A subtle price war has begun among online retailers jostling to attract the attention of Nigeria’s online shoppers, writes DAYO OKETOLAThere has been a strong positive sentiment towards online shopping in Nigeria; at least among the over 40 million Internet population, many of who live in the urban centres. The latest MasterCard Worldwide Online Shopping Survey, which corroborated this, reveals that 92 per cent of Nigerians surveyed had shopped online three months before the survey was conducted. Fifty-seven per cent of them, according to the survey, indicate that they will continue to make purchases online over the following six months.
The survey, which measures consumers’ propensity to shop online, reveals that 59 per cent of Nigeria shops on international websites. However, the survey reveals that opportunities abound in the country’s e-Commerce space and more Nigerians are willing to shop locally.
Thirty-eight per cent of Nigerians, the survey says, believe that buying through a Nigerian website will be faster; 33 per cent think it will more convenient and another 32 per cent believe that it will be cheaper.
The Country Manager, West Africa, MasterCard Worldwide, Mrs. Omokehinde Ojomuyide, says, “These findings are an obvious note for entrepreneurs that Nigerians who are shopping online see the value in purchasing locally, which creates a considerable business opportunity for them to enter this exciting retail sector now, while it is still its early growth stage.”
It is, therefore, not surprising to see online retail platforms springing up everywhere with different value propositions aimed at attracting customers and retaining them. From free delivery to pay-on-delivery and discount offerings, online retail stores have been in a subtle contest to grab market share in Nigeria’s fledgling e-Commerce space. This has, however, taken a new dimension as they engage in price war to toughen the competition.
A check on the trend by our correspondent reveals that many of the online retail stores offer different prices for the same products.
For instance, while Konga.com sells a white BlackBerry Bold 5 (9900) at N85, 500, Jumia.com.ng offers the same phone for N76, 000. Though Apple iPad 1 (16GB) is sold at N89, 500 on Konga.com, it goes for N85, 000 on Jumia. The same goes for Nokia Lumia 900, which sells at N90, 000 on Konga.com and 88,000 on Jumia.com.ng.
A look at the home appliance category shows that though some of the products available on the online stores are the same, their prices differ. An LG refrigerator (312 Platinum Silver) goes for N78, 000 on Konga.com and N76, 500 on Jumia. Similarly, a Samsung refrigerator with top freezer (RT 37) goes for N102, 500 on Konga.com and N106, 600 on Jumia. In the same vein, the Samsung air-conditioner 2 H-P split unit (AS18UUA) goes for N90, 625 on Konga.com and N93, 850 on Jumia.
Buycommonthings.com, an online grocery store which competes with other online stores in that category, posts diverse prices as against what other online stores offer for groceries.
While buycommonthings.com sells a 500 gram Nestle Milo Energy Drink at N695, Konga.com sells same at N760. A 450g Bournvita beverage goes for N645 on buycommonthings.com and N725 on Konga.com. Similarly, a Tetley Decafeinated Tea (80 bags) is on offer on buycommonthings.com at N735 and N870 on Konga.com.
While a 100ml bottle of Givenchy frangrance for men is sold at N11, 700 on Konga.com, it goes for N12, 300 and N14, 300 on Jumai.com.ng and glamour.com.ng.
Though the book, ‘There Was a Country’, written by Chinua Achebe, goes for the same price on Jumia and Konga, many of the products across all the categories are labelled with different prices even when the specifications and quality are the same.
The Chief Executive Officer, BuyCommonThings.com and former CEO, Cards Technology Limited, Mr. Olumide Olusanya, does not mince words about the company’s pricing strategy.
According to him, his new online retailing platform is aimed at saving consumers time and money. Aside from raising the standard and capturing the online retailing space with service delivery, Olusanya says he would have achieved his goals on the day shoppers compare products’ prices on their mobile phones and opt for buycommonthings.com.
For him, offering cheaper prices remains a key strategy for the company; adding that the online grocery retailer will save its customers time, stress and money by offering 100 per cent free same-day doorstep delivery.
Olusanya said, “One of the things the Internet does is that it makes pricing transparent so you can compare prices. The day you begin to see customers here using their smartphones to open BuyCommonThings.com’s site to do comparisons while shopping in the large grocery outlets is the tipping point for the realisation of our vision.”
The co- founder, Jumia.com.ng, Mr. Raphael Afaedor, says in its few months of existence, the online retail store has developed exclusive partnerships with international and local brands through certain brand and marketing affiliations, with the ultimate goal of being the one-stop shop for unbeatable deals both online and offline.
Afaedor observes that right pricing remains a veritable strategy for retaining the company’s customers.
It will be recalled that Jumia introduced the ‘SuperDeal’ promotions in December and the company’s co-Founder, Mr. Tunde Kehinde, says customers enjoyed discounts of up to half prices of whatever product they bought. The company also offered free shipping services on all items purchased.
Though Kehinde described the initiative as a way of making ‘shopping a delightful experience’, analysts consider it a competitive strategy which is not too far from the ongoing price war among online retailers.
According to the Chief Executive Officer, Konga.com, Mr. Sim Shagaya, there are about 70 online retailers in Nigeria, selling everything from books, food and shoes to even used cars.
He says, “I welcome the competition and Nigerians likely do as well because it means competitive pricing; and when it comes to shopping, they, like everyone else, love a good deal. The immediate sort of objective is to give the Nigerian customer the best price, the best convenience and the best selection of goods that anybody else can give them in Nigeria; whether they are online or offline doesn’t matter.”
The Konga.com boss reiterates that low prices remain a major benefit customers will enjoy when shopping online.
He explains that the minimal overhead costs of an online retail platform, compared to physical shops, allow online retailers to sell at lower prices than physical retail establishments.
There are enormous opportunities for e-Commerce growth in Nigeria, according to experts. In fact, they say the country’s over 105 million mobile phone users represent a great opportunity for e-Commerce development; adding that many of these people will shop online on their cell phones in a not-too-distant future.
Startup Partners Africa, a new e-Commerce investor in the country, agrees that the country holds huge potential for e-Commerce development. The Chief Executive Officer, sunglasses.com.ng, a subsidiary of SPA, Mr. Jaime Moreno, says, “With about 50 million Internet users in the country who are going to be demanding different products online and an emerging e-commerce landscape, the opportunities for growth are enormous. This should stimulate the e-Commerce ecosystem in Nigeria as more e-Commerce companies continue to spring up.”
Ojomuyide, the MasterCard country manager, advises online retailers to enhance their platforms. He notes that 78 per cent of online shoppers in the country will be encouraged to shop online by more user-friendly websites while 76 per cent will be encouraged by enhanced payment security and 60 per cent by reduced service charges.
Punch Nigeria
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