The only thing killing online retail in Nigeria is prevalence of wicked third party merchants which flood the online stores with fake items. Most online stores in Nigeria rely on third party merchants instead of getting their own merchandise. Even amazon that has existed for more than 20 years has just 49 percent third holder seller share. Jumia and Konga relied so much on third party merchants forgetting the kind of country they were in. If you want to run an online retail store in Nigeria, get your items and sell them. India has all of what you have talked about and e commerce thrives there.

Innov8ve1:
The high cost associated with running these ecommerce companies is what is running them down. Dont carry stock, allow your sellers do that for you, let them handle delivery.

Not carrying stock is what is killing them. Most of the third party sellers bring in lots of fake items. Left to me they should cancel third party sellers and sell their own items

GMBuhari:
Online retail has been profitable business but as usual in Nigeria we don't copy everything, these people don't have everything it takes

They had all it takes until May 29 2015 when economy started going bad.

Jumia, in a bid to survive, has flooded the online space with inferior goods being sold by its Chinese merchants called Jumia Global.


This development has further depleted the little trust that Nigerians had in online marketplaces.

Many of us bought highly inferior goods from Jumia Global last year and may never buy anything online again due to that.

MobilityExpress:


Good points! However, Nigeria is a business-killing environment, largely due to government policy somersaults and gymnastics. Even big businesses aren’t exempt and that’s why many big billion-naira businesses in Nigeria fold up after some years. It’s very expensive to run a growing business in Nigeria. Sooner or later the running costs catch up and outgrow the business growth, then the company runs down. Our government needs to do better for the business community. All they know how to do is tax businesses to death

Oh, I'm sure the Nigeria govt is definitely a buisness killer, but, e-commerce failures in Nigeria goes beyond bad govt. If we took a survey here now, most people, as informed as we are, can count on their fingers how many times they really shopped online. Talk less of the less informed ones in the rural areas. @modath captures is quite beautifully up top.... Anyways, at the end of the day, it all these factors we are listing and some more... I hope the experiences can motivate stronger businesses that can beat all the odds

sweetkev:
The country is cursed and nothing good will ever work here

Continue with "this country is cursed and nothing good will ever work here".

We are in it together..

Apparently everything under Buhari folds up. I mean, ask MAN how many of their guys have closed shop since this administration came to power, trust that numskull at the top, he will blame it on looter funds no longer in their businesses.

Online retail is the most lucrative form of business, but the Buhari effect.

They advertise something else and supply another. Why won't they fold up?

modath:
When people throw this matter up for debate,we quickly forget about cultural & psychological differences.....People should separate emotions from this & see it for what it is, Not all those companies have been mismanaged, the business model is alien to the Nigerian mentality..

The fact of the matter is that majority still prefer to "SEE" what they are buying before they part with cash..

How many people shop online? Shops , supermarkets , roadside sellers dot everywhere....

And most important of all, online shopping is a bit more costly & room for haggling/bargaining isn't there.....

They will continue to try but I know for sure I'd rather take a trip to computer village to pick a phone than buy online when I'm not sure I'd get what I ordered & return won't be a nightmare in case it goes south...

Spot on!

postbox:


SOURCE: https://brandspurng.com/the-rise-and-fall-of-online-retail-in-nigeria/

Some of their prices are terribly high,so going to the physical market will be better for such items,they allow sellers to post any price they like.

sweetkev:
The country is cursed and nothing good will ever work here

thats for you and other negative thinkers out here

bootstrap:


Oh, I'm sure the Nigeria govt is definitely a buisness killer, but, e-commerce failures in Nigeria goes beyond bad govt. If we took a survey here now, most people, as informed as we are, can count on their fingers how many times they really shopped online. Talk less of the less informed ones in the rural areas. @mo captures is quite beautifully up top.... Anyways, at the end of the day, it all these factors we are listing and some more... I hope the experiences can motivate stronger businesses that can beat all the odds

I've tried online shopping & it's just not for me... Bought a yam pounding machine that turned out to be a costly dud, didnt work as hyped & the after sales response was a lie.... My spouse bought headphones once that we later found out was just half the price in a store not too far away....
Online shopping is cheaper abroad cos of less wages to be paid, in naija reverse is the case...

