up and operating funds and competent management can replicate and adapt foreign models rather than experiment and build from scratch.

 (e) With e-commerce set grow there is opportunity in the low income consumer segment which is yet to be exploited. Existing middle income market is yet to be fully served, especially outside major sites.

- Entrants that focus on these markets can create a foothold in the industry.

(e)  Challenges facing the industry are slow mobile connection, same day delivery, poor transport infrastructure, reliability and security of transactions over the internet, cash on delivery versus mobile payment; cost of recruiting competent computer engineers.

- Entrants can quickly gain market by addressing these challenges.

There is demand for online order of foreign goods either due quality, availability or price. Buyers go to sites such as eBay or alibaba. Local entrants in this market include ShopAmerica and MallforAfrica.

Here is the link to full text, https://m.facebook.com/pages/Helpasclub/734231933361069?__nodl