Nigeria - eCommerce Nigeria - eCommerce
Nigeria’s economy is gradually becoming cashless, as digital payment and electronic banking are implemented in phases across 27 states of the federation, which began in Lagos as a pilot in 2012. At present, most transactions are conducted electronically, while the remaining states continue to deal with cash (naira, the Nigerian currency), with October 1, 2017 as the proposed switch over date. The cashless policy has resulted in increasing demand for ATM services deployed in major cities and commercial centers across Nigeria, such as Lagos, Port Harcourt, Enugu, Onitsha, Ibadan, Kaduna, Kano, and Calabar, to facilitate electronic banking and financial services.
Cross-Border eCommerce/B2B eCommerce/Online Payment
The successful adoption of electronic payments in Nigeria is encouraging the entrance of payment service providers such as Visa and MasterCard, which see Nigeria as a promising market. Debit cards from many local banks such as Citibank, Zenith, UBA, and Fidelity, are now used by Nigerian travelers to make payment in countries such as the United Kingdom, Germany, South Africa, and the United States.
The demand for electronic transactions has attracted payment facilitators from Europe and Asia who are investing in Nigerian electronic infrastructure projects. Online commerce and financial technology in Nigeria is strengthened by fast growing youth populations, expanding consumer power, and increased smartphone penetration. The current Ecommerce spending in Nigeria is estimated at $12 billion, and is projected to reach $75 billion in revenues per annum by 2025 (McKinsey).
eCommerce Intellectual Property Rights
In 2015, the Federal Government signed the Cybercrime bill into law to prohibit and prevent fraud in electronic commerce. The purpose of the Cybercrimes Act of 2015 extends beyond prohibiting, preventing and criminalizing online fraud, but also prescribes punishments and sets the institutional framework for enforcement. The goal is to protect e-business transactions, company copyrights, domain names and other electronic signatures in relation to electronic transactions in Nigeria.
Digital Marketing & Popular eCommerce Sites
Africa Internet Group owns online retailer Jumia and 9 other e-ventures. Its best-known venture is online retailer Jumia, one of Africa’s better funded startups. Since its inception in Lagos in 2012, Jumia now operates in 22 African countries selling everything from diapers to IPhones and microwaves. The company had €33.0 million in revenues during the first 9 months of 2016, following a 56% drop in revenue attributable to economic depression despite spike in its customer base. Konga was set up in 2012 as a competitor to Jumia, selling a wide range of products from home appliances to groceries. During last December (2016) Yakata, another competitor reached over 155,000 orders, valued at nearly €10.0 million for the month alone.
Major Buying Holidays
Online retailers operating in Nigeria are exempt from payment of corporate income tax during the first 5 years. This pioneer status represents the import duty waivers granted to companies as incentives to enable them make profit within their formative years. The incentives extend to tax credits, capital allowances, investment allowances, and tax exemptions.
Nigeria is ranked the 7th highest internet using country in the world. In 2016, about 16 million (8.6%) Nigerians were active Facebook users each month, Twitter ranked second with 5.29%, Pinterest ranked third with 0.42%, while many others also accessed You Tube video sharing website. The popularity of social media in Nigeria increases with mobile penetration and as data costs fall. Access to local social media sites (Nairaland and Linda Ikeji) has also increased since 2014.