General News
Price Vs Quality: The Nigerian e-commerce shopper’s dilemma
By Terry Ibinabo,
By nature, Nigerians are predominantly traditional in their approach to shopping.
This is hardly surprising when you consider that online shopping or e-commerce, as it is more popularly known, is a fairly recent phenomenon, one that is still catching on here in Nigeria but undoubtedly growing in leaps and bounds.
Indeed, e-commerce, or at the very least, the structured version of it that we experience today, is barely a decade old in Nigeria. More on this later.
The predilection to readily embrace an opportunity to see, touch or experience a product (a classic case of what you see is what you get) before parting with hard-earned money is deeply ingrained here.
This is undeniably tied to the skepticism and natural sense of caution an average Nigerian possesses, particularly in situations that involve spending money.
Another important factor is a chance to haggle over price and the satisfaction of walking away with a perceived good deal, especially when the buyer succeeds in convincing the seller to shift ground. This is not to rule out the warm, human interaction that shopping in such traditional retail formats engender.
Perhaps, this is why open-air markets, corner shops or mom and pop stores remain popular and have continued to command a dominant share of retail spending in Nigeria and many other African countries.
The foregoing finds expression in a recent study by the Boston Consulting Group (BCG). Specifically, the report, published in June 2022 , submits that more than 600,000 small shops and open-air markets dominate the retail landscape in Nigeria, accounting for an overwhelming 97% of national sales of food, beverages, and personal care products.
The study adds that these traditional retailers consist of small kiosks and open-air markets. Even more eye-opening is the fact that the report reveals that the dominance has remained, despite the considerable challenges posed to traditional retail by the expansion of modern retail, the nascent rise of e-commerce and changes in consumer behaviour accelerated by the COVID-19 pandemic.
Titled ‘The Future of Traditional Retail in Africa’, the report holds that despite the advance in supermarkets, convenience stores, and other modern formats, including e-commerce, African consumers on average continue to buy more than 70% of their food, beverages, and personal care products from the continent’s more than 2.5 million small, independent shops.
In addition to some of the earlier listed factors which encourage traditional shopping, the BCG study highlighted other prevailing reasons.
‘‘Several factors make traditional retailers remarkably resilient. Small shops offer the proximity, flexibility, and convenient operating hours needed to serve their communities. They also often allow customers with limited incomes to purchase small quantities on credit,’’ the report suggests.
The BCG report is bolstered by another research conducted by the Oxford Business Group which attests to the power of traditional retail. The study noted that Nigerian shopping is still heavily dominated by the world of neighbourhood stores, street vendors and open markets. Although the study predicts that this will change with time, it insists that traditional retailers will continue to dominate for the following reasons.
‘‘One is taste: even of those who can afford to shop in malls or supermarkets, many prefer more traditional ways. Another is a tendency to shop frequently rather than stock up.
And deficient public transport means that malls are not very accessible to those without cars. Yet another edge may be cost-related, as pointed out to the local Business Day in April 2012 by sector analyst Cedric Bra.
Using informal labour, often selling goods bought illegally, and frequently operating unregistered and therefore untaxed, smaller shops can keep costs low. Contrast the modern retailers, which have high fixed costs and visibility, having to obey the rules in respect of tax and sourcing.
Taken together, noted Bra, this means that modern grocery retailers’ prices are on average 10-20% higher than those found in unregistered outlets.’’
Nevertheless, one can no longer deny the growing influence of e-commerce or online shopping, as a useful and convenient alternative for a growing band of savvy shoppers. This can be attributed to the rise in internet connectivity, greater exposure among the younger members of the population, the impact of the COVID-19 pandemic which brought the power of online shopping to the fore, as well as the ease and convenience that accompanies digital shopping.
Also worth mentioning is the growing awareness and appetite for e-commerce among Nigerian shoppers. A survey conducted by Philip Consulting in 2016 in Lagos, Abuja, Oyo, Delta, Kaduna and Rivers States revealed that at least 51% of respondents sampled still prefer to shop in-store, while 49 preferred online shopping. But between 2014 and 2016, 97% disclosed that they have currently shopped online, at least once per year.
E-commerce is also being embraced by a growing segment of the population because they do not face some of the structural challenges that confront traditional retailers.
One of this is inefficient distribution systems that often force retailers to close their shops for several hours so they can go purchase goods from wholesalers, making it hard to obtain or retain sufficient inventory – a pain-point that tech-driven platforms such as TDiLife, a major FCMG and lifestyle products distribution giant headquartered in Lagos, are helping these small businesses overcome.
