20 January 2013

Nigeria: Online Shopping Creeps Into Local Commerce

Abuja and Lagos — Online shopping is becoming popular in Nigeria, though many still prefer going to the shop to haggle.

Mrs Victoria Eze as decidedly won't buy online. She believes in physical transactions because she had at one time ordered for shoes from an online shop and at the point of delivery, she discovered that the shoes weren't those she actually wanted and the deal was non refundable so she had to dash the shoes to her cousin.

"I'll not shop online because of the experience I had with by bank. My account was emptied and as I talk, my bank has refused to track who did it. I lost the money. Internet has come with more fraud in this part of the world," Mrs Helen Udo expressed.

Mr Jamal Mustapha on his part said if one isn't careful in making purchases online, they may end up buying wrong items because things displayed online are photogenic and the picture may not represent the true appearance or beauty of those items.

To a Lagos-based journalist Henry Pearl, shopping online is not necessary. She said, "Why do I have to shop online when there are shops around where I easily walk in to pick items? I do buy shoes, bags, clothes or anything you can think of on the move--when I'm going home or coming to work. If I see anything that I like and I can afford it at that time I pick it! So for me, I shop on the go."

As technology has made the world a village where people and places can connect in a twinkle of an eye, many business transactions are made without physical contact. The technological advancement has changed the way things are done worldwide and online shopping is one of the advantages of the internet era where people can buy and sell items of all sorts through the website. Online shopping is one thing that can assist a country to drive its yearning for a cashless society.

How is online shopping done?

Online shopping is a web-based transaction where people can buy things of their choices through the World Wide Web (www) made possible by the internet. Items purchased online are delivered to buyers in their homes, offices or anywhere and payments for such transactions are done through acceptable credit or debit cards.

Online shopping in Nigeria was ushered in by the electronic commerce or e-commerce which came into being when businesses started to shift from real time market to digital market space. Within the last two decades, online shopping has increased exponentially around the world but has got traction in the Nigerian ecosystem in the last few years.

The concept has not really gained public acceptability as consumers still prefer to see, touch, feel in concrete terms, negotiate what they are buying and make cash payment. What is popular in Nigeria is perhaps flight booking; even this, sometimes the booking is online while payment is made in cash at airport check-in counters.

Even though online banking is being pushed to drive the cashless policy, banking transactions are yet to be wholly online because many people still carry huge sums of money around the country for several reasons.

Problem with online shopping in Nigeria

Sunday Trust investigations revealed that most online shops usually have price differences of about N1,500 to N2,000 depending on the type of items purchased compared to physical stores prices. As cost of shipment or delivery is added based on the distance from point of sale to point of delivery. Some online stores which are referred to as classic web shops are said to be expensive and that only the rich can patronise them without groaning. Few online stores do free delivery, yet buyers believe they always add cost.

However, considering how busy Nigerians always are, it pays to shop online. After gruelling office work, many face traffic gridlocks especially in cities like Lagos, Port-Harcourt and Abuja. So some people would prefer to place online orders to save them the trouble of passing through terrible traffic chaos in the process of visiting stores.

Today, some of the leading online shops in the country include: jumia.com, bringitbay, naijastyles, myboolah, taafoo, circuitatlantic, konga.com flegz.com, shopkolo.com, pickclicknpay. While they make room for credit and debit cards such as Interswitch, Mastercard, Varve, etransact as payment platforms, some of them also allow customers to make orders for items and collect cash payments at the point of the delivery.

Debbie Adeoye, Manager, Business Development and Relationship Manager of .NeTPlus maintained that the implementation of cashless policy, awareness of the viability and convenience of online shopping have been publicized.

According to her, despite the sceptics' opinion that Nigerians do not associate with online transactions, business owners are gradually taking their businesses online in various degrees, from posting contact details on listing sites, running adverts online, social media engagement to actual initiation and completion of transactions.

She explained that since the evolution of online shopping in Nigeria, a number of shopping platforms have been created with each operating different models. Such models include sale of product through deals, auction of products online, resale of products purchased from brands and vendors and provision of online infrastructure to merchants to facilitate end-to-end sale transactions between merchants and consumers with all models having websites with product display options to provide consumers with visual and description view of the products.

The concern about fraud

Adeoye submitted that although the operational models vary, the challenges faced by online retailers and shoppers are predominantly the same. Such challenges include: supply of personal information and debit card details online, due to fraudulent activities in time past via the internet Nigerians have become sceptical and wary of providing such details. Instead they prefer to go directly to the store to do their shopping. With this in mind, owners of online shopping platforms have their websites designed to encrypt all transactions on the platform and have involved the banks, thereby ensuring that at least 90 percent of transactions is carried out on the banking network.

This she said has drastically reduced possibility of fraudulent transactions adding that online shop owners also adopted the "pay on delivery" module in which customers pay for products purchased after delivery. Though the merchant bears most of the risks and losses in the event, that after delivery the product is rejected, it builds credibility in the minds of consumers.

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