The electronic commerce industry is
undergoing a process of transition, which has seen many operators move
from just focusing on Business-to-Consumer (B2C) to
enabling Business-to-Business (B2B) services, BusinessDay
investigations show.
This development is driven by the need
to deepen profit margins in a highly competitive market. Many operators
are aggressively embracing an innovative business model predicated on
the development of strategic mechanisms on their platforms to
accommodate potential sellers and buyers of products. The implication of
this innovative strategy is that e-retailers are no longer just in the
business of selling, but now grant access to other businesses to trade
on their platforms.
Omobola Johnson, minister of
communications technology, had said that the country’s e-commerce market
has a potential value of $10 billion with about 300,000 online orders
currently being made daily.
Market observers are of the view that
e-retailers are keen on further expanding the scope of the market beyond
its current potential by targeting the nation’s 17.6 million Small
Medium Enterprises (SMEs).
With the online marketplace, e-retailers
are fostering entrepreneurship by positioning micro-SMEs before a large
homogeneous audience to generate better sales.
“We realised that for our services to be
really valuable to society, we had to build a platform for anyone, not
just Konga, to sell and prosper. Konga had to build a platform that
allowed every entrepreneur and business in Nigeria and beyond, equal
opportunity to reach millions of customers”, said Gabriel Gab-Umoden,
head of marketing, Konga.com.
Konga launched its marketplace called
Konga Mall last year and within the first three months, generated
a sales revenue of over N600 million, according to Sim Shagaya, the
company’s chief executive officer, in an interview with
BusinessDay recently.
Konga mall essentially acts as an online marketplace for sellers and buyers alike to compete against each other for a variety of items.
According to Phillips Consulting, the
local online shopping sector grew from N49.9 billion to N62.4 billion
between 2010 and 2011, and from N62.4 billion to N78 billion between
2011 and 2012, representing a 25 percent increase in each period.
Local e-retailers are already engaged in
a heated battle for online shoppers, with many of them
providing attractive pricing, easier delivery options, as well as
aggressive marketing techniques to beat the competition.
Seeking greener pastures, many
e-retailers are plugging into the global trend of online
marketplace which really entails the deliberate transition from
Business-to-Consumer (B2C) to Business-to-Business (B2B) services.
“In the next few years, online retail
marketplace will be a major success story that will contribute
largely to the nation’s Gross Domestic Product”, Jeremy Doutte, managing
director, Jumia.com, said in a recent report accessed by BusinessDay.
The company foresees e-commerce
contributing up to 20 percent to Nigeria’s GDP, riding on the back of
rising internet access, budding middle-class and a proliferation of
mobile devices. Nigeria had about 74 million mobile internet users as at
November 2014, says the Nigerian Communications Commission (NCC).
On the global scene, eretailers such as
Amazon, eBay, Alibaba including online classifieds like Online Exchange
have all created platforms that enable people to buy and sell.
Recent data on marketplaces of some giant retailers like e-
Bay and Amazon show that they have over 116 to 117 million active users on their marketplace platforms.
Bay and Amazon show that they have over 116 to 117 million active users on their marketplace platforms.
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