A Very Nigerian Opinion on E-Commerce and Online Fashion Startups

Folake Shoga shares her opinion on the recent spate of tech startups and apps mean to serve Nigeria’s fashion and fabric industry.

Two recent articles in Techpoint, the Nigerian online technology magazine, feature initiatives dealing with aspects of the clothing business. One is a startup letting studio space and equipment to makers, 360 Creative Hub; and one is an internet based fabric selling business, Fabricsphere. Reading up on the feasibility of these two initiatives has been an interesting experience, very much encouraged by the richness of Techpoint’s coverage of Nigeria’s tech and business ecosystem.

Having said that, as just a humble, occasional and above all provincial Nigerian, I’ll start by paraphrasing L P Hartley: “Lagos is another country; they do things differently there.” Sometimes, reading official accounts, reports etc of events in Nigeria really jarrs with one’s lived experience of the country (even though being as the standard of written professional journalism is generally excellent, this hardly every happens when reading the actual quality newspapers, Punch and The Guardian and their ilk.) In the aforementioned Techpoint articles some of the prices quoted for goods and services seem steep to me, which surely militates against takeup, but I am, as I said, provincial, and moreover brought up by Ijebu people. No doubt everything costs more in Lagos.

Startup culture is a thing in itself; current, progressive, innovative, aiming to breach new ground or disrupt! received conventions – although strictly speaking away from the comfortable global North there may already be more disruption going on than we are entirely comfortable with. But the term itself, startup, comes surrounded by an effervescence of aspiration, floating on an expectation of the power of a tech-determined state change in human affairs. “First we’ll click here, then we’ll be in tomorrow today already! Yay!!”

As recently as 12 years ago it was impossible to prejudge which casual, frivolous digital activity would end up as an engine of massive social change. Nobody could possibly have foretold, for instance, how a site for rating the comparative attractiveness of your female fellow students could have morphed into a giant data-gatherer, news disseminator and influencer of global public opinion. Or how a site for online shopping could evolve to be at the forefront of research into the logistics of drone technology and other automated delivery systems. So there is a hope and a hype around web-based startup culture, an eye for the next big thing, the next new system that will prove that from small beginnings come big changes. Nigeria, as a vast untapped market, has the potential to be a hive of new technology activity, and Techpoint in it’s many articles provides an interesting and thorough overview of the local scene, though concentrating almost entirely on Lagos.

It seems to me, speaking as a complete lay person, that we have less use of technology in Nigeria than in several other African countries. Thus, although we see from Kenya’s example that mobile banking is a workable low-tech solution for diverse commercial contexts, it hasn’t really taken off in Nigeria yet in spite of the existence of Paga and the immense effort of its CEO in getting it off the ground. I’ve no acquaintance with anyone who has ever used it. I look up Paga agents in Ibadan: there are five. How does that work in a city of over 3 million people?

There are reasons for Nigeria lagging behind: our infrastructure is notoriously abysmal, our electricity production shameful, our services underfunded and wrecked by graft. Furthermore, again speaking as a lay person, financially I think our business environment is hobbled by anti-fraud measures imposed on our economy. These surely make life much more difficult for the average consumer/business person than for the career criminal who can get around such things – for instance, registration of all sim cards – much more easily than an honest person. The inconvenience of the most mundane aspects of daily life in Nigeria is one of it’s striking characteristics. On the new technology front, privileged old me has like many Nigerians stood waiting in the supermarket line for ages while the staff go hunting for the correct payment terminal for a customers debit card, a terminal which will only accept cards from the one bank and not the other – if the network is up to it that day; has decided to come back to the telecommunications office another day to register my sim card, leaving me with no phone for a while, because the queue was just that massive. And I along with the rest of the district, have sat through days of no phone coverage and no internet because the city-wide petrol shortage meant there was no fuel for the generators that power the phone masts. (And, while I’m on the subject of complaining about petrol shortage, I’ve flown from Murtalla Mohammed airport only to have the plane make an unscheduled stop at Sao Tome because there was no aircraft fuel – kerosene to you and me – available for refuelling in Lagos. Which, the drive to the airport through Leki, past Banana Island over the beautiful bridge and then through Ikeja to a plane in an international airport with no fuel, just added insult to injury.)

However In the past few years credit and debit cards have become more widespread, bringing convenience where formerly there was not much: but I was amazed to learn in my reading on Techpoint that private enterprise had a major role in the introduction of credit cards to Nigeria! It is hard not to conclude that this shows the contempt of international banking organisations for the ordinary Nigerian.

