The Future of Online Companies in Nigeria
Keisha Ann Diamond
The introduction of the Internet has created a lot of opportunities for doing business. A lot of online companies are raking in millions of dollars in revenue. This trend has found its way into Nigeria in recent years.
There are lots of Internet business models but two are very popular in Nigeria: E-commerce and Blog Advertising.
E-commerce
This refers to trading of goods and services on the Internet. A few years ago, Nigeria’s first e-commerce companies emerged. This business model solves the following problems:
Convenience: You can order for a wide range of products from the comfort of your home and have them delivered to you in days.
E-commerce businesses offer various options to choose from. Also, in aiding customers to reach their target product on time, e-commerce companies provide a means of sorting through the large collection of products.
Discounts: This is another interesting feature of online retail stores. Many products are sold at lower prices compared to prices sold at brick and mortar stores (i.e. stores in physical buildings). Also, if the product is sold directly by the company, you can be assured of both good quality and low price.
The e-commerce market in Nigeria was valued at 1.3 billion dollars. This can be easily grasped when you consider the number of Internet users in Nigeria. The data below is a statistics for e-commerce in Nigeria.
Table 1: E-commerce statistics in Nigeria
| Absolute market size (USD) | Sales per citizen (USD) | Growth (%) | Number of Internet users | Internet Penetration (%) |
| 210,080,000 | 1.50 | 25 | 67,101,452 | 37.59 |
Nigeria’s e-commerce is growing rapidly, riding on the success of the Internet. It is still young in Nigeria and is expected to grow in coming years.
According to Mr. Oluwaseyi Adepoju, “Business is changing & its high time brands knocked on customer’s doors with the best offer, with E-commerce the knock is polite “@Oluseyi_Adepoju”
Blog Advertising
This type of Internet business doesn’t sell anything. It offers its clients visibility to their customers.
A typical example is the Linda Ikeji Blog. When a website offers content that is valuable or entertaining to the public, it draws followers. For the Linda Ikeji Blog – a blog that had an average of 250,000 page views per day back in 2014 – this has been the case.
The owner, Linda Ikeji, generates revenue by posting company’s adverts on her blog. The revenues are as follows:
Monthly revenue from Direct Adverts: 19,500,000 naira.
Monthly revenue from Adsense: 12,237,000.
Why would companies spend so much on a blog? This is because they want to sell to the already existing market: the regular blog visitors. These visitors rush to the blog daily to catch the latest gist and gossip. This is because the information from Linder Ikeji’s blog is always current since the company has sources on the entertainment and celebrity circles.
Nigerians have totally embraced the concept of online business. It is competing favorably with brick and mortar stores (stores with physical presence). Also, online advertising is eroding the profits of paper adverts.
With the availability and convenience in e-commerce as well at the ready audience in the case of blog advertising, it is safe to say that online business is the business of the future in Nigeria.
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True to that. It’s a fast growing sector considering our population, esp the youth, and with Africa being the next frontier the sector really holds a lot.
That been said, Konga and Jumia should merge for effective operation and faster expansion plans