Nigeria E-commerce Market - Growth, Trends, COVID-19 Impact, and Forecast (2022-2027)

Market Overview

The Nigerian e-commerce market is expected to register a CAGR of 12.24% during the period 2022-2027. The market is primarily driven by advanced infrastructure, high internet penetration, and a growing number of card-based payment systems.

• Nigeria's economy is moving toward cashless transactions, with digital payment and electronic banking being adopted across the country. Many transactions can now be completed electronically using a variety of new digital financial services platforms.
• With a 30 percent increase in 2021, the Nigerian eCommerce market contributed to the global growth rate of 29 percent. The development of electronic payments in Nigeria encourages payment service providers to enter the industry, which sees Nigeria as a viable market. Nigerian visitors increasingly use debit cards from local banks such as Citibank, Zenith, UBA, and Fidelity to make payments abroad in nations such as the United Kingdom, Germany, South Africa, and the United States.
• The rise in fraudulent online activities, sometimes known as cybercrime, is one of, if not the most, significant constraints facing Nigerian online purchasing industries. Cybercrime is any criminal conduct carried out over the internet to defraud individuals of their property. People's e-wallets have been stolen, and phone numbers have been used for advertising illegal services, among other things.
• The importance of excellent logistics in any business or industry cannot be overstated. Logistics is critical for creating visibility in the e-commerce supply chain and determining overall consumer satisfaction, efficiency, and service delivery. However, it is worth noting that it necessitates a great deal of skill and a complex network of multiple small systems.
• Consumers stayed at home for a long time during the COVID-19 Pandemic due to movement limitations, which resulted in various behavioral modifications in the name of following rules and avoiding infection. These changes are primarily due to the product they purchased and how they bought it. At this time, consumers mainly purchased their basic and essential requirements through online shopping.

Scope of the Report

E-commerce, commonly known as electronic commerce, involves any online transaction, including the purchase and sale of products and services. Among other advantages, e-commerce provides convenience, borderless transactions, and scalability.

The Nigeria E-commerce Market is Segmented into B2C E-commerce (Beauty and Personal Care, Consumer Electronics, Fashion and Apparel, Food and Beverage, Furniture and Home), and B2B E-commerce.

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Key Market Trends

Penetration of Internet and Rise in online payments

• The internet landscape in Nigeria is thriving, and it has one of Africa's most developed internet economies. Nigeria has the continent's largest population and one of the world's youngest. Nigeria boasts some of Africa's strongest network coverage and mobile communication infrastructure. The percentage of people who use the internet is currently above 70%, and it is expected to continue to rise.
• According to various statistics, the number of smartphone users in Nigeria ranges between 25 and 40 million. Mobile devices are used to access the internet more frequently than desktop computers. In 2019, mobile devices accounted for over 70% of internet access, with this percentage considerably greater for online marketplace visits.
• According to the National Communication Commission (NCC), most internet users are shoppers, and mobile network coverage is currently estimated at 77%. In Nigeria, 89 percent of internet users purchase online, with another 24 percent planning to do so in the near future.
• To fully realize its digital potential and create millions of jobs, the government must continue to invest in infrastructure, enhance skills, and execute investment possibilities, among other things. Furthermore, the poor adoption of online payments in Nigeria, as well as the rest of Africa, may have an impact on digital commerce.
• The total number of internet subscriptions recorded across mobile, fixed wired, and Voice over Internet Protocol (VoIP) as of April 2020 reached 138.7 million. This is, however, as broadband penetration, which drives internet access and connectivity, dropped from 39.90% in March 2020 to 39.58% in April 2020, according to the latest statistics released by the Nigerian Communications Commission (NCC), the telecoms industry regulator.

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