As the digital wave sweeps into the Nigerian informal retail market, Chief Executive Officer Alerzo Limited, Adewale Opaleye, said technology investment of business-to-business e-commerce companies is addressing challenges in the sector.
Estimated at over $100 billion, the Nigerian informal retail sector has a chain of challenges such as mass illiteracy among retailers; clustered market; supply versus demand issues; retailers’ lack of or limited inventory knowledge, to mention a few.
Despite the challenges, Opaleye said b2b e-commerce platforms see opportunities and are creating digital products that make life easier for informal retailers. "It is one market long overdue for tech-based solutions.The market holds enormous potential, however, there are several problems to solve to fully open up the sector.
“Looking at the market, it is cash based and is largely unregulated which leads to instability in market prices. The role of several intermediaries also creates complexity. Likewise, business growth is affected by retailers' lack of access to finance. Inadequate logistics facilities also take its toll on the supply chain. So these are issues we are addressing with technology, thus exposing retailers to modern business practices," he said.
He further explained that fintech products by e-commerce platforms promise long term positives on the informal market. For instance, retailers using Alerzopay build financial history that could help them access funds for business expansion. According to him, this holds overall financial inclusion benefits for the market, as several rural retailers previously excluded in the conventional banking can be serviced digitally.
The Alerzo boss said e-commerce also benefits the sector by addressing the lack of business and management skills prevalent among informal retailers. He noted that a platform like Alerzo is run by professionals with apt business knowledge, and it provides sellers with training, and advisory which can help them grow their businesses.