Over the years, I have consumed so many articles with concrete proof stating that no single e-commerce store in Nigeria has broken the jinx of profitability, not even the almighty Jumia, Konga, and Dealdey. These big e-commerce stores are still struggling or are about to fold up. This had me wondering what the cause may be; could it be logistics, warehousing issues, price stability, wrong hiring or product listing to catch the right market demands?
Well, according to a research by www.timetrade.com, it stated that about 85% of shoppers till date still prefer to shop in physical stores as opposed to shopping online despite the rapid growth rate in the e-commerce niche in Nigeria and Africa as a whole.
One funny thing people don’t know is that every digital inclined technological conscious business does business online; from posting your products online, to referring someone to purchase a product online e.t.c. could be directly or indirectly linked to e-business or e-trading, better known as e-commerce. You then wonder why the popular e-commerce stores do not have their own physical stores or brick and mortar stores.
From my own perspective, there is absolutely no need for an edifice to accommodate their physical stores, no need to worry about construction and all its affiliates when it comes to erecting a new physical store. Their warehouses could actually serve that purpose and they could make it a strictly commission based stores, where all registered users can just walk-in and register and have their goods placed in the physical store spaces allocated to them without paying rent money. The e-commerce store on its part then has a fixed commission percentage it fixes on all goods which have been placed in the physical stores and deducts such commissions after every successful sale of such goods.
There is a need for major e-commerce stores to consider an omni-channel means of scaling their business models, one of which could also include third party logistics services and not just in house logistics services. Imagine having a Black Friday in a physical store; Lagos would be closed down for days due to traffic gridlock problems.
This model works both ways; imagine already existing profiting brick and mortar stores now having fully functional ecommerce stores, what do you think would happen if a company like Shoprite that is already profitable now opens an Amazon like kind of e-commerce business? Great profits if the ropes are well tied and spawn to eliminate loose ends.