It was a Green, not a Black Friday
Friday the 27th of November, 2015 is a day to remember not just for websites, their sellers and logistics team but for many online shoppers who took the ‘black’ or ‘Yakata’ opportunity to get the best deals on products and brands at nearly rock bottom prices as promoted by each website.
Reviewing the numbers, Konga was reported by footprint2africa.com to have garnered a record sale of around N1.2 billion within 48 hours. According to Shola Adekoya, COO of Konga, average user per seconds was 25,000, sales peaked at N1 million per minute: a growth of 113% compared to 2014. Jumia was quoted by pmnewsnigeria.com to have made a good outing as well. ‘…millions of them visited our website, generating revenues that are 25 times more important than on an average day’. Yudala, Payporte and other eCommerce sites all record improved sales for the same period. By our calculation, offline retailers and their brands lost at least N4 billion worth of sales to eCommerce sites within 48 hours.
The success recorded in this year-end sales is a testament to the fact that Nigeria’s eCommerce market which as at 2013 accounted for less than 1% of the total retail sales is becoming a major force to reckon with in the retail, distribution and marketing industry. The inroad of eCommerce into the retail sector is changing the average consumer’s behaviour. The message that gets attention of online shoppers puts the name, credibility and speedy delivery/fulfillment of the website in the front burner relegating the name of a brand and its promise below price, the most competitive element in eCommerce.
Power to the Powerless
Brands with little or no measurable equity have been successfully launched on eCommerce sites with record sales on their debut. You now see Alcatel, Infinix, Innjoo, Tecno smart phones and many consumer products with short term campaigns making success online while brands with established image and distribution channel are struggling to get good sales figures. The consensus is that eCommerce exposes the weakness of ‘old’ and influential brands because of its serendipity.
In their comfort zones via any connected screen, online shoppers discover and explore new products and brands at the speed of light. To get a grand slam home run, producers/distributors offer eCommerce site(s) attractive margins often in exchange for guaranteed volumes. The more compelling the margin, the more aggressive the site pushes the brand across media channels. While it takes months to plan an offline launch, it only take weeks or few days to plan a launch or promotion with a trusted site. Depending on category and product type, the entire inventory can be sold off within hours or few days.
To further disrupt the retail landscape, eCommerce sites like Konga opened up its platform to over 30,000 sellers who in turn sell: from big brands to the most unknown names. Series of data prove that brands and products that would have gathered dust on brick and mortar shelves do good numbers online because of the smart online and offline marketing tactics deployed by eCommerce sites. While many established offline retailers are joining these crop of retailers, there are many first-time and eCommerce sellers who are mostly oblivious to many brand owners.
For Price and Discounts: Customers Make it Rain
Except for prepaid mobile credit, Nigerians are not known to pay for products and services they have not possessed, but eCommerce sites are changing that. Their initial model of cash-on-delivery expose them to cash handling and security risks. The appreciating level of credibility enjoyed by these sites affords them go into prepaid model via mobile wallet with special discounts and premium services for customers who opt for it.
A tweet by Sim Shagaya, Konga’s Founder, claims that KongaPay, its new payment method that will allows its customers pay for stuff without using debit cards, processed more sales on its Yakata sales than any other payment option. With Konga’s unfolding success with KongaPay, other eCommerce sites will sign up to third mobile party wallets or create theirs. This model gives eCommerce sites another edge because they can now close sales and deliver faster. It further closes the time lapse between payment and possession of product, the exclusive edge offline retailers had over online stores.
Disrupt or Get Disrupted
Advertisers, big offline retailers and brand owners should as a matter of urgency create eCommerce units manned with the right people who have good knowledge of how it works. Media and creative agencies who heretofore plan campaigns for offline sales must up their game. As eCommerce continues to grow, more advertisers will upweight their efforts to it. Moreover, managing an eCommerce brand or a client who needs to sell online is a different kettle of fish. As simple as it sounds, it is still harder to sell online than offline in Nigeria. The level of thinking, data analytics, cost management and corporate governance that goes into running a profitable and sustainable eCommerce company in a country like Nigeria, far outpace what is required from a brick and mortar retailer.
Finally, by the time eCommerce accounts for up to 5% of total retail sales, many advertisers and brand owners caught unawares might become history. The more the middle-class and urban population embrace eCommerce, the more trouble for brick and mortar retailers who are often shackled with spiraling OPEX. Retail marketing for online needs the right people, the right agency and thinkers to achieve the desired results.
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