With many e-commerce platforms springing up in Nigeria, there is little doubt that e-commerce is the next big thing. Here we got Dika Oha, an expert in the e-commerce industry to take us through the past and future of e-commerce in Nigeria as he knows it.
OTEKBITS: Hi, can we meet you?
Dika: My name is Dika Oha and I’m principal consultant of “eos-GENSERV” as well as ceo of Ecommerce Outsource Company Ltd (EOS).
OTEKBITS: Tell us about your company, EOS.
Dika: EOS is multi-faceted e-commerce service provider spanning key areas such as logistics, payment management, technology, SaaS (software as a service), e-commerce advisory (GENSERV) and total e-commerce (end-to-end services). So while this sounds like an endless list of services, I must say we do not necessarily provide every form of service ourselves. For example, payment management is an offline model (CoD) and if you don’t know what to do with online payments, we advise you. On the logistics end, we do lastmile delivery only for now and are planning to roll-out order fulfillment later in the year.
OTEKBITS: What is your e-commerce background?
Dika: I’ll say it started in 2004, actually I’ll say that’s when my career began. Three or so of my friends and I started a company called “the Food Company”. It had a lovely mission statement: to take out the stress in shopping for local food stuff. We set out to interpret this in the light of the day we lived in and so it really wasn’t e-commerce but smart-commerce. We sold subscription plans to customers over the phone or physically and we delivered your monthly shopping list every other month and got paid on delivery, simple! The business died because we couldn’t scale or raise money and maybe we were way ahead of our time.
I took a break from all things commerce till 2010 when I founded the first group buying business in Nigeria called Groply. We had issues raising money because it was in the heart of the recession and I wound-up the business in 2011 and joined to build DealDey with its founder. DealDey was where we invented Nigeria’s brand of e-commerce and service delivery, those were exciting days. Ofcourse DealDey helped birth Konga which I had a hand in.
OTEKBITS: As an expert, what do you think the challenges facing e-commerce in Nigeria are?
Dika: Well, I believe I have done a terrific job at the last Mobile Monday event and the presentation can be found here, but a quick add: As a nation, we generally have issues with building and maintaining the right infrastructure in all aspects of life. This has trickled down to all sectors and the only way to make a sector, particularly a private-led one, is to have smart companies rise to the challenge. In telecoms some smart companies started co-locating the base stations and lowered Opex/Capex overall. E-commerce must do same to move forward. And if you think this sector is a joke then you must take a refresher course in Nigeria’s economics. Look at the numbers: $400B+ in GDP 2013 estimates and about 70% of that is contributed by some trading of the sort, which is same as commerce. Let’s assume that in 5 years e-commerce will grow and control a 2% of the general 70% (and all of this is assuming Nigeria is not growing, non-oil sectors are also not growing and barring any inflation rates), we’ll be talking $5.6B in turnover. So it’s not a joke and this, as you can see, is conservative.
This will not happen if we don’t come together and I mean all stakeholders (banks/payment players, logistics players, startups, venture capitalists, etc) and fix the problems. Please read my presentation about these challenges.
OTEKBITS: In your opinion, how can e-commerce work better in Nigeria?
Dika: I believe I have done justice to that already. But to recap, banks, payment companies, logistics companies, venture capitalists and smart startups need to come together and fix these problems of lack of trust, poor infrastructure and HR issues in the sector. Finding smart people to employ in e-commerce is a nightmare, they merely don’t exist. By and large, if any bank exec is reading this piece of interview, my advice is to take this sector probably more seriously than you took the telecoms more than 10 years ago. Help build trust by working with smart startups. Challenge them to build killer apps for payments that bring into consideration all the security features you love and all the ease of use the consumer/merchant loves. This has been done elsewhere.
My understanding is that only the banks can drive this and that’s scary. Logistics firms need to modernize here. Out-of-home advertising companies need to rethink their monetization strategy. They can do revenue share and help drive massive confidence and publicity particularly when a billboard is unutilized. Local blogs and news sites can do same. The pot can be as large as we make it.
Anyone who has spent $5,000 to $10,000 per annum in brick and mortar rents must seriously consider clicks (e-store) and become what we term as “clicks and mortar”. Our upcoming PaaS mentioned earlier can help with this transition affordably and sustainably.
OTEKBITS: What do you think the future of e-commerce in Nigeria is?
Dika: I have mentioned that it’s an approx $5.6B market in 5 years, my estimation of how long it takes for an emerging market to reach the tipping point (India and Brazil towed this path). In the future we will go beyond just selling online, the traditional Amazon style, to engaging mobile, social and niche communities. 90% of e-commerce players will be found here and if you look at the mobile penetration numbers, then you will begin to see how $5.6B can become a reality, but it’s my opinion that it will take this long to happen.
In the future, our cities will be very complex societies and the workforce will always be pressed for time and more and more will transact online. The growth and urbanization numbers support this. The rural centers will shop online too because of lack of access to goods and services. The internet of things is another area with next-gen topics like matternet, 3D printing and teleportation. The future of the world, Nigeria inclusive, will be very interesting times to live in. The internet of things is where physical matter is routed globally at scale as data is currently routed today, pretty futuristic stuff. But in the future, you and I will do a lot of our shopping online.
OTEKBITS: List your top 5 E-commerce in Nigeria?
Dika: I don’t want to be politically incorrect. E-commerce companies I love without any order of preference are: DealDey (Nigeria’s fab.com), Simply Infants (not sure you’ve heard of them but they are an ubercool place to shop for new borns), Jumia (amazing growth), Kaymu and Pricecheck (I love them equally for their powerful potentials and what they can do for the eco-system), and glamour.com.ng (excellent service delivery). I also love Konga.com as an extra, yup!
Looking at the chat above we can clearly understand the stage e-commerce is in Nigeria, especially when it comes to payment aspect which is the crux of e-commerce. Drop your comment below if you have anything to add.