Further boosting the popularity of e-commerce is the range of options afforded the shopper. From the comfort of one’s living room, bedroom or office, you can check out an array of products from the biggest brands on the platform of competing players at the click of a few buttons on your device – smartphone or laptop.
Also closely related to this is the fact that one can do this at any time of the day. In other words, e-commerce is a 24-hour operation, one that allows shoppers access to preferred items round the clock, without having to worry if the market is closed or whether the seller is yet to open or has locked up their kiosks to go to church/mosque or attend to other pressing personal issues, as may be the case with traditional retail.
But more importantly, e-commerce has the beneficial attribute of enabling Nigerians live out their price-sensitive proclivities.
Here is the catch. The average Nigerian is a price-conscious freak. We get unusually emotional or irritable at the prospect of being made to pay a higher price when we can avoid it. In the same way, we are often triumphant, giddy with excitement and fulfilled when we succeed in extracting a discount, a deal, a better price than stated for a product or item.
Certainly, e-commerce is best placed to sate this thrifty appetite.
A 2019 GE Shopper Research Study revealed that a growing number of consumers extensively research and compare prices and offers before making major purchases. According to the study, 81% of consumers go online before shopping and spend an average of 79 days gathering information before making a major purchase.
Further, the study disclosed that the availability of financing options continues to be a key factor in a shopper’s choice of retailer, with nearly half of all shoppers researching payment options online before visiting a store.
The above aligns with a 2017 Retail Dive Consumer survey.
The findings show that 56% of shoppers say they visit stores — at least occasionally — to first see, touch and feel products before buying them online. Additionally, one-third of shoppers say they make this practice a habit, reporting that they always or frequently go to stores to see or try out items before buying on the web. One in 10 shoppers say they always visit a store to see items they then buy online.
Here in Nigeria, it is common for shoppers to explore and compare prices among the major e-commerce firms before making up their minds, thereby affirming the primacy of price in the decision-making process. But where does product quality stand in the mix? Given a choice, would you sacrifice quality on the altar of cheaper pricing? This is the dilemma that confronts many online shoppers in Nigeria today.
Nevertheless, several studies point to the fact that quality remains key for most consumers, even ahead of price.
This takes us back to the recent emergence of e-commerce and its rise as a tool for price comparison. Hardly can one discuss e-commerce in Nigeria today without a mention of Jumia and Konga, unarguably two of the market leaders, but both of which have only been in operation here for 10 years.
Predating this, however, the only other claim Nigeria can lay to anything resembling e-commerce was BuyRight Africa, a platform founded over 13 years ago by Leo Stan Ekeh, one of Africa’s leading techpreneurs and which was way ahead of its time, but reportedly collapsed due to the absence of credit/debit cards at the time, paving the way for the latter-day players.
Still, many would be hard pressed when choosing between price and product quality.
But in the view of Durogba Arogundade, an e-commerce researcher based in the UK, the decision ought to be a simple one for shoppers.
‘‘As a Nigerian, I understand the huge attention paid to price. However, a shopper would only be getting the short end of the stick if they prioritized a sweet price at the expense of a low-quality product. It is a decision that often ends badly.
“The key is finding a balance. This is where brands such as Konga come in, by leveraging their combination of the traditional retail approach represented by strategically located physical stores accessible to the shopper and modern retail, as represented by their online platform.
“You can never go wrong here as research indicates that many shoppers often visit retail stores when comparing prices before buying online and vice-versa.’’
Arogundade’s submission is further supported by insights gleaned from George Nkem, a self-professed avid online shopper.
‘‘I have been shopping online actively for the past six years. I have experienced all the e-commerce firms we have. Today, I can confidently tell you Konga has the best price. Yes. Things are cheaper at Konga across board. But that is not where it ends for me. Quality is also very important.
“So, I would rather choose a place where I can get both. So, I often walk into a Konga store most times as it enables me confirm product quality and compare prices with other platforms online before I pay.’’
In conclusion, the controversy surrounding price and quality can be said to have been laid to rest bby findings from the Retail Dive Consumer Survey.
‘‘Because a majority of shoppers are still visiting stores before buying products online, it remains critical for retailers to provide a high-touch in-store experience.
“Turning physical retail space into showrooms — where customers can try and test products and generally get to know the product better before making the final purchase online — may be the logical next step for retailing,’’ the study asserts.
Terry Ibinabo, an academic, researcher and varsity lecturer, writes from Abuja
Anambra State Government says it is exploring partnerships with the Federal Government and other stakeholders to extend digital connectivity to underserved rural communities across the state.
