The entry of e-commerce in Nigeria was predicated on the coming of an easier, faster and more convenient shopping option to the prevalent brick and mortar culture. It came with cost saving benefits and a competitive market pricing which gives consumers assortments to choose from. Within a few months, a new price checking culture had emerged. Nigerians began to check and compare product prices online, rather than the conventional market price sampling. Hence, a rivalry was born, as proponents of digital products gradually lured customers away from physical stores.
While millions of digital natives and migrants tilted towards convenience of online shopping, the Nigerian informal retail market, estimated at over $100 billion kept the conventional market routes busy. This is understandable. About 90% of the retailers in the sector have no formal education, and 85% of them prefer to settle their transactions in cash. Though the majority of them have access and own smartphones, the devices are mostly underused, as internet surfing skills don't appeal to the majority in this bracket.
However, these retailers needed the convenience of e-commerce. Market trips are not minced meat. For some, it takes a full day of physical and mental energy. Transportation costs also eat deep into their profit. The market was thus open to a well tailored technology. "I watched my mother, a retailer, burn both ends of the candle to provide for both my siblings and me. While studying at a university in China, I saw firsthand how technology could transform and empower communities. So the challenges my mother went through spurred me to create a similar solution for the Nigerian informal retail community," said Alerzo Limited CEO, Adewale Opaleye.
Alerzo is one of the fast growing B2B e-commerce brands deploying technology to ease business experience for informal retailers in Nigeria, connecting physical stores with digital solutions. TradeDepot, Omnibiz, Wabi2b also play in the sector across Nigeria.
Fully aware that the majority of these retailers have no formal education, e-commerce, through shopping and logistics technology, has simplified the goods ordering process for retailers. They source products from manufacturers based on orders from retailers and deliver them to their stores. "We've made the restocking process easier by making them available on simple channels like USSD codes and WhatsApp. More importantly, we are also training retailers in rural communities on how they can order goods using our app. Improved internet penetration is also helping because many of them have smartphones, they only need little guidance and teaching," Opaleye added.
B2B e-commerce companies say they also offer market advisory services to retailers to enable them to improve their profit margins. According to some of the key market players, they recommend popular stock options to retailers based on data gathered from other vendors and market trends observed from consumers. This way, they help retailers introduce new products that establish them as the go-to shop in their locations and attain customer loyalty.
As the online shopping wave gets stronger, the crucial space occupied by informal retailers in the Nigerian setting cannot be ignored. It is therefore noteworthy that digital solutions by e-commerce brands in the sector are showing how technology can complement physical stores, improve market efficiency and facilitate overall digital economy growth.