While e-commerce giants such as Amazon in America, Alibaba in China, ebay and others were cashing in, making revenues in trillions of dollars during the peak of COVID-19 pandemic, as a result of foresight and tenacity, e-commerce firms in Nigeria struggled to keep up with operations.
They started counting their losses when the Federal Government decided to lockdown several states without classifying e-commerce delivery operations as essential service.
E-commerce is a thriving global industry and has become more popular in Nigeria with increased internet penetration and high numbers of smartphone ownership. In advanced climes where access to the internet and of course, literacy rate stand at appreciable level, e-commerce has become a lifestyle for many. Interestingly, before the COVID-19 pandemic, global retail sales, of which e-commerce makes up a major part, is projected to rise further to an estimated $27 trillion by the end of 2020.
This sub-sector, although predominantly urban in Nigeria, was clearly hit hard when the Federal Government locked down e-commerce activities by not clearly classifying e-commerce companies and their workers under ‘essential services’.
Konga, one of Nigeria’s largest e-commerce companies, says its operations were stalled as its staff were treated as non-essential duty persons.
“It took some explanation for our staff to be allowed to do their businesses during the lockdown. In some states, it was practically impossible as e-commerce delivery workers were either harassed or turned back from performing their duties,” a source at Konga tells BusinesDay.
“Konga staff were either harassed or turned back from making deliveries. Delivery men were harassed while moving items inter-state. There were also reported cases of harassment within some metropolis. Lagos was no exception. In Rivers State, not a single Experience Store was opened during the lockdown. Strict enforcement by the state government meant no e-commerce delivery man was allowed movement even within the metropolis,” the source says.
Also, Jumia, a leading e-commerce firm in Nigeria, reveals that it saw significant drop in number of sales during the lockdown period.
According to Massimiliano Spalazzi, CEO, Jumia Nigeria, the online retail store saw a drop in numbers at the beginning of the lockdown across many states in Nigeria as a result of the COVID-19 pandemic. However, the company stabilised at the beginning of May, with the ease of lockdown, and saw a spike in number of purchases for essential goods such as groceries and household items, Spalazzi notes.
Speaking at a webinar to announce Jumia’s plans for its eighth-year anniversary with members of the media, Spalazzi states, “We definitely had challenges due to the COVID-19 lockdown, currency devaluation and prices of goods increase in this market. However, with our contactless delivery initiatives, contactless payment via Jumia Pay and partnerships with several companies that produce consumer goods, we saw more new and old customers come on our platform to shop in safety when the lockdown was eased on the 4th of May 2020.”
Stakeholders say that Nigerian government must recognise that for its economy to grow, trade including e-commerce in this time of Forth Industrial Revolution should be encouraged, especially as the few e-commerce companies still in operation are already being squeezed by several challenges including logistics, dealing with fake or substandard goods, consistent currency devaluation, among other issues, which led to the likes of Deal Dey, Olx, Kaymu and others to close shop.
While Amazon’s Jeff Bezos’ net worth was estimated at $143 billion, a surge by more than $28 billion from last year, as he profited largely from the coronavirus pandemic when shoppers turned to online shopping rather than visit physical stores, in Nigeria, there were cases of security men delaying delivery for days by ‘impounding’ vehicles and keeping them for as long as they wished.
Delayed delivery makes nonsense of e-commerce. One of the unique selling points of online shopping is prompt delivery of goods. Once purchased goods are delayed, the suspense dies and so does the utility of the goods. Unfortunately, this was what Nigeria’s e-commerce companies suffered during the lockdown.