There are so many obstacles to any sort of automation in the Nigerian context and though we might long for the increased convenience of automated systems we also can’t escape an ingrained contextual wariness about 1/ unforeseen, unlikely but utterly devastating blips in the system and 2/ suspicion that every new set-up brings with it the possibility of either graft or scamming. Moreover there are difficulties around making payments in any other way than: going to the bank; getting out your cash; carrying it home trying not to look too conspicuous; – hiding it in several caches in your cupboards! – handing the cash over to make your payment after counting it carefully in great wads within sight of your payee. All this has been par for the course for so many years. Even though the establishment of market leaders Jumia and Konga Mall prove provisional local viability of the e-commerce environment, there is a whole culture of (justified) punctilious wariness around money and it’s dissemination that is bound to affect the deployment of aspiring web-based or mobile-based or web-supported or tech-supported enterprises.

Techpoint also publishes a handy checklist of 20 solid reasons why your new Startup could fail (‘Three out of four startups are bound to fail…No. 1: NO MARKET NEED. Startups succeed because they are solving a particular problem users are experiencing‘) as well as some interesting reflections on e-commerce difficulties and business failures. As an example of the pithy writing and uncompromising analysis in Of funding sprees, low ROIs and massive layoffs: The future of eCommerce in Nigeria (Oyinkansola Sadiq-Mabeko), I quote: ‘Still in the defense of merchants, it is important to note that the Payment on delivery wahala has put them at the mercy of customers. My mouth hung open, while listening to a merchant recount experiences of tricks played by Nigerians who have taken advantage of the concession and the huge loss suffered as a result of it. (Imagine having a product ordered up, you deliver to the client, only to be told by the client that they forgot and they were just testing out the system). And yet, people still feel reluctant giving out their credit card details online. Go figure.‘ It should be noted above, the writer explains in the article why a vendor would be waiting a while before all customers have the capacity and/or willingness to pay by card, hence COD .

Techpoint is to be congratulated on offering such a wide range of commentary, information and analysis of the e-commerce ecosystem in Nigeria, creating a knowledge base from which to understand development of the sector. Armed with this and their own local know-how readers can form their own opinions about the nascent schemes and startups featured. It’s interesting to think about investment sources for these startups. An afternoon’s googling tells me there’s a lot of Venture Capital and Angel investment, some from within Nigeria, with some government funding. But it was only one afternoon’s googling, so I stand to be corrected, or further informed.

I found one of the most rewarding articles on the site to be Meet Olumide Olusanya, a former medical doctor who quit the practice to sell groceries online. It not only gives an insight into an extraordinarily intelligent, driven personality, but a shrewd assessment of the Nigerian business context. Beyond that, I loved it because it confirmed one of my own pet prejudices, that if you want to get anything innovative done in Nigeria you have to lead from the front and by example, not just supervising every single thing but sharing the physical work yourself to encourage and inspire your workers. It is an ingrained attitude for us in Nigeria that physical effort is for subordinates and poor people. Yet when I think of dynamic new enterprises I’m aware of, most are led by people willing to get their hands dirty, camp out on the premises, and pay such attention to working detail that they respond instantly and with flexibility to whatever exigencies occur. Locating the logistics of a business in cyberspace doesn’t preclude the need for such on-point physical back up.

With regard to selling fabric online, and going back to the ’20 solid reasons…’, an entrepreneur would have to ask themselves very rigorously what is the added value of trading in this way? What could make the innovation spread through the trading community, and what accessible platform could help spread it?

  • Would it be useful for the lady vendors who are used to travelling such long distances in quite insecure conditions to see the stock online and perhaps order before they arrive to collect?
  • Or could they have it sent to themselves after inspecting the goods online? Or would this obliterate the price differential that gives them their profit margin and makes their travel worthwhile?
  • Is the travel and face-to-face aspect of the transaction actually an element of business they enjoy?
  • How to inject trust into the online relationship, is there for instance a way to use accessible tech to guarantee their credentials to an unfamiliar vendor, or in a foreign country?
  • Or will a greater use of technology somehow provide an opportunity for the yahoo boys to infiltrate the process somehow?

If a new technology can support and enhance the resilience of the long-standing value chain in Nigeria, it will be a force for inclusion and prosperity. Allowing new systems to be tested at many levels in the market outside of the startup ecosystem is what will finally determine their usability and their value.

‘Cyberspace’ is no magical fix. While it extends the reach and ease of customer contact, the logistical problems of scale, storage, transportation, delivery, trust, payments and deadlines are grounded in the same physical infrastructure for e-businesses as for their more traditional competition. Potentially the advantages of e-commerce will come from convenience, communications and scale. Any enterprise which manages to harness the communications capabilities of the majority of mobile phones used in Nigeria to provide secure, diverse economic transactions for people from a whole range of incomes and needs will have truly cracked a massive, massive market.

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