Nigeria, South Africa e-Commerce boosting international trade – Experts

A leading e-commerce payment gateway,‎ PayU Nigeria, has stated that e-commerce in Nigeria and South Africa is increasing trade across nation’s borders and opening more people to active trade in the two nations and beyond.

According to PayU Nigeria’s Country Manager, Juliet Nwanguma, the e-commerce payment landscape in Nigeria is sophisticated and unique with intense competition, cooperation and innovation among market participants at all levels.

Nwanguma ascribed the success to improved regulatory oversight, increased awareness by consumers and stakeholders, and the growth of channels for transactions.
In addition to this are an organised retail industry, a growing Nigerian middle class, the obvious appeal of convenience and an e-commerce recipe that South Africa can look to replicate.

As the Nigerian economy and population have increased, so have the volume of electronic transactions, Nwanguma said. Nigeria’s total payments volume for 2014 was $222 billion, amounting to more than 526 million payment transactions in total; mobile and web payments equaled roughly 10 per cent of that amount.
“What we see at the cold face is that cross border transactions between South Africa and Nigeria are showing significant increases and this could play a pivotal role in the further development of the e-commerce market in both countries. Wider e-commerce success very often follows other mobile money services prevalent on the continent,” Nwanguma said.

According to a recent study conducted by Ipsos, a global market research company, cross-border shopping is a growing trend with around 80 per cent of shoppers going international when purchasing goods online.
“In Nigeria, an impressive 47 per cent  of the online spend is already taken internationally, while in South Africa shopping across the continent continues to rise in popularity. The two countries are playing no small role in boosting eCommerce on the continent, offering a much-needed shift that can potentially have a positive impact on both economies,” the research firm noted.
Meanwhile, the Worldpay Global Payments Report 2015, found that the current global eCommerce market is worth around US$1.66 trillion with an expected value of US$2.4 trillion by 2019 – to date. An estimated 23 per cent of this spend has taken place exclusively on a mobile device.

According to Ipsos, Nigeria, the largest market in Africa has 147 million mobile connections with internet and mobile penetration rates averaging 59 per cent, along with growing internet and mobile users at 82 million and 93 million respectively.
It added that South Africa’s internet and mobile penetration stands at 50 per cent, with 90 per cent of online shoppers owning  smart phones or feature phones which they use to complete their purchases.


“More than half do so more than once a month.  “It is the era of eCommerce for the African continent. For both South Africa and Nigeria, the burgeoning relationship that sees consumers snap up deals across international lines can be used to enhance offerings and woo a new generation of consumers to the online table.

“Currently, Nigeria leads the way when it comes to the volumes of online shoppers at 89 per cent;  South Africa comes in second at 70 per cent and Kenya in third at 60 per cent. Within these numbers, around one third of Nigerians are using South African online retailers and spending their cash across the borders.
From a regional perspective, these statistics highlight one very important fact – opportunity. The online retail market has a chance to tap into these trends and to deliver both products and services that map back to market demand’ Ipsos noted.

MTN’s Chief Digital Officer, Herman Singh, on his part, noted that to achieve mobile success in Africa, “you must deliver a service people want by following the money corridors in a country. What works particularly well in Nigeria is bill payment via mobile.”
Once you have traction, “It’s all about continuous promotion and incentives on the platform,” said Singh.

E-commerce success across Africa is never far from the mobile device. This may be the logical route to increased e-commerce volumes. “Mobile banking apps have received significant downloads by bank customers in Nigeria,” says PayU’s Nwanguma. Similarly, the rise of mobile wallets – most notably in South Africa – presents another opportunity.

According to research house Ovum, there were 102 million registered mobile financial services users in Q3 2015 across the continent. Ovum’s Thecla Mbongue also estimates that those registered users contributed 5per cent of Africa’s mobile revenues in the first half of 2015, totalling US$3 billion.

Increased consumers using mobile wallets will encourage online stores to accept mobile payments, and lead to the emergence of sustained offerings such as money transfers, remittances, agent banking and other market based solutions. Very often it’s about simplicity in payments functionality and enhanced speed.

As mobile devices deepen their penetration and mobile wallets and payment solutions continue to evolve, consumers across the continent will have an increasingly secure and reliable way of finding the best deals no matter where they may be. For South Africa and Nigeria, it is a step in the right direction and one that has enormous potential for the future of eCommerce and their respective economies.



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