If you follow the Nigerian tech and e commerce space, you would notice that major e commerce companies have been running at a loss and some of them have closed down. Jumia just posted huge losses days ago and Konga has been bought.

A lot of e commerce sites in Nigeria rely strictly on third party vendors. Most of them don't stock their own inventory but totally rely 100 percent on third party merchants, while there is nothing really wrong with this business model, it takes away your ability to control quality and price the two greatest things that will make any business successful.

An iPhone sold on jumia by a third party merchant jumia makes around 700 or 600 naira on one phone sold while the seller makes around 30000 naira meanwhile jumia does the bulk of advertising and still has to do delivery.

A lot of factors could be said to cause the unprofitability of e commerce in Nigeria but my bet goes with over dependence on third party merchants. What do you guys think ?

Cc lalasticala
Ymodulus
Acidosis

tensazangetsu20:
If you follow the Nigerian tech and e commerce space, you would notice that major e commerce companies have been running at a loss and some of them have closed down. Jumia just posted huge losses days ago and Konga has been bought.

A lot of e commerce sites in Nigeria rely strictly on third party vendors. Most of them don't stock their own inventory but totally rely 100 percent on third party merchants, while there is nothing really wrong with this business model, it takes away your ability to control quality and price the two greatest things that will make any business successful.

An iPhone sold on jumia by a third party merchant jumia makes around 700 or 600 naira on one phone sold while the seller makes around 30000 naira meanwhile jumia does the bulk of advertising and still has to do delivery.

A lot of factors could be said to cause the unprofitability of e commerce in Nigeria but my bet goes with over dependence on third party merchants. What do you guys think ?

Cc lalasticala
Ymodulus
Acidosis

I don't think it's really about over dependence on third party merchants. They do have their regulations and terms that is geared towards protecting their business profitability and image.
The Nigerian business environment is terribly harsh in this administration and it is affecting most businesses not just E - commerce business.
Majority of Nigerians do not have enough for their three square meals talkless of risking the little they have buying online. Buying stuffs online has its risks that Nigerians are still cautious of.

Kwenty:

I don't think it's really about over dependence on third party merchants. They do have their regulations and terms that is geared towards protecting their business profitability and image.
The Nigerian business environment is terribly harsh in this administration and it is affecting most businesses not just E - commerce business.
Majority of Nigerians do not have enough for their three square meals talkless of risking the little they have buying online. Buying stuffs online has its risks that Nigerians are still cautious of.

True however even those terms are not protecting their images enough as most nigerians have likened them to fraud and scammers because of over profileration of fake items by the third party merchants.

To me

It's not just the third parties but the platform charges

I don't know if konga still make monthly charges on each store but I think the two main platforms charge too high hence the reason for the high cost of items considering the purchasing power of most Nigerians

The economy is bad..this disnt mean people have stopped buying

Just that their purchasing power has been affected ,hence going for alternatives

But when the alternative s are not good enough or cost as much as *3 of prices obtainable at the local stores

Then the customers prefer taking the stress of buying from local stores

I felt the above was what yudala was trying to solve but failed as they do not have stock of this items


Another big blow is shipping

I see this as a century challenge

The development of the world could steer Nigerians to develope quickly in some of the areas affecting E-commerce like sales of fake product and others but logistics entails a different aspect


Dealing with logistics will be the last nut to crack

are you aware that donald trumpt just accuse jeff of amazon so called billion of defrauding usps united states postal service hiding in the name of amazon .US kept financing under a deal and jeff is bossing up.

the top world eccomerce bosses are smarter than you think. alibaba is worst in china.

pneumaticos:
To me

It's not just the third parties but the platform charges

I don't know if konga still make monthly charges on each store but I think the two main platforms charge too high hence the reason for the high cost of items considering the purchasing power of most Nigerians

The economy is bad..this disnt mean people have stopped buying

Just that their purchasing power has been affected ,hence going for alternatives

But when the alternative s are not good enough or cost as much as *3 of prices obtainable at the local stores

Then the customers prefer taking the stress of buying from local stores

I felt the above was what yudala was trying to solve but failed as they do not have stock of this items


Another big blow is shipping

I see this as a century challenge

The development of the world could steer Nigerians to develope quickly in some of the areas affecting E-commerce like sales of fake product and others but logistics entails a different aspect


Dealing with logistics will be the last nut to crack

So price is another competitive advantage that e commerce businesses in nigeria do not have. That's another interesting perspective.

If you deal

With the three main issues affecting E-commerce in Nigeria

You will sell even in maigano