Moreover, terms like Artificial Intelligence and Machine Learning came into the fray, and are all set to become the new normal. It’s been a whirlwind of a year for Nigerian e-commerce! So, I decided to sum up the performance of the Nigerian e-commerce industry in 2017.
The Nigerian e-commerce industry is riding a rapid growth wave and its effects in the past one year alone have been huge. In 2017, we saw the entry of global giant Alibaba, the launch of PayTm Mall and a slew of app first e-commerce brands. Meanwhile, the draught in funding forced many brands to shift focus from driving GMV to revenue growth & profitability.
Surge in wallet usage
The cash-crunch caused by demonetization forced a surge in cashless methods like mobile wallets, debit/credit cards and net banking. According to a survey by CashKaro.com, almost 50% respondents switched from cash on delivery to digital payments, mobile wallets reaped colossal benefits. According to Business Insider, wallet payments forerunner PayTm witnessed transactions worth 120 crore per day only 12 days post demonetization. Today digital payments have become an essential part of urban India’s day-to-day life; fast spreading to the rest of the country.
The rise of niche stores
Online shopping portals like MamaEarth, TeaFloor and Coolwinks grabbed a sizeable chunk of the market. Sitting on a higher rung on the e-commerce giant chain, Nykaa, Myntra, FirstCry, UrbanLadder and LensKart launched brick & mortar stores becoming ‘Omni-channel’ retailers. Meanwhile, Flipkart, went on an acquisition spree adding fashion portals Jabong and Myntra to its kitty.
Mobile takes center-stage
In 2016, with the advent of 4G and lower subscription costs, mobile phones became the preferred device for shopping. As of 2017, mobile and internet penetration is such that one out of three people in tier I and II cities use their smartphones to shop online. In 2017, 82% of shopping queries were made through mobile devices, compared to 76% in 2016, according to a study by Assocham and Deloitte. Secure payment gateways, availability of alternate payment methods and offers on mobile payments have all contributed to this increase in mobile e-commerce. As internet and smartphone adoption continues to rise across the country, use of mobile as an online shopping platform is expected to cross $50 billion in value by the end of 2018 from the current level of $38.5 billion.
Growth of artificial intelligence
Technological advancements in machine learning made it possible for the e-commerce industry to adopt artificial intelligence (AI). AI has majorly affected customer service for e-commerce, bringing companies closer to consumers than ever before. E-commerce portals are using chat bots to personalize experiences while acquiring insights about consumer behavior. Major players such as Flipkart and Amazon aim to use AI for product recommendations and enhanced user experience.
As we walk into a more tech-centric era, we can expect these trends to snowball further. Combining trends from 2017 and predictions for 2018, its full steam ahead for e-commerce and I can’t wait to see what 2018 has in store.