Nigeria is the largest e-commerce market in Afrika with estimates predicting its size to be around $13 billion in 2018. According to some reports, this industry is likely to reach $75 billion by 2025 growing at 28% CAGR during this period.
Big investment firms like Arica Internet Group have built the Nigerian e-commerce market.
But where exactly do the local Nigerian SMEs (Small & Medium Enterprises) stand in this growth?
Helping small businesses in Nigeria
We interviewed Karan Singh, CEO of DomainKing.ng, a Nigerian domain registration and hosting company on how they are helping SMEs in Nigeria to be a part of this growth.
iAfrikan: What do Nigerian SMEs stand to gain from being online?
Karan Singh: There is so much to be gained for small businesses by being visible online. Nigeria now has 103 million users who have access to the Internet and are actively browsing online. This means that there is more than 54% Nigerians are now using internet for research and everyday buying.
E-commerce giants like Jumia, Konga, etc. have done a very good job in bringing the average consumer online. Small businesses can now take big advantage of this penetration to sell their products and services to this large Internet audience.
With access to cheaper smartphones and data, most Nigerians are now searching on the Internet for their daily buying decisions. This offers a huge opportunity for small businesses to showcase their products and services to these consumers.
Just to give you an example: Let's say that an SME runs a small family run restaurant in Ikeja that serves great food. Normally, most restaurants get new customers because of their location & word of mouth. However, if this restaurant had an online presence then it would be possible to attract so many new customers who previously never knew about them. There are over 1,900 searches every month for restaurants in Lagos and nearby areas on Google. By leveraging the Internet, restaurant owners could easily attract food lovers and convert them to their regular customers.
What are the challenges preventing SMEs to going online and what is DomainKing's go-to-market strategy to tackle these problems?
We talk with as many business owners as much possible to find the challenges that discourage them to come online. What we commonly noticed was that there is a general lack of awareness regarding the procedure and resources required for online presence.
First, most business owners think that it is really expensive to setup their website, but that’s far from the case. These days, one can setup their website with an investment of just a few thousand Nairas.
The second biggest concern the SMEs have is that they think it is a hassle to create and manage an online store or website. Normally they are worrying about the various services like shipping, safety, returns, advertisement cost, and payments in online shopping. Today, however, there are various tools that make all these steps very easy.
Many myths about challenges discourage most small business owners to come online. So educating small businesses on how easy and affordable it is to have an online presence is our priority. There is a need for hand holding during every step of the way but we cannot do it on our own.
Nigeria is a DIFM (Do-it-for-me) market.
We believe that we cannot be present in every city to educate 37 million SMEs. But local web professionals in every city can help in raising the awareness among SMEs and guide them through every steps. We found that Nigerian SMEs prefer to go to local web designers, developers to build/maintain their websites, online stores and web presence for them. So we work very closely with designers & developers in every city and empower them with tools they can use to help SMEs with their online presence.
In our effort to help our partners & SMEs grow, we try to make our products as affordable as possible. This year, we introduced our new affordable Web Hosting in Nigeria that starts from just N300/month & has all the tools for the developers and SMEs for their online presence. The hosting includes free domain name, built-in SSL for website security, unmetered bandwidth, traffic tracking, automated backup for data protection, fully managed support and many more add on services.
Given all these challenges in educating small businesses in Nigeria, what progress have you seen so far in bringing them online?
We are really happy with the growth we have made so far. We started about 4 years ago & now have over 21,000 developers, web agencies and small businesses using our platform to power their websites or to offer website services to SMEs in every city. We expect this number to grow by 80% next year.
When we started almost 95% of our clients were from 3 main cities i.e. Lagos, Abuja and Port Harcourt. For the last 2 years we are seeing higher traction even from other Nigerian cities. This makes us really excited about the future potential.
Nigeria's young entrepreneurs are very hungry to take join in on the Internet age. It is our goal to help over 75,000 SMEs get online by 2020.
Cover image credit: 2014, Victoria Island Lagos, Nigeria. Wikimedia Commons