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SME Guide

Click to Cash: Leveraging E-commerce to Boost Revenue for Nigerian Businesses

E-commerce holds tremendous potential for Nigerian businesses to expand their revenue streams. With one of the largest internet populations in Africa, increasing online shopping trends, and widespread mobile adoption, digital commerce channels can help companies unlock new markets and customers.

This in-depth guide covers key opportunities and strategies for Nigerian businesses to leverage e-commerce and online selling to drive profits.

Size of the Online Retail Market

The Nigerian e-commerce sector has witnessed exponential growth over the past decade. According to market estimates, the total value of online retail transactions is projected to reach $15 billion by 2025, up from just $3 billion in 2019.

With a youthful, tech-savvy population, increasing internet access, rapid urbanisation, and a growing middle class, online shopping is fast gaining traction across the country.

International players like Jumia and Konga have established a strong presence, along with fast-growing local startups and SMEs occupying all market niches, from fashion and electronics to groceries and pharmaceuticals.

The COVID-19 pandemic has further accelerated the adoption of e-commerce by Nigerian consumers, transforming it from a niche channel to a mainstream retail avenue.

Benefits of Digital Commerce Channels

Here are some of the key benefits that taking products and services online provides:

  • Access to a wider market:  E-commerce expands geographic reach beyond physical limitations, allowing businesses to target customers across Nigeria, Africa, and even globally. An online store is always open.
  • Lower costs: Online channels entail lower overhead costs compared to physical retail establishments. Variable costs like digital marketing are more scalable.
  • Data and insights: Digital commerce provides rich data on customer behaviour through analytics (purchase patterns, conversions, demographics, etc.). This supports targeted marketing.
  • Improved customer experience: features like browsing detailed product information, reviews, transactions, quick delivery, and responsive grievance systems improve engagement.
  • Enabling new revenue models: digital channels allow innovative models like subscriptions, freemium, etc. Platforms also earn via advertising, commissions, and data insights.
  • Operational efficiencies Automated order, inventory, and supply chain management through e-commerce systems improve back-end efficiency.

Types of E-commerce Models

Nigerian businesses can leverage different e-commerce models:

  • Owned online store: Having a customised e-commerce-enabled website with an integrated payment gateway puts the company in control of branding, customer experience, and margins. Requires higher investment and capability.
  • Online marketplaces: platforms like Jumia and Konga provide quick access to their existing customer base but have more competitive dynamics and lower margins for sellers. Good for testing products before investing in owned stores.
  • Social commerce: Platforms like Facebook, Instagram, and WhatsApp offer integrated shops and catalogues, allowing companies to sell through their social media presence. Provides targeted reach to existing followers.
  • Live video commerce: broadcasting live shopping sessions on apps like Instagram or YouTube lets businesses interact directly with customers in real-time. Engaging and personalised.

Key Steps for Taking Your Business Online

Successfully rolling out an e-commerce strategy involves several key steps:

Set objectives and research the market.

  • Define your e-commerce objectives: target revenue contribution, expected ROI timeline, geographic scope, etc. This aligns plans and investments.
  • Conduct market research on your industry’s online sales potential, the purchase behaviour of target segments, popular digital channels, etc.
  • Identify the right e-commerce model—your own website, marketplace, or social selling—based on your capabilities, target customers, and type of products.

Select Your E-commerce Platform

Choosing the right e-commerce platform and functionality is key to executing online sales.

  • Evaluate leading options like WixShopifyWooCommerce, etc. based on features, scalability, ease of use, and costs.
  • Ensure the platform allows you to create a customised online store with your branding. Assess themes, add-ons, and design flexibility.
  • Inventory, order, and shipping management capabilities must meet business needs. Compare fulfilment integration options.
  • Review embedded payment gateways. Evaluate transaction fees, security measures, and payment method coverage.

Optimise branding, product catalogues, and content.

An appealing online storefront and rich product content aid conversion.

  • Design an attractive brand identity, logo, images, banners, and styles for the e-commerce store aligned with its positioning.
  • Professionally photograph and describe products in detail with specs, usage, size guides, unique value propositions, etc. Follow category and metadata standards.
  • Curate engaging, SEO-optimised content like blogs, videos, guides, etc. to draw customers and establish thought leadership.

Enable Payment, Delivery, and Support Channels

Integrating secure and convenient payments, reliable fulfilment, and responsive support is crucial.

  • Activate payment options like cards, bank transfers, mobile money, etc. via payment gateways like PaystackFlutterwave, etc.
  • Partner with third-party logistics providers or your own delivery fleet for prompt order fulfilment across target locations. Provide accurate shipment tracking.
  • Provide responsive customer service via channels like chat, email, social media, etc. Track the net promoter score (NPS).

Market your e-commerce store

Promote the online store and offerings through digital and traditional channels:

  • Run searches on social media and display ads targeted to your audience’s personas and geography.
  • Email marketing to existing customers announcing the e-commerce platform and new products or offers
  • Leverage influencer marketing by engaging niche bloggers, YouTubers, etc. as affiliates to promote products.
  • PR campaigns in business, retail, and tech media on the e-commerce rollout, value proposition, etc. gain visibility.

Track performance and optimise

Continuously track e-commerce KPIs using analytics and optimise:

  • Key metrics: sales, traffic, conversion rate, average order value, customer acquisition cost, churn, etc.
  • Tools like Google Analytics and Hotjar provide insights on customer behaviour—landing pages, devices used, drop-offs, etc.
  • A/B test elements like product descriptions, pricing, promotions, checkout processes, etc. to improve conversions.
  • Plug observed gaps in payments, delivery, after-sales service, etc. based on customer feedback surveys.

