Alerzo Limited, a business-to-business e-commerce platform in Nigeria, recently offered a 20 percent discount to all its customers in this year’s Black Friday sales, which started over the weekend on 26 November and runs into December, 2021. Adewale Opaleye, the chief executive officer, Alerzo Limited, spoke with SEYI JOHN SALAU on the added incentive that will see to the growth and profitability of its customers’ businesses. Excerpts:
What difference does Alerzo bring to the e-commerce sector?
The e-commerce sector holds so much potential, and Alerzo operates where it matters: the informal retail sector. In Nigeria, the informal sector is classified into micro, small and medium enterprises (MSMEs). The sector makes up 50% of the nation’s gross domestic product (GDP), making it the major source of economic growth, productivity, and competitiveness. Moreover, 90% of Nigeria’s retail market transactions happen in the informal channels, and the Food & Consumer Goods retail market is worth (estimated) over $40bn. According to a PWC MSME Survey conducted in 2020, Nigeria’s informal retail sector comprises widely-spread open markets, where commodities such as, food, clothes, electronics, building materials, furniture, and so on are sold; and they include neighborhood stores ranging from large to small operators as well as kiosks, roadside food sellers, and street hawkers. Our mission, therefore, is to empower these informal retailers through our ecosystem of digital products, so they are equipped to run profitable and sustainable businesses. We strongly believe that technology has the potential to transform the way informal retailers conduct their businesses, by using it to facilitate – with just a click of a button – fast and easy access to a wide assortment of consumer products at zero delivery cost to the retailers. With our digital platform, retailers are now saving money on cost of products because it’s cheaper on Alerzo versus the open markets – and on delivery fees (free delivery on Alerzo). These savings, in turn, provide the needed boosts for their businesses and widen their profit margins.
With Nigeria’s economy being one of the largest informal sectors in the world, how do you think Alerzo’s offering will fare in this space?
We’re focused right now on growing our business by onboarding more informal retailers across the country. We want to expand into new markets as we believe our platform can empower more people across the country. Our strong presence in the South West, and continued expansion to the North West and Central consolidate our desire to grow in a sustainable manner and continue to serve those that are underserved. On our retail App, Alerzoshop, we are already selling cheaper than the open markets to our customers on our retails App, Alerzoshop, and we offer free delivery in all the cities we’re currently operational.
What are some of the biggest challenges you have faced since inception?
There are a plethora of challenges and opportunities within the sector we operate. I founded Alerzo to solve these challenges by creating digital products that will make the lives of our informal retailers easier. The informal retail market is characterised by challenges such as: limited inventory due to high demands (market is underserved); retailers have less access to finance which sometimes lead them to buy adulterated products; the market is clustered and products are often overpriced because prices are largely unregulated; distance to market; opportunity costs; dangers of travel; inadequate transport for purchased goods – all of these are some of the challenges impacting informal retailers. But the good news is that we’re helping to solve these challenges one after the other.
Read also: Alerzo offers 20% discount on all Black Friday orders promo
What is the plan for expansion since you secured the series A funding?
Our goal is to empower a broad community of retailers across the country. We hope to continue to secure the right investments and partners to help us achieve this goal.
Going by your strategy of reaching the underserved communities, how has internet penetration and ICT know-how of people affect your outlook?
Ecommerce in Nigeria is gaining momentum. The necessary pillars needed for the culture to thrive are gradually falling into place. For instance, 50% of Nigeria’s population, that is 104.4 million, are connected to the internet. Between January 2020 and January 2021, over 19 million new users got connected to the internet. This represents a 22% growth year-on-year (YoY). Today, majority of Nigerians access the internet with their mobile phones. With the increasing internet penetration, mobile phone users in the country and the National Economy Digital Policy and Strategy for Digital Nigeria by the Federal Government, we expect that more Nigerians will imbibe the ecommerce culture.
Can you shed light on your primary target audience and what informed this?
We serve informal retailers – men and women, who are a critical part of the $100 billion informal market sector within Nigeria. Although, at the moment, majority of our retailers are women, 70% of whom are primary breadwinners contributing to Nigeria’s economy and GDP. I believe in the next couple of months, we would have a good gender mix when we start selling non-consumables. Due to limited infrastructure, informal retailers have to go to great lengths to obtain inventory. Distance to market, opportunity costs, dangers of travel, inadequate transport for purchased goods all impact informal retailers. We’re creating an environment where informal retailers no longer have to deal with these issues, we change the landscape for them one delivery at a time. For the past two years, we have delivered to informal retailers at no cost. With our delivery services, retailers save time, energy, and resources that they would have otherwise expended in restocking. These benefits have resulted in 85% of our retailers reducing their 2 – 4 times a week restock trips to zero.
Finally, what’s the story behind Alerzo and when was it launched?
I started Alerzo in 2019 in Ibadan, Oyo State. Growing up, I watched my mother burn both ends of the candle to provide for both my siblings and me. She owned one informal retail outlet. Like everyone who owned similar outlets, she went through many challenges including inconsistent inventory availability, limited access to financial aid and unreliable market pricing trends. While studying at a university in China, I saw firsthand how technology could transform and empower communities. Seeing the challenges my mother went through spurred me to drop out of school and create a similar solution for the Nigerian informal retail community. Since 2019, Alerzo has continued to grow and expand into most of the states in the South West, and more recently, North West & Central.
