Have you noticed how online shopping has become increasingly popular in Nigeria? It’s no secret that the rise of social commerce has completely changed the game for businesses in the country. With the advent of technology and the growing use of social media, online shopping has become a new way for Nigerians to buy and sell products.
In recent years, Nigeria has witnessed a significant shift in consumer behaviour. More and more people are opting to shop online using their computers and smartphones, making traditional brick-and-mortar stores no longer the only option for shoppers. This has created a booming e-commerce business market and opened up new opportunities for entrepreneurs.
One of the driving forces behind this transformation is the rise of social commerce in Nigeria. Social commerce integrates e-commerce features directly into social media platforms to facilitate seamless shopping experiences. This is a rapidly growing trend in Nigeria, as more and more people use social media to shop.
Social media platforms like Instagram and Facebook have become popular marketplaces where businesses can showcase their products and interact with potential customers. This article will explore how online shopping is changing the game for companies in Nigeria and discuss the impact of social commerce on the country’s economy.
Table of Contents
The Growth of Social Media Platforms in Nigeria
According to Statista, as of January 2023, Nigeria had 31.6 million active social media users. WhatsApp is the most popular platform used in the country, with close to 95 percent of users. Facebook, YouTube, and Instagram are Nigeria’s most used social media platforms.
The number of mobile internet users in Nigeria was forecast to continuously increase between 2024 and 2028 by 13.3 million users (+8.83 percent). After the ninth consecutive year of increase, the number of users is estimated to reach 163.86 million and, therefore, a new peak in 2028. Notably, mobile internet users have continuously increased over the past years.
Depicted is the number of users accessing the internet via a mobile broadband connection. The data shown is an excerpt from Statista’s Key Market Indicators (KMI). The KMI are a collection of primary and secondary indicators on the macro-economic, demographic and technological environment in up to 150 countries and regions worldwide. All indicators are sourced from international and national statistical offices, trade associations and the trade press, and they are processed to generate comparable data sets (see supplementary notes under details for more information).Social commerce integrates e-commerce features directly into social media platforms to facilitate seamless shopping experiences. Click To Tweet
The Impact of Social Commerce on Nigerian Businesses
According to this source, the rise of digital commerce has given birth to new ways for e-commerce retailers to improve their businesses and deliver an exceptional customer experience. This is because the industry is constantly adapting to meet new demands and opportunities by offering consumers various products and services and finding new ways to connect with them through digital storefronts, creating a seamless shopping experience.
Here are some examples of businesses that have transformed their business models to survive and thrive in the digital age :
- Jumia: Jumia is one of the largest e-commerce platforms in Nigeria. It offers many products and services, including electronics, fashion, home appliances, and groceries. Jumia has also launched its payment gateway, JumiaPay, allowing its customers to pay for their purchases online.
- Konga: Konga is another popular e-commerce platform in Nigeria. It offers many products and services, including electronics, fashion, home appliances, and groceries. Konga has also launched its payment gateway, KongaPay, allowing its customers to pay for their purchases online.
- Opay: Opay is a mobile payment platform allowing its users to send/receive money, pay bills, and purchase goods and services online. It also offers ride-hailing services, food delivery, and other services.
According to this source, social commerce has become an increasingly popular way for businesses to connect with their customers and increase brand visibility. According to a study by SpringerLink, social media brand posts and content perceived by customers positively impact attitudes and engagement, which can drive brand loyalty and resonance.
According to McKinsey, social commerce allows businesses to hyper-target customer segments and create a seamless shopping experience by offering consumers various products and services.
Benefits and Challenges of Social Commerce in Nigeria
Social commerce has become an increasingly popular way for businesses to connect with their customers and increase brand visibility. According to this source, social commerce offers several benefits for companies, including:
- Increased Organic Reach: Social platforms enable businesses to create an account and publish content for free. As businesses consistently publish content, they gradually build up a following of engaged users. The more engaged followers businesses have, the greater their organic reach will be. This ultimately helps businesses reduce their paid ad spend and acquire customers cost-effectively.
- Quick Product Feedback: Social commerce enables businesses to get rapid product and service feedback. Businesses can quickly understand users’ thoughts about their products by gauging social media reactions and comments. This feedback can help companies make necessary changes to improve their product offerings until customers are satisfied.
- Virality: Social commerce allows businesses to have their product go viral. They can create endless content; just one viral win can compensate for all the other efforts. Platforms like TikTok and Facebook are exceptionally viral, so if businesses can solve a major customer pain point, they have the opportunity to go viral.
For consumers, social commerce offers several benefits as well, including:
- Personalised Shopping Experience: Social commerce allows consumers to get peer reviews, see trends, and have a more personalised shopping experience. With billions of active users on social media, there’s a significant opportunity for businesses to integrate the social experience with their products and services.
- Convenience: Social commerce allows consumers to shop from the comfort of their own homes. They can browse products, read reviews, and purchase without leaving their social media platform.
- Ease of Use: Social commerce platforms are designed to be user-friendly, making it easy for consumers to find what they’re looking for and make purchases.
Social commerce has become an increasingly popular way for businesses to connect with their customers and increase brand visibility. However, several challenges and potential risks are associated with social commerce in the Nigerian market.
According to a report by the International Trade Administration, Nigeria can pose some daunting challenges for businesses, including the high cost of doing business, the need to duplicate essential infrastructure, insecurity, corruption, the lack of effective judicial due process, and nontransparent economic decision-making in government procurement. Clearance of goods at ports can be slow, cumbersome, and highly bureaucratic.
