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Nigeria's leading finance and market intelligence news report.

COVID-19 and uncertainties: Growing your business through e-commerce 

Following the rapid outbreak of the novel coronavirus (COVID-19) across the globe, there had been concerns surrounding the business impact it presents and the alarming long-term effect the world will have to grapple with if no vaccine is discovered soon. In addition to the business impact, there are also significant economic, health and commercial impact being felt globally. Nonetheless, we have witnessed some other businesses thriving well despite the geographical limitations and constraint in physical interaction caused by the lockdown. Hence, the need to consider e-commerce as a means to grow their business, not only for a period like this, but also prospectively.
E-commerce has increasingly surpassed expectation in the Sub-Saharan Africa SME industry. The United Nations Conference on Trade and Development (UNCTAD) reported that the number of online shoppers in Africa increased annually by 18 percent since 2014. The rapid Internet penetration through smartphones over the past years largely contributed to the growth of Africa’s e-commerce. Also, the International Telecommunication Union statistics revealed that the share of the population using the Internet increased from 2.1 percent in 2005 to 24.4 percent in 2018. Furthermore, Africa’s payments services architecture is evolving in response to changing customer expectations and technology, offering a range of disruptive payment models enabling more people, even without a bank account, to take part in online shopping.
As of April 2020, Nigeria has a population of 206.13 million people according to Worldometers Stats (unofficial), of which approximately 160 million are Internet users, placing the penetration rate at 80 percent, according to Internet Live Stats. Also, with the intention of expanding internet penetration rates in the country, Google launched “Google Station” in 2018, a service that provides free public Wi-Fi in several locations across Nigeria. Despite all these opportunities present, e-commerce (online-retail) is still in its infancy amidst SMEs in Nigeria.
According to Tempest, CEO of E-commerce Forum of Africa during a discussion with Stat Trade Times at Air Cargo Africa 2019, he highlighted several factors that are still constraining the e-commerce market from reaching its full potential in Africa and these include: low levels of Internet penetration, high cost of broadband for Internet access, lack of a national street address system, general distrust on online transaction, low bank card penetration and limited e-commerce payment options. Surprisingly, many of these factors have presented themselves as a leverage for businesses to thrive on, considering the long run benefit an online presence will generate to local businesses.
Let’s take for example, a farmer who sells yam. The lockdown automatically constrains him from showcasing his product at the market, hence loss of sale and maybe, spoilage of the produce. However, this same person could have leverage e-commerce, display his product, get clients who are interested in buying and alas, find a way (through delivery agents) to pass the items across to the final buyer.  This is simply how e-commerce works, connecting sellers to buyer irrespective of geographical limitations.
In a bid to grow your business, you may need to consider the following strategies;
Create admirable content. Achieving results in e-commerce requires that you deploy crowd-sourced content to make a site “sticky” for potential buyers. Amazon attracted millions of consumers by encouraging them to share their opinions of items like books and CDs. What is your strategy to help potential customers for your products or services find you via Google? Use keywords and meta tags to raise your ranking in search results.
Target your existing customers: When many businesses have trouble growing, they immediately think it’s because they don’t have enough customers. Meanwhile, this is a common misconception, so don’t jump to conclusions. Instead of focusing all your effort on customer acquisition, you should improve your customer retention strategy.
Use video demonstrations: There is a common saying that, seeing is believing, in fact, marketing experts across the globe say that video has the top return on investment compared to other marketing tactics. Websites that have videos can get the average user to spend 88 percent more time on their pages.
Use photo reactions and testimonials: Take advantage of user reviews and testimonials as a great way to show proof your products. Get your clients or customer to send in reviews about their experience on the service you render. Take your testimonials one step further. Add a photo and include the person’s full name and title (if relevant to your product). These are ways to grow your online credibility.
Offer discounts: Check Jumia and Konga websites, you would observe that about 80 percent of the products displayed are on discount. It is a strategy to attract buyer. Display the discounted price and also showcase the original price beside it. That’s a sure way to attract buyers.

 

Richard Okunola

 

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