The Managing Director and Chief Executive Officer of the Anambra State ICT Agency, Mr Chukwuemeka Fred Agbata, disclosed this during a virtual media engagement with journalists on Thursday.
Agbata said rural connectivity remained a major challenge because telecommunications operators were often reluctant to invest heavily in communities where network deployment might not be commercially viable.
He said the state was willing to explore opportunities to leverage Federal Government infrastructure and the Universal Service Provision Fund (USPF) to extend connectivity to underserved communities.
“We understand what digital inclusion means because we are dealing directly with these communities,” Agbata said.
According to him, the objective is to ensure that rural residents are not excluded from the benefits of digital government and the wider digital economy simply because of where they live.
Agbata said the effort formed part of the state’s broader digital transformation agenda, which is targeting deeper digitalisation of government services and a more digitally enabled business environment by 2030.
He said the second phase of the agency’s digital transformation agenda would focus on e-governance, digital infrastructure, smart government and the use of emerging technologies to drive development.
“My core vision is that we would have digitised every single government entity in Anambra State,” he said.
The ICT boss said the digital transformation agenda would extend beyond government ministries, departments and agencies (MDAs) to businesses and residents across the state.
He said the agency was already developing websites for government MDAs and transforming them from mere information platforms into channels for delivering government services.
“We are building websites for all the MDAs. We are also automating them to be able to carry out services and give government support and government services through their websites,” he said.
Agbata said the initiative would reduce the need for citizens to physically visit government offices to access basic services.
He said the Smart Anambra platform had already demonstrated growing demand for remote access to government services.
According to him, the platform recorded about 14,000 visits between July 9 and July 29, averaging approximately 700 visits daily, despite limited publicity.
He said the data indicated that residents were interested in accessing government services online, including applications, permits and identification-related processes.
“What the data is already showing us is that we really need to build a system that allows people to actually get government services remotely,” Agbata said.
He explained that the objective was to allow residents to initiate processes online, complete forms remotely and only visit government offices where physical presence was eventually required.
This, he said, would reduce the time and cost citizens spend travelling to Awka or other government offices to access services.
Agbata said services in areas including hospitals, schools and other government processes were being connected to Smart Anambra.
Anambra Targets 2030 for Digital Government
Agbata said the state’s 2030 target was to deepen the digitalisation of government services and create an environment where businesses could increasingly operate within the formal digital economy.
He said the agency was working with the Ministry of Commerce to promote the formalisation of businesses, particularly SMEs and businesses operating in major markets.
“One of the biggest challenges that we have is that SMEs are not formalised enough,” he said, adding that the agency was exploring partnerships to address the challenge.
The ICT agency boss said the transformation would be gradual because major government initiatives required the necessary approvals and resources.
On the possibility of making Anambra completely paperless, Agbata disclosed that the State Executive Council was already operating a paperless system.
He, however, said the entire civil service might continue to operate a combination of digital and paper-based processes for some time because of the complexity of government operations.
“What might happen is a dual situation,” he said, adding that selected MDAs could be used as pilots for deeper digital transformation.
Agbata also disclosed that the Anambra State ICT Agency had commenced the deployment of a locally trained artificial intelligence (AI) system to automate its operations and explore applications in governance, revenue management and public-sector productivity.
He explained that the agency did not develop a frontier large language model from scratch because of the huge computing and financial resources required.
Instead, he said, it adopted an open-source model, modified it and was training it for specific local use cases.
“We have started doing our own local AI system. It is an open-source system, so we didn’t build our own frontier model. We basically looked at open source and modified it, and we are training it,” Agbata said.
He said the system had already been deployed to automate the agency’s operations end-to-end.
“We have used it to automate our agency end-to-end. Everything that we do now is currently automated,” he said.
Agbata said the agency was exploring how the model could be applied across other areas of government to improve productivity, address revenue leakages and strengthen governance.
He said the AI initiative formed a major part of what he described as the agency’s “2.0” phase following his reappointment by Gov. Chukwuma Soludo.
According to him, the second phase would build on achievements in infrastructure, capacity development, e-governance and smart government while placing greater emphasis on AI and emerging technologies.
Agbata also said the state’s free public Wi-Fi initiative remained operational, stressing that the programme was introduced before the electioneering period.
“The free Wi-Fi didn’t start as a political thing, a campaign thing. It started way before the campaigns,” he said.
He explained that the strategy was adjusted during the campaigns to enable residents to follow the governor’s activities and participate in live engagements while on the move.
