There is no denying the impact technology has on Nigeria’s economy, and even globally. It isn’t more about trends now, but an awareness that can be compared to the shifting of communication from landlines to mobile devices.
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Broadband Penetration, simply put, is the number of subscriptions to a fixed or mobile broadband service. Meaning, the number of people connected to a wireless network.
The connection between broadband Penetration and e-commerce is hard to overlook. As a matter of fact, the latter only exists on the foundation of the former.
In Nigeria, the broadband penetration rate stands at 50% (with about 104.4 million users), a number that shot up by 19 million between 2020 and 2021. That’s almost a 22% increase and it’s projected to rise even higher in the coming years.
We live in the digital and e-commerce era, so an increase in broadband Penetration is necessary (perhaps even compulsory).
Most people buy their beauty products online as well as order for their vehicles to be branded, and these days most people only visit a physical store simply because they miss that ‘nostalgic’ feel and smell, just like reminiscing on the days of black and white photos.
However, this doesn’t stop the massive growth of e-commerce in Nigeria.
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Growth Of E-commerce In Nigeria
Facilitated and strengthened by a fast-growing youth population in Nigeria as well as effective international trade and an efficient maritime economy, e-commerce in Nigeria has experienced a boom in the past decade. This is also helped by the increased broadband Penetration and expanding consumer power. Let’s face it, a lot of people still didn’t know how the Internet worked ten years ago. Today, a lad can order shoes online with their smartphone.
The estimated e-commerce spending in Nigeria is about $12 billion, with revenues of $6.12 million with an estimated annual growth of 11.78%.
By 2025, these numbers are projected to rise exponentially, from $12billion to $75 billion. Simply put, a lot of people are going to be buying more stuff online. That is where a strong broadband Penetration comes in.
Over 31% of e-commerce purchases are made by bank transfer and most of which are done through mobile devices.
The number of users in the e-commerce market in Nigeria is expected to amount to 122.5m by 2025.
With the recent boom in the FinTech sector, e-commerce has experienced a surge and with social commerce now a thing, being able to make a product purchase from a third-party company via social media and also the integration of cryptocurrency into transactions, e-commerce activities will continue to increase.
Featured Image Source: Businessday NG
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