It is beyond pay-on-delivery: “More than a decade after e-commerce began to take root in Nigeria, industry leaders now say one of the sector’s earliest features—Pay-on-Delivery (POD)—has become a major barrier to growth, profitability, and long-term sustainability. This concern was a central theme at the E-commerce and Payment Forum, hosted by the Lagos Business School, where operators and analysts stated that POD, initially introduced to win over skeptical consumers, is now hindering progress and deepening losses for platforms.”
The #1 problem in the Nigerian B2C ecommerce which I noted in my seminal article about a decade ago in Harvard Business Review is LOGISTICS.
Simply, it is about the marginal cost, the cost of serving an additional user. When a country does not have the postal service, that country does not have the platforms for B2C ecommerce development. Yes, without the United States Postal Service, Amazon would have struggled. The USPS has not recorded a single profit in the last 20 years, and that is so because the US government has been subsidizing logistics to grow digital commerce.
Register for Tekedia Mini-MBA edition 17 (June 9 – Sept 6, 2025) today for early bird discounts. Do annual for access to Blucera.com.
Tekedia AI in Business Masterclass opens registrations.
Join Tekedia Capital Syndicate and co-invest in great global startups.
Register to become a better CEO or Director with Tekedia CEO & Director Program.
China has been doing likewise with massive subsidies in supply chain and logistics. But Nigeria does not have a good postal service to remove that logistical friction, and that means that NO B2C ecommerce company in Nigeria operates a nationwide playbook. The implication is clear: there is no B2C ecommerce company in Nigeria; what we have are area-based B2C ecommerce companies which operate in few cities.
But get this: players, your problem is not pay-on-delivery. Your challenge is that there is no record of B2C ecommerce company that has become profitable anywhere in the world without a functional national postal service and/or executing a double play strategy where they extract value from ecommerce via another vertical as Alibaba does with Alipay, and Amazon did with AWS on ecommerce. But a pure play B2C ecommerce in Nigeria is largely hopeless!
---
Register for Tekedia Mini-MBA (June 9 – Sept 6, 2025), and join Prof Ndubuisi Ekekwe and our global faculty; click here.
