Let’s get this clear; it is extremely difficult, if not practically impossible, to build a solely online consumer internet business in Nigeria and by extension, Africa. This is due to a number of reasons including poor internet connectivity and reach, lack of trust, and broken infrastructure, among others. Even faced with these challenges, I still strongly believe that the future is powered by technology. However, it must be phased over a period of time. Remember Rome was not built in a day.
It is possible that you have a great idea; the kind that would disrupt or revolutionise traditional ways of doing things. However, to increase your chances of success, you must have both online and offline strategies.
Nigerians have strong online presence. Industry data has proven that Nigeria is a mobile first nation; hence, the craze for building mobile apps (I have my opinion on this). But we need to examine what activities Nigerians indulge in online to understand if your solution fits their needs.
Quoting 2015 figures for Nigeria only, Facebook has 7.1 million daily active users, 6.9 million mobile daily active users, 15 million monthly active users and 15 million mobile monthly active users. Note that these numbers are for Facebook only. An unverified source says that 40 – 50% of Nigeria’s mobile population is on Whatsapp. If this information is anything to go by, Whatsapp might have between 61 – 77 million users in Nigeria. Assuming 50% of that number is active daily, then Whatsapp will have a minimum 30 million daily active users.
Let us now compare these numbers to those of online businesses. Konga has only 184 thousand active users – active user in this case means anyone who used the Konga service in a quarter.
Paystack is in a similar situation. The company recently announced that it hit one billion in monthly transaction value! If we assume the average value of transactions carried out by each user is N5,000, we can safely estimate that Paystack has 200 thousand monthly active users. This is still small compared to the number of Nigerians online.
Though one could say that we are comparing apples with oranges, the point is clear; Nigerians are online, but the majority are not interested in paying for or buying things through online channels. Hence, you cannot look at the number of internet users in Nigeria to justify why your online business will have a large share of it.
Once this background has been laid, it is important to see how some existing consumer internet businesses are using offline strategies to drive or reinforce their online businesses.
1. Pay on Delivery (POD) and/or Designated Pick-up Locations – This is largely based on trust which is one of the weaknesses of the Nigerian e-commerce segment. However, it is the customers’ way of demanding offline services. I have seen the dress online; let me see it physically before I pay for it, simple! People who do not also want to pay for the delivery charge associated with POD will opt to pick up their goods from a designated location. So, the online platform is reduced to a catalogue, while the pick-up location provides the offline experience.
2. IrokoTV Kiosks and Download – according to statistics, Nigeria is the largest movie producer in the world; ahead of both Hollywood and Bollywood. Nigeria’s internet penetration is on the rise, hence you would expect that IrokoTV, which was designed as an online movie streaming service (Africa’s Netflix) will be a runaway success. IrokoTV’s customer base is largely Africans in diaspora. However, in a bid to capture the Nigerian market, IrokoTV had to design an offline distribution strategy using its Kiosks. For them, the major concerns were poor broadband internet penetration; hence, they cannot support streaming. The offline strategy also reinforces the online business as people become a lot more aware of their offline business therefore driving traffic to the site.
3. Wakanow Travel Centres – Wakanow is an online travel agency. Please mark the word “online”. However, the company is using its offline presence to drive its business. Not many Nigerians will book a holiday entirely online without holding someone responsible if the flight was not properly booked or mundane things like, “the food in the hotel is bad!” Hence the need for travel agencies. They help reassure the customers that Wakanow is a real company with real people working there, thus getting the customers more comfortable about booking their flights with them.
4. Offline Advertising – As much as digital advertising is a formidable tool for a technology driven business, offline advertising cannot be completely ignored. It reinforces the targeted digital adverts. It is the reason for Konga’s willingness to pay for a radio or TV jingle, Jumia taking up a billboard space and others having “moving billboards” on BRT buses. Offline advertisements help to reassure the customers that your business is a real business. Most of these customers have been scammed or have heard too many online scam stories. So, they believe that traditional media serves as a check on potential fraudulent tendencies. The summary of this is that people will be more willing to buy if they have seen or heard of your business on any traditional media – TV, Radio, Billboard, BRT Buses, etc.
5. Call and Support Centres – I recall placing an order for an item on one of the most popular e-commerce sites. Upon confirmation of my order, I got a call from the e-commerce giant’s agent to confirm my order and explain the delivery procedure and process. This, among other things, is a move to further personify the business. Technology businesses with hardware components typically have support centres that customers can go to address their issues.
In summary, irrespective of how digital your consumer internet business might be, you should have an offline strategy to further reinforce your digital revolution. You can teach an old dog a new trick, but it will take a long time. In the same vein, one should not expect a sudden behavioural change from your customers; have a mix of both online and offline options, then gradually scale in the direction that is most effective.