Online shopping in Nigeria, Africa’s largest economy by GDP (Gross Domestic Product), has caught on like wild fire, as a recent study show an expectation by Nigerian consumers to conduct more shopping online. Out of the about 50 million internet users in the country, 65 percent of users already shop online and another 24 percent of users expect to do so in the future. The research study conducted in Nigeria by Ipsos, a global market research company, on behalf of PayPal, however show that there are several key drivers that would encourage even more ecommerce in Nigeria. Of the online shoppers surveyed, 53 percent of Nigerians who have shopped online in the past said faster delivery of goods would encourage them to shop online more often, 40 percent indicated that safer ways to pay was a key driver, and 31 percent indicated lower product costs as a driver to do more shopping online.
On a regional perspective, Nigeria is without a doubt a significant ecommerce nation leading in the amount of potential and existing online shoppers (89 percent), compared to South Africa (70 percent) and Kenya (60 percent), according to the report. Intra-African trade is significant with 36 percent of Nigerian cross-border shoppers (those who have shopped online from another country) buying from elsewhere in Africa in the past 12 months. South Africa is the main destination with 30 percent of Nigerian cross-border shoppers buying from the country in the past 12 months. It is followed by Kenya with 2 percent, Egypt with 1 percent, and the rest of the continent with 3 percent.
The research shows that security of epayments and delivery costs are among main concerns preventing consumers from conducting more online shopping.
31 percent of those who have not shopped online give concerns about security of payments as a reason for not currently shopping online, and 27 percent say that the cost of delivery is a reason for not currently shopping online. Fear over security of online payments means that cash on delivery is still the most used and preferred payment method when shopping online, with 39 percent of online shoppers using cash and 32 percent indicating it is a preferred payment method for online purchases. “Online security matters. This is why PayPal provides a simpler, easier and more secure way to shop and pay on millions of websites around the world,” says Efi Dahan, regional director for Arica and Israel at PayPal. “The fact that PayPal does not share financial information with the seller when authorising a transaction keeps the consumers’ financial details more secure”, he further explained.
Nigerian consumers however who have heard of PayPal agree the online payment processor is a fast (85 percent), convenient (83 percent) and safe (73 percent) way to pay online – to the extent that 72 percent of online shoppers aware of PayPal agree it is the safest online payment method. The research shows the overwhelming usage of mobile phones to shop online. 90 percent of online shoppers that own a smartphone or a feature phone have used it to shop online while 51 percent use their device to shop online once a month or more. Shopping on mobile browsers seems to be the most popular way to do mobile shopping with 43 percent of Nigerian mobile shoppers stating a preference to shop using the phone’s browser, compared to 34 percent who prefer to shop from an app (and 23 percent who have no preference). However, some barriers remain for mobile shopping.
Security of payments was flagged as a concern to Nigerians with 30 percent of mobile shoppers saying security of online purchases from a mobile device is a reason for not shopping online using a mobile phone more often, while 30 percent also flagged concerns about internet usage costs on mobile as a barrier to mobile shopping. Nearly half (47 percent) of online shoppers in Nigeria purchased digital goods in the past year, followed by 39 percent that purchased adult clothing, footwear & accessories online, and 33 percent that purchased physical entertainment such as books and CDs online.