• Monday, July 15, 2024
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Small businesses manage to survive COVID thanks to e-commerce

Small businesses manage to survive COVID thanks to e-commerce

The COVID-19 pandemic may have dislodged several businesses, but for some small businesses, it was an opportunity to reinvent and stand on the shoulders of e-commerce, a business model that lets firms and individuals buy and sell things over the internet. Some businesses also introduced products specific to the needs of people during COVID.

Despite the pummeling of many businesses following the rapid spread of coronavirus last year and lockdowns that restricted movement of people, some small businesses were able to stay afloat by turning online to meet and transact with their customers. Businesses that quickly realised the importance and opportunities in the technological space by pushing their products online were able to maintain some form of revenue stream.

Wole Akeju, executive director, RedBox Deluxe Cafe by Diddies Grill, a company that provides luxury finger foods, said the company has seen up to 45 percent increase in sales since Covid.

“E-commerce provides the platform where people can find food and other things, which is why we do a lot of online campaigns via YouTube, Facebook, Instagram and other social media platforms. It has helped us in our branding, offering sales and introduction of new menus,” he said.

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Tolu Craig, founder and business lead at PTwebs, a digital solutions firm, said as a website designer, he noticed a 30-40 percent increase in the demand for his services.

“During the lockdown, there was a lot of pressure on me from business owners to set up their businesses online because they have seen that this is the right time to push their products online so that they can reach people. Also, people have now appreciated working from home than ever before,” Craig said.

Last year, a Mastercard study on consumer spending revealed that over 81 percent of consumers in Nigeria were shopping more online since the onset of the pandemic with purchases for mobile data, apparel, beauty products and Fast-Moving Consumer Goods recording the highest surge of online activity.

Vanessa Onuwughalu, CEO of Taos Beauty brand, said to stay afloat, the company had to introduce beauty products that would not be easily smeared by face masks and did more via social media to push the products.

“Through our social media platforms, we did more advertising, sales, reduced prices of products, package deals and introduced more products that people are more likely to use during their Zoom meetings and lipsticks colours that will not strain the mask,” Onuwughalu said.

For Cheng Fuller, a retail expert, however, E-commerce is an approach for expanding sales footprint, not just a response to the pandemic. The pandemic further drove the increasing trend of the erosion in market share of the non-formal markets, he said.

“I hardly interact with my customers since most of them send their measurements online via WhatsApp. The only contact I have with them is (probably) when meeting for the first time to exchange numbers,” said Damilola Otufodunrin, creative director for DAMSCO, a men’s wear brand.

“In a way, it has helped to drive online sales for me. About 70 percent increase,” according to Otufodunrin, who said that 90 percent of his work is done online as most of his customers prefer to do everything online down to the delivery.

Before the pandemic fast-tracked the growth of E-commerce, some players like OLX, Effiritin.com, Dealdey, Gloo.ng, Buyam.com.ng, Cribpark, Gingerbox, Buyrightafrica.com, among others, had either exited the space or moved to another line of business due to challenges in staying profitable. The pandemic has now made e-commerce the most viable way for small businesses to, in fact, stay afloat.

Damilola Shinkaye, chief executive officer of Kovitex, noted that before a business decides to go online, the most important thing is to figure out logistics in getting the product to customers, followed by the channel or platform to be used in communicating the product to prospective customers.

The increase in online businesses also translated to the growth of the logistics industry as the number of firms in that industry has risen by 20-40 percent since the pandemic in March.

Benedict Philips, a logistics player and member, Association of Lagos State Carrier Operators, noted that touts are already using extortion to squeeze the industry, which is just beginning to gain traction.