• Friday, March 29, 2024
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BusinessDay

A new revolution: The battle between e-commerce and chat commerce

e-commerce

Although e-commerce in Nigeria is predominantly urban, the industry recorded about $1.9billion in 2016 and has been projected to reach an estimated $3.9 billion by 2020 if the right regulations to guard online sales are put in place to match up to global standards, experts say.

Electronic commerce is a thriving global industry and has become more popular in Nigeria due to increased internet penetration and high numbers of smartphone ownership. In advanced climes where access to the internet and of course, literacy levels stand at appreciable levels, e-commerce has become a lifestyle for many. Interestingly, global retail sales, of which e-commerce makes up a major part, is projected to rise further to an estimated 27 trillion dollars by 2020.

However, with increased use of mobile chat applications comes a new revolution of ‘chat commerce’ – the use of chat applications such as WhatsApp and WeChat for commerce. With 1 billion users on Wechat and 1.6 billion monthly users on WhatsApp, chat commerce is on track to undoubted success due to the amount of users on these platforms.

Speaking at a networking event organized by Clickatell, a company that powers chat commerce through SMS, WhatsApp and other social channels, Hannes van Rensburg, chief commercial officer, Clickatell said that the revolution of chat commerce is here and there is no better place for it to thrive than Nigeria, as the country is populated with youths who have the drive for technology and are prepared to try out new things.

“The reason why e-commerce companies in Nigeria are still struggling is because although there are a lot of consumers in the market, not a lit of people browse the internet on PCs or laptops. It’s a mobile first nation and most people interact through the use of chat apps and SMS, so the market for chat commerce in Nigeria is significantly bigger that the market for e-commerce,” van Rensburg told BusinessDay.

Chat commerce is any practice of conversing with a customer via messaging apps to result in a sale, and although it is still a fresh term in the market, the telecommunications world is starting to come to terms with this new revolution and the opportunities it brings.

Clickatell which is one of the first companies to partner with Whatsapp and the first company to launch chat ban king on WhatsApp, currently powers GTBank’s *737#, Firstbank’s chat banking, MTN on its bulk SMS platform, as well as other partners.

Clickatell’s platforms and solutions help brands reach over 85 percent of the world’s population, across more than 1,000 mobile network providers and multiple mobile channels.

Concerns of security on chat platforms were addressed when Rensburg emphasized that WhatsApp is encrypted end to end and that authentication process is thorough on these applications that are already used by billions of people around the world.

“To install a new WhatApp application, users have to go through authentication process. So there is inherent security built into the chat application. So, people don’t have to think about password changes and the likes because it’s built into the system,” he said.

As chat commerce continues to grow for small local businesses who look to social platforms to market and sell products, large organizations and brands are now also looking to leverage this channel, even at scale. The worlds largest banks are now engaging in SMS marketing, social media platforms and chatbots. And, as with any evolving technology, there are still plenty of teething issues that would be ironed out in the near future.

Jumoke Akiyode-Lawanson