Gloo.ng’s CEO says the emerging Nigerian e-commerce site expects its revenue is to reach $1 million by the end of the year, a statistics that shows the awesome growth opportunity and potential in the country’s online commerce sector.
Having risen to Nigeria’s biggest online grocery sector, Gloo.ng has carved a space in Nigeria’s e-commerce sector, a space it is rapidly enlarging by offering products well beyond the grocery category – from household appliances to pharmaceutical products. Its progress also shows how amazingly spacious the Nigeria’s online space remains, despite the impressive size of retail heavyweights like Jumia and Konga.
Doctor turned entrepreneur Olumide Olusanya said his Gloo.ng’s revenue grew 97 percent year-on-year, and the business covers only 50 percent of Lagos – Nigeria’s commercial hub. And there’s more to it; The CEO says 80 percent of their revenue comes from repeat business. While Olusanya says this means his company isn’t spending a chunky fortune to acquire new customers (through adverts and promotions) like his rivals, it also shows the vast opportunity to make new customers.
That is the opportunity Gloo.ng is about to tap, Olusanya says, “the company will roll out services in Abuja (Nigeria’s capital) and Port Harcourt (commercial hub of Niger Delta) by the last quarter of 2015”. Even as he says much of the e-commerce site’s revenue goes into bettering logistics, rapid business growth and massive profits looms for Gloo with such expansion into other tier-one Nigerian cities.
Even for the heavyweights, expansion potential still outweighs the current size of their businesses, just as tremendous space for success remains available for incomers. Nigeria’s e-commerce market has a potential value of $10 billion, according the country’s Communications Technology Minister Omobola Johnson, but currently it seats at $550 million, a $9.5 billion space for grabs.
However, industry analysts say the sector is still hindered by crucial issues such as level of disposable income (with just a little over 20 percent in the middle class), infrastructural inadequacies, internet penetration as well as low confidence in e-payments due to fears of frauds.
With the estimated 300,000 online orders made in Nigeria only cutting across a very tiny fraction of the 170 million population and concentrated in the commercial hub of Lagos and the Federal capital Abuja, only with a better presence in the other 34 states of the country will the potentials of the sector be fully achieved.
Thus, Startups can, like Gloo.ng, venture into Nigeria’s e-commerce sector – the potential is still huge, the space is still wide. The road is not smooth though, but as the balance sheets of Nigerian e-commerce sites show, it always ends up a profitable journey for those who make a determined sojourn.