I use online stores for price guide/evaluation... I'd always prefer to enter shop or market & make my purchase.

jayson87:
Apparently everything under Buhari folds up. I mean, ask MAN how many of their guys have closed shop since this administration came to power, trust that numskull at the top, he will blame it on looter funds no longer in their businesses.

Online retail is the most lucrative form of business, but the Buhari effect.

their is no big grammar or analysis why these online merchants fold up,, online business thrive solely on trust ,, chasing profit @ the expense of goodwill/reputation is just like chasing two rats ..not to mention the inflated price,, discount upon lies
i shopped online twice,, what you see online is not what you get,, what they ship to you is inferior or fake items which are not refundable . trust nigerians you can only scam us once ... we forget everything but not service disssatisfaction.
these is not buhari effect ,,shop online today n see if you will shop next time.... its profit over reputation effect

When business is sold, it does not mean they were not making profit. Announcing a lost has been one of the few strategies that venture capitalists who want to make massive profits at shortest possible time use to sell out the company, clean the books up without paying taxes.

Unlike Yahoo Yahoo, the thoroughly trained minds in businesses of this nature knows that if you must get off the government tax handcuffs, then you must declare bankruptcy of the company even though the company is doing well. Cos if you declare profit during the sales, you will pay huge after sales tax but to declare bankcrupty, you are not only covering your asss for cooking the previous books, but you also get tax rebates and do not even have to pay taxes in the next several years as new buyers.

Sometimes it is just change of names; Cash out, sell the structures to another set of your foreign partners and the fraud continues. Etisalat, now 9Mobile has been used as a special purpose vehicle of these schemes many times and people still believe their stories.

Nigeria has been profitable to Konga and Jumia, but they could cash out some billions if they are declared bankrupt and share the liability of the credit facilities with new friendly partners while pocketing chunks of the money.

This is the type of Yahoo Yahoo Nigerians need to learn.

Nigeria is just a heaven for these high level fraud because we have no government, no consumer protection mechanisms, no products and pricing controls, I mean, I do not see how any 'world class intellect' can not be a billionaire in this country.

One must go beyond common-sense to understand that these sales are fraudulent schemes to enrich the few guys with brains who pull these stunts.

In Nigeria, we haggle for everything, ashawo seff, we will haggle. How is it possible to haggle for a service or goods you can't see physically. I have mentioned this issue before on this forum, the principle of online business is based on integrity and a robust delivery service. I am not saying it because I want to be argumentative, I have been on eBay for over 10 years now.

hisgrace090:
Too bad.

Nigerians and wayo!

It gets to a time where.olx Nigerian traders are almost 75% scarmers.

They flooded olx with prices like,
2010 Toyota venza @500.000.00.naira.
Samsung galaxy note8 London use, @35000.00.

That was when last I visited olx knowing fully well that scarmers have taken over.

and was also hijacked by fake job advertisers

ericsmith:



their is no big grammar or analysis why these online merchants fold up,, online business thrive solely on trust ,, chasing profit @ the expense of goodwill/reputation is just like chasing two rats ..not to mention the inflated price,, discount upon lies
i shopped online twice,, what you see online is not what you get,, what they ship to you is inferior or fake items which are not refundable . trust nigerians you can only scam us once ... we forget everything but not service disssatisfaction.
these is not buhari effect ,,shop online today n see if you will shop next time.... its profit over reputation effect

Good one Eric, you nailed it. You reminded me of my experience with Jumia 5 years ago, after paying and waiting for my order for months, Jumia kept posting me my order will be delivered at a tommorrow that never came. I called to cancel the order and was offered a voucher in place of my money (refund). To my utter disgust, I used the voucher in buying something else that was more or less a want to me, you won't believe after 2 weeks these order never came, days later i got a call from one of their reps asking me if i would like to retake the my first order which supposedly has been cancelled.... My response was get the heck out of my phone and return my money. 3 days later my second order came.

austin2all:
Split this zoo and watch as things take shape with immediate effect.
the zoo is a badluck.

split it into how many pieces?
What would be the ethnic or cultural composition of each piece?
How homogenous is your proposed split components?

