Online Sales Boom As Top e-Commerce Sites Lure Shoppers

By Alphonsus E.W

Online shopping

Nigeria’s online retail business popularly known as electronic commerce is booming as Africa’s largest cell phone market converges with increasingly cheaper internet access.

Nigeria had 120 million active cell phone lines and 56 million internet subscribers, as at September 2013 according to data from the Nigerian Communications Commisssion (NCC) while International bandwidth brought by undersea cables, has increased about 26 times to more than 9,000 gigabits per second (9 terabits) over the past four years.

One market research firm suggests that Nigeria, which is Africa’s most populous country, will have almost tripled its online purchases in just three years to more than $1 billion by 2014.

This compares with South Africa, whose e-commerce sales were just 4 billion rand ($409 million) last year, according to research firm World Wide Worx estimates.

Because of the security issue of online transaction, which is a major concern, most Nigerian online shoppers prefer to pay cash on delivery, although electronic payments are growing.

The number of payments in Nigeria made by mobile phone’s more than doubled to 2.4 million in the first half of 2012 from the same period a year earlier, while Internet payments rose 9.3 percent, according to data from the Central Bank of Nigeria (CBN).

The improving connectivity and increase in businesses done online is also providing impetus for data centers to spring up.

MainOne Cable Co Ltd., which operates an undersea cable connecting West Africa to Europe, plans to open a $25 million data center in Nigeria by June, 2014.

The center will provide reliable Internet access and host information for clients such as banks, phone companies, government bodies, and a growing number of dot-com businesses, MainOne Chief Executive Officer Funke Opeke said at the center’s construction site in Lagos, last month.

Analysts say they expect the licensing of a new 2.3GHz spectrum by the Government to “be explosive,” for broadband growth.

Nigeria plans to grow its mobile broadband access to 80% of the population and fixed broadband access to roughly 20% by the year 2017 from 4% presently, according to the National Broadband Plan 2013-2018.

While online commerce continues to boom, industry stakeholders sound a note of warning about the looming capacity shortage in the industry.