Economic downturn sees Konga, Jumia, Yudala lose site traffic

E-commerce firms operating in Nigeria are getting hit by the  economic downturn facing the country as the number of site visits drop to an all time low.

While visits to e-commerce sites have dropped, the bounce rates have increased which is itself a negative outcome.

Bounce rate is the percentage of single-page sessions where a user left a site from the home page without interacting with the page.

The implication of this is that while visitors continue to drop, even those who visit the e-commerce websites are barely interacting with these websites, further limiting their chances to make sales.

“The declining visits to e-commerce sites is happening because Nigerians are poorer now. High exchange rate, and the bad economy has contributed to it and sales have dropped as low as 50 percent,” says Uzo Mbonu, Managing Director of GSM Planet who has been selling through e-commerce companies such as Jumia and Konga for three years.

Africa’s largest economy contracted in the first quarter of 2016, the first time since 2004.

The World Bank this week downgraded Nigeria’s growth forecasts for this year to a mere 0.8 percent from earlier estimates of 4.6 percent.

Nigeria’s e-commerce market records transactions volume of about 300,000 online orders a day, and $2 million dollars of weekly revenue which translates to $104 million annually.

A review of data on website visits has shown that Konga’s total visits dropped to 2.5 million in May 2016, from 7.2 million in December 2015.Similarly, visits to Jumia Nigeria have dropped to 6.9 million from 13.4 million in December 2015.

In addition, Jumia’s global rank as estimated by Alexa has dropped 168 places to 1,110, with a bounce rate of 29.40 percent which has worsened by 25 percent in the past three months.

Yudala has witnessed a drop in traffic from 390,000 in December 2015, to 160, 000 in May 2016, and Dealdey dropped to 371, 000 from 470, 000 in December 2015.

For Dealdey, its global rank has dropped 662 places to 7,282 while its bounce rate of 25.5 percent has worsened 18 percent in the past three months.

Kaymu has appeared to be an exception to the trend, with visits moving upwards from 440, 000 in December 2015, to 1.65 million by May 2016, however, its bounce rate increased by 44.4 percent, meaning more people left the website without executing transactions.

“It is a general problem. Even shop owners are feeling it too as the country is in hardship. Individuals are finding it so difficult these days so I’d say it is an economic problem,” said Gloria Iheanacho, CEO of Gloria Ventures, a dealer in office equipment and home appliances on Jumia and Konga.

Apart from the general economic malaise, another factor that may be contributing to the reduction in visits to e-commerce sites is the declining internet subscriber base.

Data from the Nigerian communications communication has shown a steady decline in the total number of Internet subscribers to the four GSM networks in the country.

Subscriptions have dropped to 91,192,371 in April 2016, from 97,824,017 recorded in November 2015.

The data for the downward trends of the E-commerce sites was mined from Alexa and SimilarWeb.

Alexa is a global pioneer in the world of analytical insight that has developed robust and accurate web analytics. According to the company, its traffic estimates are based on data from our global traffic panel, which is a sample of millions of Internet users using one of over 25,000 different browser extensions.

SimilarWeb on its part, uses data extracted from four main sources: 1, A panel of web surfers made of millions of anonymous users equipped with a portfolio of apps, browser plugins, desktop extensions and software; 2, Global and Local ISPs; 3, Web traffic directly measured from a learning set of selected websites and intended for specialized estimation algorithms; and 4, A colony of web crawlers that scan the entire Web.

It uses big data technologies to collect, measure, analyze and provide user engagement statistics for websites and mobile apps.

“Restrictions in access to forex is hurting e-commerce as there is now a limit to purchasing power. As a result, sellers are finding it difficult to restock their inventory as much as they want to, ” said Franklin Adekunle an I.T. practitioner in Lagos.

CALEB OJEWALE & MARTINS NOEL