Continuous growth of Nigeria’s e-commerce industry will largely depend on retail merchants adopting the pay on delivery payment mode that was pioneered by online retailer Jumia, a new study indicates.
The study entitled ‘Investigating the Significance of the ‘Pay on Delivery’ Option in the Emerging Prosperity of the Nigerian e-commerce sector’ reckons that Nigeria’s online platform faces credibility challenges that make it impossible for shoppers to trust the growing number of online merchants.
In effect, adopting of the pay on delivery payment option is a critical trust builder and can contribute significantly in the growth of e-commerce in Nigeria, Africa’s biggest economy.
“In a country like Nigeria that is well known for internet scam and high rates of online fraud, consumers of these e-commerce services consider trust as probably the most important factor and incentive to try out and keep using these e-commerce services,” states the study by Chike Chiejina of Crow Technology Solutions Limited and Soremekun Ezekiel Olamide of African University of Science and Technology.
It adds that for e-commerce to flourish, consumers need to trust that what they are buying is good value for money, their payment details are secure and that their products will be delivered to them, and on time, after payment.
This is based on the fact that 59 per cent of the Nigerian population doubt the safety of online transactions and 43 per cent are concerned about the quality of the products delivered.
According to the study, the entry of Jumia in the Nigerian market with the concept of pay on delivery has been instrumental in the growth of e-commerce especially over the past one year.
Growth in the number of internet users, which has increased from about 200,000 in 2000 to about 43 million people, together with rising numbers of online shoppers has also played key roles in deepening e-commerce.
Online shops and merchants have exponentially increased from only two online shops a decade ago to over 75 active online shops.