Why Nigerian entrepreneurs should solve problems beyond eCommerce

ecommerce (1)

Nigeria is almost a victim of it’s size. It’s almost too easy to have big ambition. The population size makes the country one of the most viable markets to monetise consumer products. It’s quite common to see startup founders creating various versions of ecommerce platforms than anything else.

I get it, size matters. After all, size is a significant factor that drove most of China’s stratospheric growth. It’s easier to build and monetise an online consumer product that provides a slight improvement to what people already do offline, rather than build a deep-tech product that intends to create new habits.

However, I think a lot of Nigerian startup entrepreneurs are getting blindsided by the population size. The reality is, research data on the number of people with access to internet and consumer behaviour in Nigeria is still patchy. Internet is still expensive. Not everyone that has a mobile phone, uses the internet. Not everyone who uses the internet, trusts it enough shop online. Not everyone who shops online, does so regularly. So the total addressable market for ecommerce in Nigeria could be a lot smaller than what you see on numerous pitch decks and telco-sponsored research reports.

Also, consumer internet business models are relatively easy to validate but expensive to scale. Customer acquisition cost tends to go up as the market matures and more competition enters the fray. The Mexican standoff between Jumia and Konga highlights how tough this could be. Both businesses are burning loads of cash for land grab and market share that is still mainly confined within Lagos. And there is going to be another big boy in the hood – Mara.

The bottom line is, except you have deep-pocket investors with the willingness to fight a long drawn battle for network effects, building an e-commerce  business at scale could be a hard one. So, why do so many Nigerian founders still default to ecommerce solutions? Well, I reckon it has a lot to do with size and solubility. The size of the market is alluring with an obvious demand. And most of the problems with e-commerce have been solved and can be adapted even in relatively immature markets.

So, it’s easier for Nigerian founders to demonstrate traction selling stuff online than trying to build a product that will make car registration in Nigeria more efficient. For the former, rallying your immediate friends and family network around your MVP can generate the first $100 in revenue, but the latter will take months of product development and government buy-in to demonstrate any meaningful traction.

However, technology and innovative business models can be used to solve other problems in Nigeria beyond buying and selling goods online. There are pockets of underserved and untapped markets in other spaces. Significant value and wealth can be created through B2B enterprise solutions that will create efficiencies in specific industries.

Nigerian founders should focus on problems-to-be-solved with technology rather money-to-be-made. Revenue is a reward for solving problems. Here are few that come to mind.

1. Nollywood Movie Subtitle Service: Use combination of human and machine learning algorithms to improve (cringe-worthy) subtitles on Nollywood movies.

2. HR Management – Cloud-based SaaS for managing human resources including hiring, scheduling, payroll, staff evaluation, insurance and incentives.

3. Expert Consultants On-Demand: Online marketplace for MBA and PhD consultants from world-class universities and companies to provide on-demand consulting services for African SMEs and organisations

4. Office Building Check-in App: It’s annoying to sign into a tatty notebook at the security post before one is allowed to enter most office buildings in Nigeria. Someone needs to create a ‘foursquare-ish’ app that enables visitors to check-in to an office building via their mobile phone.

5. Multi-channel Marketing Attribution: I assume millions of dollars is spent by brands to advertise in Lagos. There is an opportunity here for algorithm-based software that helps quantify the impact of marketing across online and offline channels and estimate ROI for these brands.

6. Back-Office Automation– Lots of companies in Nigeria, including large banks and other financial service companies, still rely on manual/Excel-based processes to manage inventory, qualify leads, generate quotes and sell their products. Building vertical SaaS products to solve these problems will create significant value and increase efficiency

7. Real Estate Investment Syndicate – Real estate will continue to be a decent investment opportunity in Nigeria. A platform that enables people to purchase equity in private real estate investments for as little as possible through crowdfunded syndicated deals will create value for buyers and sellers.

8. Software Development Project Management –  match project owners with organised team of software developers, designers, project managers, testers and business analyst.

9. Customer Review – Make it easier for businesses/brand to collect  and publish customer reviews and NPS survey results from various sources.

10. Medical Diagnostics Lab –  enable users to discover and book private medical labs based on facilities, availability, expertise and user ratings. Provide subscription-based insurance programme that will guarantee routine medical checkup.

I believe there are many others that a lot of smart entrepreneurs in Nigeria may be working on. I look forward to seeing more ideas that can be added to this.


This article was written by Dotun Olowoporoku. He currently works on Starta, a content and data platform that makes it easier to build, discover and track high growth business opportunities in Africa.

Discussion on Radar

  1. @dotun.o . Nice post here. I think we are brining the whole problem of being an importing nation to the Internet instead on leveraging on it to solving more critical problems. The latter is difficult though.

  2. Nice post.
    The problem is that most guys here are inspired by the cash, and not the problem solving.
    Lindaikeji became a billionaire through blogging and today there are more news blogs than all the startup in Nigeria combined (imaginary). Some of the other startups are copycat, they are not well tailored for us here. when people read techcrunch, they just want to replicate the reviewed ideas, without putting into consideration other factors. That is why most of them die on arrival.

    Most people go for e-commerce cos it has a higher adoption rate than most other ideas. But I still believe that an idea that really solves problem, shouldn't have issues with adoption.

  3. Great post, with insightful points raised. Being an entrepreneur from Ghana, I can relate with the points and issues you have raised. This is caused by a lot of challenges which includes availability of funding, the interest of investors in "non-traditional" ideas with respect to the African market, market readiness for those ideas and adoption etc.

    I like your 5th suggestion (Multi channel marketing attribution for ROI) because I am currently the CEO of a startup in this space called COCKTAIL INSIGHTS. What we do is to help businesses measure the returns of their social media campaigns and efforts whiles giving them insights on content and audience. From our market research, we found out that the market size in Africa for the value or solution we want to provide is very small as compared to other markets. Due to this, we have to focus on a target market which is outside Africa. Although there are various strategic marketing options you can utilize to target foreign markets, it's obviously always difficult to target a market in which you are not physically in, especially being a B2B company. This and many more challenges are some of the reasons why entrepreneurs in Africa stick to "traditional ideas" like eCommerce. Without market readiness, the market or public would need education to use new technologies and solutions. This is what a startup wouldn't like to do because this usually requires a lot of time and cash. Startups usually ride on trends and existing user behavior.

    But I believe if the right structures are put in place by governments, investors and other stakeholders to foster a strong startup ecosystem, some of these challenges would be resolved and this would make it easy for African entrepreneurs to Think Outside the Box and Run Wild With Their Imagination.

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