There is no tech-based/enabled solution for interstate deliveries in Nigeria. There are loads of transportation and logistics companies – leveraging tech, raising funding and mostly based in Lagos – but you cannot make an interstate delivery in Nigeria through your mobile phone, an app, or PC**. Not yet. Tech aside, there are only a handful of companies/startups doing interstate deliveries, period.
That means that gig economy retailers (Instagram sellers and what have you), who rely heavily on transport and logistic startups to get their goods/services to customers, cannot improve their bottom lines and grow their business. According to one retailer on Twitter, “I always go their office whenever I have a delivery to make outside Lagos,” she said of one of the logistic companies she patronises. “There’s also the constant calling and fear that something may happen to your item because these interstate logistic companies don’t have any digital way to track stuff.”
According to other small scale retailers I spoke to, being able to make convenient out-of-state deliveries would help them speed up acquisition requests, time of service and free them up to work on other ways to can grow their business.
“Instead of making the commute to the park to drop the item, I can spend that time refining my social media strategy or doing market research or even working on collaborative projects with other vendors,” said Seyi, a former accountant turned social media-based hair and fashion accessories entrepreneur. “I guess the nature of the Nigerian business environment makes it very difficult for them to offer those kinds of services because there isn’t enough demand to justify the investment.”
Demand isn’t huge for various reasons including Nigeria’s rapidly expanding poverty rate and contracting middle-class (state of the economy, forex etc all play a role too). People do not have the kinds of disposable income that helped propel the e-commerce boom of a few years ago. If people do not have purchasing power then gig economy retailers cannot offer the kinds of volume that will make interstate deliveries compelling to logistic companies.
“When you consider the terrible condition of Nigeria’s interstate highways, the endless checkpoints and the insecurity, taking on interstate deliveries just isn’t a great business play for us,” said John (not his real name), Operations Manager for a Lagos-based logistics startup. According to John, order volumes are super low, even within Lagos. “You see all these logistics companies and think ‘oh, this segment must be extremely high yielding’ but that is not the case. This business is only as viable as the demand for your services – if there a large enough number of people don’t need your services, then you will burn out in no time,” he said.
Meanwhile, there is very little differentiation in the logistics space apart from price. “They are too many and they are all the same. Those ones that cover only Lagos or Abuja or a specific city are still better but interstate delivery is a nightmare, more often than not. The only thing that differentiates these services are their prices,” said Coco Anetor-Sokei, founder and CEO of Hearts and Frames, a custom gift and stationery company.
All of this bellies the deeply fractured state of transportation and logistics (with or without tech) in Nigeria. It’s a hard nut to crack. Just a few weeks ago, Max.ng (one of the better known logistics startups) had to rework its model and there are several logistics startups that have failed along the way. The market is harsh and the ripple effects are pretty extensive. In the end, the winners will be the business/entrepreneurs that continue to innovate, adapt to changes in the market and, most importantly, don’t die.
**There is a company called Courier Plus that allows you book an interstate delivery on its website but vendors I spoke to say the company’s services are super expensive + I couldn’t find this option on their website so I’m going to take my sources’ word for it.