Companies indicate that corruption and congestion remain major issues at ports. To access many opportunities, such as public bidding and participation in sectors with local content requirements, companies seeking to do business in Nigeria may need to incorporate companies or otherwise establish a presence, as local law may require
In addition, a report by LU identified some key challenges in the Nigerian context, including power outages and frequent power interruption, insecurity, technology cost, lack of trust in web retailers, software compatibility, and acquisition of skilled IT personnel.
Despite these challenges, social commerce offers several benefits for businesses and consumers in Nigeria, including increased organic reach, quick product feedback, virality, personalised shopping experience, convenience, and ease of use.
Strategies for Implementing Social Commerce in Nigeria
Here are some strategies for implementing social commerce in Nigeria:
- Offering Incentives: Businesses can offer incentives, such as discounts or complimentary products, to customers leaving positive reviews.
- Acknowledging Customer Complaints: Acknowledging customer complaints and providing solutions to win back trust and improve reputation.
- Implementing Strategies to Address Customer Concerns Promptly and Professionally: Businesses can implement strategies to address customer concerns promptly and professionally.
- Letting Your Brand Come Alive: Businesses can let their brand come alive by showcasing their personality on social media. Posts don’t always have to be about selling or showcasing products. They can be about the brand’s story, values, and culture.
The Future of Social Commerce in Nigeria
According to a ResearchAndMarkets report, Nigeria’s social commerce industry is expected to grow by 43.3% annually to reach US$1.19 billion in 2023. The social commerce GMV in the country will increase from US$1.19 billion in 2023 to US$5.04 billion by 2028.
Another report by PR Newswire states that the social commerce industry in Nigeria is expected to grow by 82.4% annually to reach US$1,003.8 million in 2022. The social commerce industry is expected to grow steadily over the forecast period, recording a CAGR of 71.3% during 2022-2028.
While the future of social commerce in Nigeria looks promising, several challenges and potential risks are associated with it in the Nigerian market, as mentioned above.
As the Nigerian e-commerce market continues to experience rapid growth, startups and established businesses are recognising the importance of implementing a social commerce strategy to reach a wider audience and stay ahead in the competitive e-commerce landscape.
With key trends indicating the rise of social commerce as one of the growth segments in the Nigerian e-commerce landscape, businesses are leveraging powerful tools to connect with their target audience and drive sales. This shift towards social commerce is transforming the way online shopping is conducted in Nigeria, as businesses are now able to engage with their customers on popular social media platforms like Facebook and X (formerly Twitter).
By optimising their social media presence and using these platforms to showcase their products and services, businesses can attract a larger audience and increase their visibility in the Nigerian e-commerce market.
Furthermore, by understanding the behaviour of their target audience through metrics such as page views, bounce rate, time spent on site and online sales, businesses can modify and optimise their web pages annually to enhance their social commerce strategy and stay ahead of the competition.
With the Nigerian e-commerce landscape constantly evolving, businesses must adapt to these changes and seize the opportunities presented by social commerce to thrive in the dynamic Nigerian e-commerce market.Businesses can offer incentives, such as discounts or complimentary products, to customers leaving positive reviews. Click To Tweet
The rise of social commerce in Nigeria and Africa has been a game-changer for online shopping. With the industry’s constant adaptability to meet new demands and opportunities, businesses have created a seamless shopping experience by offering consumers various products and services and finding new ways to connect with consumers through digital storefronts. While several challenges and potential risks are associated with social commerce in the Nigerian market, the benefits for businesses and consumers are undeniable.
If you want to learn more about how social commerce can help your business grow, schedule a call with Mauco Enterprises today. We can help you navigate the challenges of social commerce and develop a strategy that works for your business.
Frequently Asked Questions (FAQs)
What Are the Social Commerce Platforms in Nigeria?
- Jumia: Jumia is one of Nigeria’s most prominent social commerce platforms, offering a wide range of products and services for online shopping.
- Konga: Konga is another popular social commerce platform in Nigeria, known for its various products and competitive pricing.
- DealDey: DealDey is a social commerce platform in Nigeria that focuses on discounted deals, offering various products and services at discounted prices.
- PayPorte: PayPorte is a Nigerian social commerce platform specialising in fashion and lifestyle products, providing a convenient online shopping experience.
What Is an Example of a Social Commerce Business?
- Etsy: Etsy is an online marketplace where individuals buy and sell handmade or unique items.
- Poshmark: a platform that allows users to buy and sell new or used clothing and accessories.
- Airbnb: a website that enables individuals to rent out their homes or rooms to travellers.
- Groupon: a website that offers discounted deals and coupons for various goods and services.
What Is the Meaning of Social in Commerce?
Social commerce refers to the integration of social media platforms and networks in the field of business and e-commerce. It involves using social media platforms like Facebook, Instagram, Twitter, and LinkedIn to promote and sell products or services. Social commerce allows businesses to interact directly with customers, gather feedback, and build relationships, leading to increased brand awareness and customer loyalty. It also enables customers to share their shopping experiences, recommendations, and reviews, which can influence others’ purchasing decisions.According to a report, Nigeria's social commerce industry is expected to grow by 43.3% annually to reach US$1.19 billion in 2023. Click To Tweet
What Are the Two Types of Social Commerce?
- Peer-to-peer Social Commerce: This type of social commerce involves individuals buying and selling products or services directly from each other through online platforms or social media channels. Examples include marketplace platforms like eBay or online classified ads.
- Group Buying Social Commerce: This type involves individuals coming together to make a collective purchase, often at a discounted price. Platforms like Groupon or LivingSocial enable users to join forces and benefit from group discounts, creating a sense of community and shared savings.
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