No one doubts the rapid rise of E-commerce in Nigeria, but very few have gone as far as to predict its complete overthrow of physical retail houses in significance and patronage. Etop Ikpe is one of the few. The boss of Nigeria’s number one discount online retailer, Dealdey, believes it is only matter time before the internet becomes the primary medium of trade in Nigeria. He is not making a blind guess; in a recent interview with Ventures Africa, Etop explains why he has given E-commerce a ten year target to become the retail king of Africa’s largest economy.
For Etop, the first pointer to the eventual triumph of online retail is its cost effectiveness. He says Nigerian retail-preneurs will continue to embrace online marketing in numbers because of the challenges of establishing physical infrastructures. “I am 100 percent confident of the dominance of the e-retail sector in the nearest future. The internet has reduced the amount of money expended on setting up physical shops and the several other logistics associated with it. If there was no internet, a lot of investments in hardcore infrastructure would have been needed especially when businesses look to expand. Now, even though there’s still the need for one or two physical locations, you can see retail houses skewing towards 70-80 percent based online.”
The Dealdey boss adds that the overthrow of the e-commerce is made even more inevitable by the infrastructural constraints that the country continues to face. “Once they can access the internet, people in any part of the country can buy and pay for products online from Dealdey and have it delivered to them. So, we don’t need to build physical locations everywhere, a big advantage for the customer and us too.
However, Etop noted that a lot still has to be done to get the online retail to its full potential. He mentioned one of the main barriers to the full bloom of the e-commerce as broadband penetration, which currently covers a only fraction of the country. “Broadband penetration currently stands in Nigeria at 20 percent and a lot of it is concentrated in Lagos. Penetration really has to increase for faster growth. However, there is an estimate that broadband penetration will hit about forty percent of the population by 2016, that’s a large amount of the population. So, when you have situations like that, broadband hitting about forty percent of the population, those are all potential consumers’ right there for you to get your products and services sold. So, I do 100 percent believe that we would get there.”
Not only is Etop sure about an online overthrow of traditional retail, he’s convinced it will happen in the space of ten years. “I believe right now we are still at early adoption stage.We have passed the innovation stage where using shopping online was for the innovators, the guys who are always and willing to take the risk and shop online. I think in about three years, we will be at early majority, and I think say about the year 2020, we will then be in late majority, and I think that will ride on to about twenty-twenty four(2024), so I will say about 2024, we should see typically a large majority of the Nigerian consumers, really like a 100 percent coverage. If you take the telecommunication industry as a benchmark, you would see that as at 2001, there were about 200,000 registered lines in Nigeria and today it serves 180 million people, and that has been achieved in the phase of fourteen years, but with a lot of investment and a lot of growth. If you mirror these two industries together, and you look at, the e-commerce is private sector driven just like the telecoms. So, when you look at a scenario like that and you look at where the telecoms were in 2001 and where they are fourteen years later.
A testament of the Etop’s projection is his company’s growth. One of Nigeria’s most popular E-commerce sites, Dealdey’s subscribers base grew more than 200 percent in 2014, with its buyer base expanding above 300 percent, leading to a 100 percent increase in one year. The company is not stopping there however, Etop revealed that there are massive expansion plans that could see the company set up shop across West and Eastern Africa in 2015.