While a lot of industries have been disrupted globally by the coronavirus outbreak, the e-commerce market is among the few that is likely to be favored by the pandemic.
Nigeria’s financial institutions are expected to leverage the likely surge in online shopping amid virus outbreak to post higher epayment revenue.
“With the COVID-19 epidemic posing significant concerns and a possible lockdown on activities, online shopping becomes an increasingly attractive option for consumers. Ultimately this leads to increased E- Payments revenue for the banks,”ayorinde Akinloye, a research analyst at CSL stockbrokers said.
Among the electronic channels mostly patronised by Nigerians, Mobile payment and POS recorded some of the highest revenue reported by Nigerian financial institutions in 2019.
According to the data by the Central Bank, the volume of transaction that was done through mobile payment was valued at N5.08 trillion while POS posted N3.2 trillion in the same year.
A recent report by Quantum Metric, a Saas platform provider shows the number of online shoppers increased 8.8 percent since the outbreak of coronavirus and led to a 52 percent surge in online sales as against the value reported a year ago.
The firm analyzed 5.5 billion anonymous and aggregated online and mobile visits to retailer websites from Jan 1 to Feb 29.
Ayo Ibaru, COO /Director – real estate advisory, Northcourt is optimistic that Nigeria’s e-commerce industry will benefit from the virus outbreak.
“E-commerce is expected to grow due to the virus outbreak,” Ibaru said adding that the growth of the e- commerce industry in
Africa’s largest economy will also lead to an increase in the demand for last-mile warehousing.
According to consulting and research firm Technomic, 52 percent of consumers globally are avoiding crowds and 32 percent are leaving their house less often because of coronavirus.
Like other countries around the world, Nigeria is gradually observing a partial lockdown with many of its citizens undergoing selfimposed quarantine.
With 36 confirmed cases and one death on Monday, the Federal Ministry of Health and the Nigeria
Centre for Disease Control (NCDC) have recommended that maintaining social distancing, high hygiene culture through regular washing of hands with soaps and sanitizers and self-isolation as some of the safest measures of preventing the spread of the virus.
As part of measures to curb the spread of Coronavirus, Lagos State government declared two weeks break for civil servants in the state. The executive governor of the state, Babajide Sanwoolu announced this on Sunday.
“I hereby direct that all public officers in the entire unified public service from grade level 1 to 12, which constitutes about 70% of our entire workforce should stay at home from Monday, March 23, 2020, for fourteen days at the first instance,” he said.
The Federal Government also imposed a travel ban on 13 high-risk coronavirus infested countries, the House of Representatives mandated it to ban open worship and other public gatherings until further notice.
Churches and mosques have been advised to lockdown as schools are shut in Lagos and the nine states in the Northwest.
The National Universities Commission (NUC) on Friday ordered the closure of all universities in Nigeria to prevent further spread of coronavirus.
“As part of the measures to contain and prevent the spread of the covid-19 throughout the country, approval has been granted for the closure of all schools,” NUC’S deputy executive secretary Suleiman- Ramon Yusuf said in a circular.
Financial analysts are therefore optimistic that the above measures to contain the spread of the virus will boost demand for online shopping and, thus increase the use of electronic payment.
Meanwhile, before the virus outbreak, Nigeria’s e-commerce industry was described as one on a growth trajectory as Mckinsey projected the size of the market to reach $75billion by 2025, N58 billion higher than the current estimate of over $17billion.
The expansion of the industry is buoyed by the country’s young population coupled with the mobile phone penetration estimated at 89 percent by Global System for Mobile Communications (GSMA).
According to the 2019 data by GSMA, 50 percent of the total 89 percent of mobile phone users in Nigeria have access to the internet.
With broadband of 40 percent Nigeria has about 184.4 million mobile phone subscribers as of December 2019, as compiled from data by Nigerian Communications Commission (NCC).
Nigeria’s growing cashless economy which began in Lagos in 2012 has since improved with digital payment and electronic banking implemented in phases across 27 states of the federation. This is another catalyst responsible for the growth reported by the country’s ecommerce industry, as compiled from industry sources.
Nigeria’s e-commerce industry which has some popular online stores like Jumia, Nigeria’s version of amazon. com, Payporte, Deal Dey, Gloo.ng have also leveraged social media to onboard informal online owners who use Instagram, Facebook and Twitter their means of selling their products.