• Saturday, July 20, 2024
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NIPOST: E-Commerce and driving growth with modern digital tech systems

Why e-commerce in Nigeria remains unregulated despite market growth

The world is constantly changing and evolving, and this change has brought about the emergence of digital and automated technology systems, very important for growth in the transportation sector.

However, in order for the sector to fully maximise business opportunities as well as become more competitive, it needs to adopt the use of digital technology systems.

It is important to point out that before the emergence of Covid-19 pandemic, the sector was highly underrated. Things has changed, and it has now become the centre of attraction that industries depend on to effectively move goods and services to manage their businesses, e.g. the manufacturing sector, warehouses, transport providers, freight forwarders, distribution centres, retailers, etc.

Nigeria’s Postal Service (NIPOST) is supposed to be one of the core agencies under the transport sector. However, it is sad that our nation has not been able to capitalize on the agency’s strategic relevance to our economy, creating businesses and employment opportunities that will add more value to the lives of its citizens.

NIPOST can facilitate the growth of Nigeria’s e-commerce and logistics sector, if properly managed. Interestingly, the Nigerian e-commerce market is expected to register a compound annual growth rate (CAGR)of 12.24% during the period of 2022-2027 due to advanced infrastructure, high internet penetration and a growing number of card-based payment systems.

Transportation and logistics globally now performs better with the use of digital and automated technology systems that enable organisations to interface and communicate more effectively with its stakeholders such as manufacturers, distributors, and customers through the use of data. It makes organisations more productive.

NIPOST is a critical part of our economy and so it’s very important we revive the dying agency as well as curb the consistent loss of customer’s parcels, violation of mail items, delays, etc.

In the past, there have been lots of complaints from customers using the agency services to send parcels abroad, which resulted in customers losing goods as well as un-remitted parcels resulting in loss of revenue, downtime, and reputation for the agency.

In developed nations, if this happens such agencies will be slammed with heavy compensation charges that might result in a total shut down in some cases.

Therefore, adopting the use of modern technology systems (such as GPS, block-chain, IoT, machine learning, tracking devices, etc) will help facilitate tracking of parcels as well as boost traceability.

Also, with the help of anti-theft GPS, near real-time locations of parcels can be received as well as separation of parcels in transit. This would also help foster more security measures to avoid loss of parcels belonging to customers.

For example, if at the time of collecting parcels from a customer a real time information is sent to the customer after the first scan, it will be almost impossible for the agency to deny responsibility for loss of parcels.

Read also: Role of e-commerce in driving Africa’s green future for the industry

Also, blockchain technology, another modern digital system, can be used to monitor, distribute, move, and trace parcels as well as update records and performance.

The use of internet-of-things (IoT) sensors can also be used to determine the amount of space a cargo occupies as well as calculate shipment cost upfront unlike what is obtainable at the Parcel Processing centre at Ikeja, Lagos.

The model where NIPOST uses manually outdated processes is unsustainable and this is responsible for decline in customers and mail volumes which has made the agency unattractive and less competitive when compared to its competitors in the private sector e.g., FedEx, DHL, third party agents to mention a few.

Another point worthy of mentioning is the fact that we have NIPOST offices in all nooks and crannies of Nigeria, which gives the agency competitive advantage over other players in terms of spread.

However, the agency has not been able to leverage this advantage of our population (more than 200 million people) coupled with the recent growth of the logistics and e-commerce industry due to Covid -19 pandemic that opened more business opportunities.

This is because personal and consumer freight that would have been moved by travellers during trips are now routed solely via logistics and courier agents.

With the above, it makes business sense that NIPOST urgently start building back its lost credibility and reputation from customers through the introduction of robust insurance schemes where mails can be insured against risks such as theft, vandalism, and loss in the event of any of these risks occurring and there needs to be appropriate compensation paid to customers affected.

The agency also needs to hire professionals in areas such as digital technology, transportation, business development, sales, supply chain management and logistics experts to help reposition it to be more competitive, productive, and profitable.

Also, while the growth of E-commerce businesses has led to rising demand in managing deliveries, it is therefore important that the agency start providing better services that will help retain and attract more customers.

Additionally, restructuring the laws and policies establishing the agency will help it to be more flexible and adapt to changes, attract new investors, birth more small and medium enterprises (SMEs) as well as make it more business friendly.

Finally, the agency needs to be given the necessary support and attention by the government to help manage current challenges facing it, such as infrastructural deficits, stale policies, insecurity, high corruption, inadequate platform to receive customers feedback as well as closing all knowledge and skills gaps in the agency.