Leveraging marketplaces to test and diversify

Listing on popular e-commerce marketplaces like Jumia and Konga allows Nigerian businesses to get started quickly with lower investments.

  • Tap into the marketplace’s existing customer base and benefit from their brand equity and promotions.
  • Test demand and optimise pricing, product images, etc. before fully developing your independent store.
  • Gain experience managing higher order volumes, fulfilment, returns, etc. on a controlled scale.
  • Marketplace analytics provide data to identify best-selling items, trends, etc.

However, aspects like lower margins, lack of control, and competitiveness should be evaluated before selecting this route. Marketplaces work best when integrated with other channels, like social selling.

Harnessing social commerce

Social platforms present low-barrier opportunities for Nigerian businesses to enter e-commerce.

  • Facebook Shop simplifies creating digital product catalogues on Facebook and Instagram, which followers can browse and buy without leaving the app.
  • Sell to your target audience directly via Instagram Shop, shoppable posts, and drops.
  • WhatsApp Business enables the creation of product catalogues and carts for users to browse and order via chat.
  • Live video commerce on Instagram or YouTube lets you demonstrate and sell products in real time to followers.
  • Influencer marketing involves engaging niche bloggers and creators to endorse and sell your products to their followers.

Building a follower base across social channels provides ready e-commerce demand. Turn your existing social media presence into sales touchpoints.

Adopting digital payments

The wide adoption of mobile money platforms and improved digital payment infrastructure have enabled e-commerce growth in Nigeria.

  • Integrate mobile money platforms like OPay, PalmPay, and Paga, which have widespread usage for digital or cash-on-delivery payments.
  • Offer card payments via payment gateways like Paystack, Flutterwave, etc.
  • Maintain escrow capabilities for high-value items to secure funds until customers receive satisfactory delivery.
  • Support bank transfers and integrate solutions like Pay with Bank Transfer for a seamless customer experience.

Prioritise payment security and data protection to build customer trust. Enable multiple payment modes with clear refund policies.

Evaluating logistics and fulfilment

Smooth order fulfilment makes or breaks e-commerce success. Some key factors for Nigerian businesses:

  • Assess the last-mile delivery reach of logistics partners like DHL, FedEx, Sendy, etc. to target locations. Provide accurate transit estimates.
  • Implement hyperlocal delivery to improve lead time in major cities via bikers or startups like Max, Metro Africa, etc.
  • Provide multiple delivery options—next day, same day, scheduled—based on the customer’s willingness to pay. Offer in-person pickup for nearby customers.
  • Set up local distribution centres to reduce long-distance shipping and costs. Integrate order management for optimal routing.
  • Leverage apps and sites like Sendbox, which allow customers to select the closest pick-up points.

Getting fulfilment right requires balancing costs, convenience, and reliability. Maintaining visibility through shipment tracking builds trust.

Optimising for Mobile Commerce

With over 200 million mobile subscribers, Nigeria has more users accessing the internet via mobile than any other device.

This makes optimising the shopping experience for mobile critical:

  • Adopt responsive web design to dynamically adapt sites for optimal viewing and navigation across mobiles, tablets, and desktops.
  • Target mobile marketing via social media apps, messaging platforms, and ads tailored for vertical video, etc.
  • Design app-like interactions (bottom navigation, filters, personalisation, etc.) on mobile sites to ease engagement.
  • Enable mobile money payments, charts, and Express Checkout to simplify transactions.
  • Optimise page loading speed through image compression, reduced redirects, etc. Slow mobile sites lose customers.

Seamless mobile commerce experiences give Nigerian businesses the platform to tap nationwide demand.

Leveraging digital exports

E-commerce provides an avenue for Nigerian businesses to access demand beyond African shores.

  • Listing products on global marketplaces like Amazon, eBay, Etsy, etc. opens avenues to sell across key export markets.
  • Using cross-border eCommerce solutions from DHL, FedEx, etc. makes logistics to the US, Europe, and Asia more seamless.
  • Multi-currency transactions and global payment gateways like Stripe facilitate international sales.
  • Social commerce on Instagram and TikTok provides targeted reach to foreign buyers looking for African goods. Use influencer marketing.
  • Participate in international trade fairs and eCommerce conferences to attract foreign buyers.

With the right partnerships and digital capabilities, Nigerian products—fashion, food, arts, crafts, etc.—can find worldwide demand. Global commerce is the digital highway to expanded exports.

Managing risks and limitations

When embracing e-commerce, Nigerian businesses should develop strategies to address key risks and limitations:

  • High product return rates: clear return policies, sizing guides, and product demonstrations aid buyers. But prepare for higher returns than offline.
  • Cash on delivery issues: fraud checks for CoD, the option of upfront partial payment, and using escrowed mobile money mitigate risks.
  • Cybercrime concerns: invest in data security, SSL certificates, and partner with trusted payment gateways to minimise fraud exposure.
  • Patchy internet connectivity: Ensure sites are lightweight and streamlined for optimal performance on slower networks. Offline caching helps.
  • High logistics costs: enable multiple delivery options for customers to optimise willingness-to-pay vs. costs.
  • After-sales service: Develop capabilities to provide timely online support for product issues to avoid returns and claims.


Online commerce channels offer attractive growth opportunities for Nigerian businesses in the post-pandemic digital-first economy. With the right strategies and execution, companies can unlock new customers, enter new segments, and expand to new markets via e-commerce. Building capabilities on selecting the optimal sales platform, payments integration, online marketing, supply chain operations, and data-driven consumer insights will provide a competitive edge. Patiently educating consumers and ironing out frictions that erode trust will pave the path to sustainable e-commerce success. The digital commerce wave is here for businesses big and small to ride.

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