We should take into consideration the kind of people Nigerians are. Issues such as card frauds, expected delivery vs actual delivery, murdering sales people just to mention a few contributed to the problem of e-retailing in Nigeria.
You can imagine when a delivery man gets killed by the person he's to deliver to just because of iPhone that is susceptible to upgrades and new models.

[quote author=jayson87 post=64993822]Good one Eric, you nailed it. You reminded me of my experience with Jumia 5 years ago, after paying and waiting for my order for months, Jumia kept posting me my order will be delivered at a tommorrow that never came. I called to cancel the order and was offered a voucher in place of my money (refund). To my utter disgust, I used the voucher in buying something else that was more or less a want to me, you won't believe after 2 weeks these order never came, days later i got a call from one of their reps asking me if i would like to retake the my first order which supposedly has been cancelled.... My response was get the heck out of my phone and return my money. 3 days later my second order ..

customer satisfaction is paramount ,,

jayson87:
Good one Eric, you nailed it. You reminded me of my experience with Jumia 5 years ago, after paying and waiting for my order for months, Jumia kept posting me my order will be delivered at a tommorrow that never came. I called to cancel the order and was offered a voucher in place of my money (refund). To my utter disgust, I used the voucher in buying something else that was more or less a want to me, you won't believe after 2 weeks these order never came, days later i got a call from one of their reps asking me if i would like to retake the my first order which supposedly has been cancelled.... My response was get the heck out of my phone and return my money. 3 days later my second order came.

most of these business chase profit 100% forgetting trust secures customers loyalty ,,loyalty generate continuous patronage ,, dear sme ceos you cannt have continuous patronage over time without making ur desired profit !! walahai
i say loyalty evangelizes n generate more customers !!

modath:
When people throw this matter up for debate,we quickly forget about cultural & psychological differences.....People should separate emotions from this & see it for what it is, Not all those companies have been mismanaged, the business model is alien to the Nigerian mentality..

The fact of the matter is that majority still prefer to "SEE" what they are buying before they part with cash..

How many people shop online? Shops , supermarkets , roadside sellers dot everywhere....

And most important of all, online shopping is a bit more costly & room for haggling/bargaining isn't there.....

They will continue to try but I know for sure I'd rather take a trip to computer village to pick a phone than buy online when I'm not sure I'd get what I ordered & return won't be a nightmare in case it goes south...

My thoughts exactly..I had the same argument with a friend who wanted to get into the e-commerce market. I warned him not to try it because fundamentally most Nigerians prefer to see and feel what they are buying and then negotiate well before parting with their cash which is not obtainable online.

tensazangetsu20:
The only thing killing online retail in Nigeria is prevalence of wicked third party merchants which flood the online stores with fake items. Most online stores in Nigeria rely on third party merchants instead of getting their own merchandise. Even amazon that has existed for more than 20 years has just 49 percent third holder seller share. Jumia and Konga relied so much on third party merchants forgetting the kind of country they were in. If you want to run an online retail store in Nigeria, get your items and sell them. India has all of what you have talked about and e commerce thrives there.

Fake items are the major issue as you have rightly mentioned. It is seriously discouraging me from placing orders online.

Billyonaire:
When business is sold, it does not mean they were not making profit. Announcing a lost has been one of the few strategies that venture capitalists who want to make massive profits at shortest possible time use to sell out the company, clean the books up without paying taxes.

Unlike Yahoo Yahoo, the thoroughly trained minds in businesses of this nature knows that if you must get off the government tax handcuffs, then you must declare bankruptcy of the company even though the company is doing well. Cos if you declare profit during the sales, you will pay huge after sales tax but to declare bankcrupty, you are not only covering your asss for cooking the previous books, but you also get tax rebates and do not even have to pay taxes in the next several years as new buyers.

Sometimes it is just change of names; Cash out, sell the structures to another set of your foreign partners and the fraud continues. Econet, now 9Mobile has been used as a special purpose vehicle of these schemes many times and people still believe their stories.

