Before the Covid-19 lockdowns, have you ever wondered why the spare parts dealer at Oshodi, who doesn’t have an online presence or understand the internet, still manages to take in huge sums every day from his shop?

Have you ever wondered why the trader who sells dresses from her vehicle in the evening at car parks and junctions, generates more revenue than some Instagram fashion sellers?

Computer village, a computer and electronics market in Ikeja handles a significant volume of trade per month than most e-commerce marketplaces. Offline megastores and supermarkets accrue more in revenue than comparable online stores.

While you ponder on this, the goal of this article is to answer the following questions. 

Have the factors that have prevented the adoption of online shopping and digital channels in Nigeria and across the continent changed Post Covid-19 Lockdowns and if these factors have changed, is the hustle among Nigerian businesses for sales growth offline or online and what can businesses do about these changes to drive growth?  

 

Let’s take a little step back. 

THE ONLINE REVOLUTION –

The 21st century ushered in a huge technological disruption – the internet, with the push of a button, brands can promote their products and services, reach a large audience and gain visibility. With a small budget, a small business can compete for attention almost fairly with big brands; the internet is indeed gradually levelling the playing field. But despite this disruption, 3 major factors seem to slow down the adoption of digital solutions and online channels in Nigeria.

 

FACTOR 1. Accessibility – A Majority of the Market is still Offline? 

Despite the exponential growth in internet penetration, a large number of Nigerians are not yet online. For those online, they are still trying to understand the online system. Out of a population of 200m people, only 26 million Nigerians are on Facebook, the number is even lower for twitter. According to The Global Findex Database 2017, only 40% of Nigerian adults have an account with a financial institution or a mobile money provider. 

 

FACTOR 2. Culture – Instant Gratification – “Buy, Pay Cash and carry” is still King? 

People are in a hurry and crave instant gratification but online channels are yet to keep up with the instant gratification that offline channels present: “I see it, I like it, I buy it and take it home with me” is still the norm. According to Google’s Consumer Barometer, 22% of global consumers purchase products or services online, while the remaining 78% stick to offline. 

 

FACTOR 3. Trust – People are less trusting of online channels:

Issues such as poor infrastructure, security concerns, and the perceived risks that come with online transactions have led offline channels to still command more trust than online channels. A chunk of Nigerian consumers is still very distrustful of online payments and the authenticity of product quality displayed by online merchants on e-commerce sites. A typical example is a fact that Nigerians still prefer payment on delivery than paying out rightly for goods bought online.

Post Covid-19 Lockdowns – Have these factors improved for the better?

In Nigeria, Jumia reported some sales increase in Q1 2020. This is not the same for many SME and MSMEs who reported major losses during the 2-week – 1month lockdown period in Nigeria because they could not make their products available to customers online. As the Nigerian government begins to lift lockdown and movement restrictions, the increased relevance of e-commerce channels during the COVID-19 Lockdowns coupled with other tough lessons from the crisis is making it evident that to thrive in a Post Covid-19 Lockdown world, businesses will need to think critically about how to leverage online channels to thrive.

However, as businesses embark on this transition to adopt online channels to be resilient, it is very critical to ask a more prominent question and consider: how are the increased relevance of digital channels during the COVID-19 Lockdowns coupled with other tough lessons from the crisis affecting some factors that have long held the adoption of online shopping and e-commerce in Nigeria down.

Post Covid-19 Lockdowns effects on factors affecting online adoption in Nigeria-

1. Accessibility- Online engagement is rising, but the majority of the market is still Offline.

Internet usage during the Covid-19 lockdowns generally increased with a lot of consumer spending time on social media platforms such as Instagram and Facebook and even TikTok. MTN Nigeria reported a rise in mobile data users. While data on the percentage of purchases made through social media channels in Nigeria is still unavailable, it is safe to conclude that these channels can be promising avenues to recruit customers into e-commerce since the more consumers spend time and get comfortable with digital platforms, the more they understand and trust the platforms.

2. Culture – Instant Gratification remains unchanged –

“Buy, Pay Cash and carry” is still King: The COVID-19 lockdowns has had little impact on this especially for grocery items and essential homecare products. During the lockdown, consumers were still found visiting open markets to purchase essential items rather than wait long delivery times as is custom with Nigerian e-retailing.

 

3. Trust – Low trust in online channels remains unchanged:  

The perceived risk of online has not reduced significantly post COVID-19 lockdowns. There has not been any major improvement in infrastructure and security concerns have instead increased with many users reporting a rise in cybercriminals trying to gain access to their bank accounts through BVN scams.

What does this mean for businesses?

Should the hustle among businesses for sales growth be directed offline or online and what can businesses do about these changes to drive business growth?  

 

There is no one answer, the hustle for sales growth is both offline and online. Businesses will need to adopt a multi-pronged approach that leverages the benefits of both online and offline channels to grow their business. 

 

Some businesses will benefit from investing their resources toward an online-centric strategy, this means for such businesses it would be beneficial to optimize their online sales and marketing channels, while some will achieve success with a more active offline centric channel strategy, they might need to allocate resources to offline or traditional channels to drive traction.

 

 

FINDING THE RIGHT BALANCE BETWEEN ONLINE AND OFFLINE CHANNELS. 

One thing is certain post-COVID-19 lockdowns businesses will need a combination of both online and offline channels to thrive, they will need to find the right balance to leverage the benefits of both channels to their advantage. To find the right balance businesses will need to take a critical look at their business model, where their customers are, their buying behaviour, the market and environmental forces at play in their industry. Finding the right balance is very important, the COVID-19 lockdowns was just a wakeup call.

If you enjoyed reading this.

Share this article

Register to attend our Quarterly Bootcamp.

Nothing found.

Learn more about how we help businesses grow online or offline.

Click here