According to him, existing Wi-Fi locations, including facilities at the state Secretariat, remain operational, although occasional downtime occurs, particularly during periods of adverse weather.
“There are downtimes now and then because with the rains and all of that, these things have their uptime and their downtimes, but it is still very much available,” he said.
He disclosed that there were currently no plans to establish additional Wi-Fi locations, noting that existing sites were still providing services.
Agbata said the state would continue to develop digital skills and education programmes, including Smart Schools and other capacity-development initiatives.
He also called for stronger collaboration among government, technology companies, telecommunications operators, local technology manufacturers and other stakeholders to accelerate the state’s digital transformation.
He cited the procurement of about 2,000 computers supplied by indigenous technology company, Zinox, as an example of the state’s engagement with local technology providers.
Agbata said the agency would remain open to partnerships capable of supporting Anambra’s technology agenda.
He said the ultimate objective was to build an Anambra where residents and businesses could increasingly interact with government digitally, while technology becomes a central driver of economic development across the state.
United States Government has said that Nigeria is not making significant progress in fiscal transparency, referencing gaps in the country’s budget disclosure, expenditure reporting, public procurement transparency and audit processes.
The assessment is contained in a report by the United States Department of State, which reviewed Nigeria’s fiscal transparency practices in its 2026 fiscal transparency report for countries published on Tuesday.
The report noted that the US government stated that Nigeria made some key fiscal documents available to the public, significant shortcomings remained in the disclosure of budgetary information and the management of public finances.
The report noted that “the government made its enacted budget and end-of-year report widely and easily accessible to the public, including online, but did not publish its executive budget proposal within a reasonable period.”
It also stated that while the Nigerian government had made information concerning the country’s debt obligations publicly available, its budget documents failed to provide a comprehensive picture of government revenues and expenditures.
“The government made information on debt obligations, including major state-owned enterprise debt, publicly available, but budget documents did not provide a substantially complete picture of the government’s revenues and expenditures, or break down expenditures to support executive offices in the budget,” the report stated.
The US government further raised concerns about discrepancies between Nigeria’s approved budget and the actual revenues and expenditures recorded during implementation.
It said, “Actual revenues and expenditures did not reasonably correspond to those in the enacted budget.”
The report also criticised the country’s supreme audit institution, stating that it did not meet international standards of independence and did not publish substantive reports, although it had access to the entire executed budget.
“The supreme audit institution did not meet international standards of independence or publish substantive reports but did have access to the entire executed budget,” it stated.
The assessment, however, acknowledged that Nigeria’s sovereign wealth fund had an adequate legal framework and disclosed information about its funding and the general approach to withdrawals.History
“The sovereign wealth fund had a sound legal framework and disclosed its source of funding and general approach to withdrawals,” the US government said.
The World Bank Group is supporting the expansion of Africa’s digital commerce infrastructure to help small businesses reach new markets, create jobs, and strengthen economic opportunities across the continent.
Through Jumia, Africa’s leading e-commerce platform, the investment is expected to enable approximately 60,000 local annual active sellers to participate more fully in the digital economy, support around 1,800 direct jobs, and create income-generating opportunities for more than 100,000 independent sales agents.
As digital commerce continues to grow across Africa, reliable access to online marketplaces, logistics networks, and digital payments are becoming increasingly important for entrepreneurs and small businesses seeking to expand beyond local markets. Strengthening this infrastructure can help firms increase sales, improve productivity, and connect consumers with a wider range of affordable goods and services.
To support this effort, the International Finance Corporation (IFC), the private sector arm of the World Bank Group, is investing US$25 million in equity in Jumia Technologies AG (Jumia), Africa’s largest public e-commerce platform. The investment will support Jumia’s next phase of growth across its core African markets, strengthening its integrated marketplace and logistics network.
By expanding access to digital commerce tools and services, the investment will help businesses grow, improve price transparency, and contribute to more inclusive and resilient private sector development across Africa.
“The support of the World Bank Group is a milestone for Jumia and for African e-commerce more broadly. It validates both the discipline we have brought to our business in recent years and the tangible impact our platform has on small businesses, jobs, and consumers across our eight markets. With partners like the IFC, we can accelerate the digital commerce infrastructure Africa needs” said Francis Dufay, CEO of Jumia.
“Jumia demonstrates how pan-African e-commerce platforms can expand economic opportunity at scale. Our investment supports the company’s next phase of growth while contributing to create jobs, digitizing supply chains and distributions channels and mobilizing private investment” said Farid Fezoua, Director for Equity, Funds, and Venture Capital at the International Finance Corporation, World Bank Group.
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