A recent study conducted in Nigeria by Ipsos a global market research company, on behalf of PayPal shows an expectation by Nigerian consumers to conduct more shopping online. Out of the approximately 50 million internet users in Nigeria, 65% of users already shop online and another 24% of users expect to do so in the future.
There are several key drivers that would encourage even more ecommerce in Nigeria. Of the online shoppers surveyed, 53% of Nigerians who have shopped online in the past said faster delivery of goods would encourage them to shop online more often, 40% indicated that safer ways to pay was a key driver, and 31% indicated lower product costs as a driver to do more shopping online.
Security of Online Payment and Delivery Costs are the Main Concerns
The research shows that security of online payments and delivery costs are among main concerns preventing consumers from conducting more online shopping. 31% of those who have not shopped online give concerns about security of payments as a reason for not currently shopping online, and 27% say that the cost of delivery is a reason for not currently shopping online.
Fear over security of online payments means that cash on delivery is still the most used and preferred payment method when shopping online, with 39% of online shoppers using cash and 32% indicating it is a preferred payment method for online purchases.
“Online security matters. This is why PayPal provides a simpler, easier and more secure way to shop and pay on millions of websites around the world,” says Efi Dahan, Regional Director for Africa and Israel at PayPal. “The fact that PayPal does not share financial information with the seller when authorizing a transaction keeps the consumers’ financial details more secure”.
Nigerian consumers who have heard of PayPal agree PayPal is a fast (85%), convenient (83%) and safe (73%) way to pay online – to the extent that 72% of online shoppers aware of PayPal agree it is the safest online payment method.
Popularity of Mobile Online Shopping
The research shows the overwhelming usage of mobile phones to shop online. 90% of online shoppers that own a smartphone or a feature phone have used it to shop online while 51% use their device to shop online once a month or more.
Shopping on mobile browsers seems to be the most popular way to do mobile shopping with 43% of Nigerian mobile shoppers stating a preference to shop using the phone’s browser, compared to 34% who prefer to shop from an app (and 23% who have no preference).
However, some barriers remain for mobile shopping. Security of payments was flagged as a concern to Nigerians with 30% of mobile shoppers saying security of online purchases from a mobile device is a reason for not shopping online using a mobile phone more often, while 30% also flagged concerns about internet usage costs on mobile as a barrier to mobile shopping.
Popular Categories
Nearly half (47%)of online shoppers in Nigeria purchased digital goods in the past year, followed by 39% that purchased adult clothing, footwear & accessories online, and 33% that purchased physical entertainment such as books and CDs online. The research also found that one in every four Nigerian online shoppers purchased consumer electronics online in the past year. 40%-69% of online shoppers have indicated they expect to spend the same or more on the following categories next year: digital goods (62%), adult clothing footwear & accessories (69%), physical entertainment (60%), jewelry and watches (53%), consumer electronics (54%) and children clothing(40%).
A Regional Perspective
Nigeria is without a doubt a significant ecommerce nation leading in the amount of potential and existing online shoppers (89%), compared to South Africa (70%) and Kenya (60%).
Finally, intra-African trade is significant with 36% of Nigerian cross-border shoppers (those who have shopped online from another country) buying from elsewhere in Africa in the past 12 months. South Africa is the main destination with 30% of Nigerian cross-border shoppers buying from the country in the past 12 months. It is followed by Kenya with 2%, Egypt with 1%, and the rest of the continent with 3%.
