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Building Nigeria's e-commerce sector with online and bricks & mortar

Building Nigeria's e-commerce sector with online and bricks & mortar

The founder of a Nigerian start-up One Kiosk Africa Adeshina Adewumi says the integration of online and brick & mortar stores can be harnessed to grow Nigeria's e-commerce sector.

Adewumi says with an enhanced distribution model, data on how to locate businesses would be made available to meet consumer needs and help cut costs on delivery logistics for e-commerce platforms.

A Boston Consulting Group (BCG) report notes that e-commerce has the potential to create approximately 3 million jobs in Africa by 2025.

Adewumi agrees and says "people spend a lot on basic needs" but the challenge is that "most of these purchases are not accounted for online."

He adds: "A synergy between online marketplace and brick and mortar stores would not only capture this informal retail channel, but also activate other value add such as logistics among others. So now people get to pay extra for delivery and some other people get to enter into the value chain business thus creating employment opportunities for the unemployed."

Logistics remains a major challenge for e-commerce in Nigeria as evident in the recent shut down of a leading e-commerce platform, Gloo.

It could be argued that target consumers may not want to pay more for online shopping delivery in the long term.

Adewumi explains that the added cost is not for deliveries only but for comfort.

"So the cost would actually be lower with consolidation with the brick and mortar store. So what the regular e-commerce platforms do now is link you with online stores (not minding) where they are located. Now, connecting with the closest store to the user, you have little or no cost of delivery. Just a little fee to facilitate the process. So if you are in Lagos in Ikeja and we match you to a store in Ikeja, it removes the high cost that would have occurred if we were matching you to someone in Lekki - who will have to incur cost from Lekki to Ikeja. This is why among many other reasons the cost is high on logistics."

He added that the synergy will enable businesses to leverage online to sell more while users' experience improves. Nonetheless, the viability of the model to Nigeria's e-commerce industry is not clear since none of the top marketplaces is experimenting with it at the moment.

One Kiosk plans to roll out its service before month-end, with the intention to secure first mover advantage as the model has been tested abroad and validated in Lagos.

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