Nigerian shoppers warm to online retailers

Jumia bike delivery In Nigeria, some online retailers let shoppers pay with cash or card when their goods are delivered

Funsho Lawal beams as she strides towards the Jumia delivery van parked outside her house in Surulere, a Lagos neighbourhood.

The delight on her face soon fades as she struggles to fit into the bright red high heels she had ordered.

Technology of Business

"This was the last pair. They only had them in this size," she complains.

Funsho's expression changes again as she scrolls through her smartphone to find another pair of shoes on the Jumia website.

"This is the best, the very best way to shop," she says.

"I don't have to go out to the shop because they deliver right here to my house."

Ten miles of traffic-congested roads away, in a huge warehouse, dozens of shelves stand stacked with a wide variety of products - from electronics to kitchen utensils.

This 90,000-sq-ft (8,360-sq-m) building is the headquarters of Jumia, a company started just over a year ago.

Now it is one of Nigeria's largest online retailers, with 500 workers and 150 delivery vehicles nationwide.

Start Quote

Mark Essien

A lot of people are sceptical about companies like ours, but at the same time there is a lot of demand”

End Quote Mark Essien Hotels.ng
'Fresh air'

The company's Harvard-educated co-founder Raphael Afaedor is bullish about the current growth.

"Every one of Nigeria's 36 states has had a Jumia parcel delivered there, so we're moving gradually to reach every Nigerian with organised retail," Mr Afaedor says.

Jumia faces strong competition from Konga and Dealdey - similar retail websites also experiencing rapid growth.

This rivalry presents options for Nigerian shoppers looking for home-grown answers to Amazon - which as yet has no dedicated retail presence on the continent - or eBay.

Folake Adeniji, another online shopper, says: "For a long time I had to rely on people going abroad to come back with clothes and household items.

"Even if I found the items in shops they were always overpriced, so these shopping websites are like a breath of fresh air."

Jumia warehouse Jumia's enormous warehouse stocks everything from kitchen utensils to books

Start Quote

Retail sites are booming and we can now compare them to other sites in the rest of [Africa] and India”

End Quote Loy Okezie Technology blogger

Other avenues have opened in Nigeria's internet space, with companies offering services in food and drink, real estate, travel and mobile money transfer, among others.

Mark Essien, a software developer, runs Hotels.ng - a website offering listings and reviews for more than 4,500 hotels in Nigeria.

It is difficult to find a current database of phone numbers for hotels around the country - many of which do not have websites.

This presents an opportunity for companies such as Mr Essien's, which has 40 employees, including some who have to physically visit hotels around the country to get them listed.

The five-month-old company is confident that demand for its services will grow.

Mr Essien says: "A lot of people are sceptical about companies like ours, but at the same time there is a lot of demand.

"We have people using our services. We have not started customer marketing yet, but every week we have close to 1,000 bookings."

The BBC's Tomi Oladipo meets the people behind Nigeria's e-commerce revolution

Internet fraud fears

Mr Essien credits much of this initial success to another company, Spark.ng, which provided funding and mentorship that allowed Hotels.ng to grow as aggressively as it has.

Spark has a fund of $1m (£616,000) to offer local internet start-ups. It is led by, among others, Jason Njoku, an internet entrepreneur who runs several online platforms, including IrokoTV, the largest distributor of Nigerian films.

Meanwhile, Jumia received investment from Rocket Internet, a German online incubator which has now replicated the site in Kenya.

While the companies are not willing to divulge the financial details of these partnerships, some observers believe the current period is a healthy one in Nigeria's e-commerce industry.

For many years, any mention of Nigeria and the internet was met with scepticism because of worries about cybercrime.

This has made it hard for local companies to gain the trust of the public, both abroad and within the country, although they are making attempts to overcome this.

Browsing e-retailer Konga on a mobile phone Konga is one of Nigeria's online retailers

"There are definitely technological challenges in Nigeria that are not faced in other countries," Mr Essien says.

"Payment systems are very manual - cards don't work very well. A lot of our customers prefer paying by bank deposits.

"The logistics network is very poor across Nigeria but a lot of these problems also represent opportunities that people can solve and create big companies out of," he adds.

Customers can pay for their goods on delivery, in cash or by card, eliminating the fear of online fraud.

"It is interesting the amount of investment these companies are spending on advertising on television and on billboards," says Loy Okezie, a technology news blogger.

"The retail sites are booming and we can now compare them to other sites in the rest of the continent and India."

Mr Okezie adds that much of the activity picked up in 2012 and the online supermarkets are currently more popular because they cater to immediate needs.

According to the Nigeria Communications Commission, in June 2013 the country had 48.1 million active internet subscriptions through mobile phone networks.

This presents a huge market for online trade - and one that local start-ups are keen to exploit.

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