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Digitization of informal retail markets is an emerging global business model and Nigeria’s economy is falling in line in this regard. Recently impacting the Nigerian business sector are business-to-business e-commerce brands reinventing the market with technology solutions.
Estimated at over $100 billion, the Nigerian informal retail sector has a chain of challenges. Unauthorised marketer peddling adulterated products; mass illiteracy among retailers; clustered market; supply versus demand issues; retailers’ lack of or limited inventory knowledge, coupled with lack of business and management skills, are some of the many challenges bedevilling the market.
Despite the challenges, these e-commerce platforms see opportunities. They aim to solve these challenges by creating digital products that make life easier for informal retailers. “It is one market long overdue for tech-based solutions,” said Alerzo Limited CEO, Adewale Opaleye. “The market holds enormous potential, however, there are several problems to solve to fully open up the sector.
“Looking at the market, it is cash based and is largely unregulated which leads to instability in market prices. The role of several intermediaries also creates complexity. Likewise, business growth is affected by retailers’ lack of access to finance. Inadequate logistics facilities also take its toll on the supply chain. So these are issues we are addressing with technology, thus exposing retailers to modern business practices,” he explained.
Fintech products by e-commerce platforms promise long term positives on the informal market. For instance, retailers using Alerzopay build financial history that could help them access funds for business expansion. Added to this is the overall financial inclusion benefits for the market, as several rural retailers previously excluded in the conventional banking can be serviced digitally. Notable is the fact that this will go a long way in expanding the financial ecosystem.
Another added benefit of e-commerce to this sector is that it will help address the lack of business and management skills prevalent among informal retailers. B2B shopping platforms are run by professionals with apt business knowledge. These e-commerce platforms provide sellers with training, and advisory which can help informal retailers grow their businesses.
The journey to a robust digital retail market is still a long one for Nigeria, but the recent influx of technology investment in Nigeria’s informal retail market is a sign of a market heading in the right direction.