Nigeria has been profitable to Konga and Jumia, but they could cash out some billions if they are declared bankrupt and share the liability of the credit facilities with new friendly partners while pocketing chunks of the money.

This is the type of Yahoo Yahoo Nigerians need to learn.

Nigeria is just a heaven for these high level fraud because we have no government, no consumer protection mechanisms, no products and pricing controls, I mean, I do not see how any 'world class intellect' can not be a billionaire in this country.

One must go beyond common-sense to understand that these sales are fraudulent schemes to enrich the few guys with brains who pull these stunts.

Econet is not 9mobile... It's Airtel, Etisalat is 9mobile

dvdami:
Jumia, in a bid to survive, has flooded the online space with inferior goods being sold by its Chinese merchants called Jumia Global.


This development has further depleted the little trust that Nigerians had in online marketplaces.

Many of us bought highly inferior goods from Jumia Global last year and may never buy anything online again due to that.

well said, however, this can happen when you don't have someone who can give you firsthand info about any item you are ordering from Jumia, it is not supposed to be so though, but that is the situation of things.

chijokz:

My thoughts exactly..I had the same argument with a friend who wanted to get into the e-commerce market. I warned him not to try it because fundamentally most Nigerians prefer to see and feel what they are buying and then negotiate well before parting with their cash which is not obtainable online.

I know i usually face this issue with the customer, but most willnot understand that these physical market you are talking about are still selling items from online stores.

modath:
When people throw this matter up for debate,we quickly forget about cultural & psychological differences.....People should separate emotions from this & see it for what it is, Not all those companies have been mismanaged, the business model is alien to the Nigerian mentality..

The fact of the matter is that majority still prefer to "SEE" what they are buying before they part with cash..

How many people shop online? Shops , supermarkets , roadside sellers dot everywhere....

And most important of all, online shopping is a bit more costly & room for haggling/bargaining isn't there.....

They will continue to try but I know for sure I'd rather take a trip to computer village to pick a phone than buy online when I'm not sure I'd get what I ordered & return won't be a nightmare in case it goes south...

You have made clever points. The first and the only time I ordered goods on JUMIA (A tecno labeled power bank. #4,400 including delivery charges). It couldn't even charge my 1500 mah battery to 100% whereas a #2000 roadside FIL power charge it to 100% twice
Now why should I keep patronizing them when there is no return policy even when I complained to their customer care and rated the service 1 over 5?

Companies that survive in Nigeria, are businesses that are able to obtain humongous loans from banks without any plan to pay back, my 2 kobos!

tensazangetsu20:
The only thing killing online retail in Nigeria is prevalence of wicked third party merchants which flood the online stores with fake items. Most online stores in Nigeria rely on third party merchants instead of getting their own merchandise. Even amazon that has existed for more than 20 years has just 49 percent third holder seller share. Jumia and Konga relied so much on third party merchants forgetting the kind of country they were in. If you want to run an online retail store in Nigeria, get your items and sell them. India has all of what you have talked about and e commerce thrives there.

,

There is nothing wrong with Jumia or Konga business philosophy, this has been successfully applied by companies such as uber and taxify in the transportation sector.

well there are ways you can utilize such platforms like jumia to make money http://www.wikizino.com.ng/2017/10/how-to-make-money-on-jumia.html

Trust is the backbone of online stores and secure payment systems.

When a good % of your processed payments return null or fraudulent transactions, the international community eventually ejects you or restricts you on it's platforms.

So when we cry about yahoo boys, it's not just what they do to single, lonely white women abroad or their African Prince scams, it's how they rip Nigerian Citizens too. It's a menace we must fight to a standstill. Right now they've included human sacrifice to their heinous crimes.

TheAlchemist:
,

There is nothing wrong with Jumia or Konga business philosophy, this has been successfully applied by companies such as uber and taxify in the transportation sector.

There's nothing but it won't work in a country like Nigeria and besides getting third party merchants aoine will really reduce your profits. Uber is yet to turn in a profit mind you and that's why they are investing heavily in driverless cars technology.