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Internet Retail in Nigeria

Internet Retail in Nigeria. A taafoo.com’s Perspective July 30 th 2012 Dr. Femi Adebiyi. About taafoo.com. A leading online catalog retailer. Online enables us to execute our variable pricing schemes. Average of 12,000 visitors daily. (Less than 1% traffic via our mobile site)

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Internet Retail in Nigeria

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  1. Internet Retail in Nigeria A taafoo.com’s Perspective July 30th 2012 Dr. Femi Adebiyi

  2. About taafoo.com A leading online catalog retailer. Online enables us to execute our variable pricing schemes. Average of 12,000 visitors daily. (Less than 1% traffic via our mobile site) Started with 1 Product Category (Men Polos) in 2010 and has grown to over 125 Product Categories (Clothing, Shoes, Bags, Watches, Jewelry, etc) within 2 years. Over 15,000 transactions over the past 12 months via various channels. (Online, Mobile, In-Store). 1st to offer “Free Delivery” for eCommerce transactions in Nigeria. (Fast becoming a standard for new entrants).

  3. How Taafoo Got into eRetail Started in June 2006 as a Marketplace legwork.com.ng facilitating commerce between buyers & Sellers. Main competitor was (whogobuy.com, ShopForless.com) By April 2007, we transformed to a Social Media Platform with a small online shop. Grew to over 150,000 Nigerian subscribers. (In early 2008 we had more registered Nigerians than Facebook. The days of Hi-5) In 2009, .com.ng administration moved from US to Nigeria, we were billed N350,000 to keep the name, so we dropped it. Started taafoo.com in August 2009 as a twitter messaging platform for celebrities with a mobile ad platform. Transformed into a fully blown eCommerce site by September 2010.

  4. Factors Affecting Industry Growth • Explosive Growth of Internet Usage. • As of 2007, only 2.2million Nigerians were online. • Today, 5 yrs later, we have over 44 million. Thanks to Facebook.com & Blackberry (Telcos). • As of 2003, three websites in Nigeria were known to have ecommerce success. All were for checking exam results online. • Emerging middle class who are getting more fashion conscious, educated, aware of global trends and living busy, active lifestyles. • Increased usage of Debit Cards & Other Online Payment Options (CBN Cashless Society). • Increase activity in the industry. More websites popping up daily enabling awareness of Internet Retail in Nigeria.

  5. The Typical Nigerian Internet Consumer Mostly Male. Ratio of Male to Female online is about 3:1. A Browser, not a Searcher. Culturally not used to DIY. New to the Shopping Bag/Cart Concept. Very Price Conscious. More important than trust.

  6. The Impact of Facebook • Before Facebook, limited usage of the Internet purely for Job Search, Chat, Email & Research. • AdWords was the main Internet advertising channel and expensive. Limited business online, so local search was close to zero • Facebook provided a cost effective way to reach millions of Nigerians in one place and stimulate impulse purchase. • Much more affordable than Google. • Higher reach than all newspapers combined.

  7. Challenges Slow adoption of Debit Card Usage Online. Little/Non-Existences of Credit System in Nigeria. Lack of Insurance against Fraud. High Logistics Cost. Inadequate Skillset locally. High cost of Internet Access. Lack of Government laws & regulations specifically applicable to the industry. Lack of fair Venture Capital Funding. Lack of known localized trust marks. (e.g. BBB etc)

  8. Key Success Factors • Implementing Trust Processes. • Return, Exchange Policies • Fraud Prevention • Monitoring Website Analytics • Conversion Rates • Bounce Rates, etc. • Executing Effective Back Office Processes • Inventory Management. • Logistics & Delivery. • Merchandising. • Delivery on Customer Service. • Infusing Culture Habits.

  9. Alexa Rankings • Relevant if your revenue is advertising-based. Has had no correlation with Sales/growth for taafoo.com and most eCommerce sites. • No Alexa toolbar on BB. • No Alexa toolbar in most office computers. • Media house depend on it greatly, so affects your ability to monetize via advertising. • Can be manipulated if you advertise heavily in Cybercafes.

  10. The Future More Equity Capital Will Flow-in. Closer relationships between banks and ecommerce firms. Demographics is shifting, more users will use ecommerce sites naturally. Cost of Logistics will trend downwards. New entrants will bring technology innovation and competition. The Industry will generate the next wave of wealth & job creation. Less Nigerians will find a need to travel abroad to shop abroad.

  11. The Winners The winners will be those who can enable local cultural habits of Nigerians with technology within the shortest time-frame.

  12. Questions???

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