E-commerce business is simply the business of connecting buyers to sellers over the digital medium. The business of e-commerce became an instant success because of the convenience it offers buyers to do their shopping of so many products on one spot online. They can sit in the corner of their bedrooms and with a click on their mobile device order the delivery of as many products that they want and have them delivered to their doorstep. This business opportunity has become so huge that the e-commerce market in Nigeria (go-globe.com) was valued at about USD 8.53billion in 2023 and is expected to reach USD 14.92 billion by 2029, a total growth of 74.91% and growing at a Compound Annual Growth Rate of CAGR of 11.82%, during the forecast period of (2024-2029). We can compare the e-commerce market of Nigeria with the e-commerce market of the US, which according to (statista.com) was USD1,065.68 billion in 2023 and projected to reach USD1,880.68 billion in 2029, a total increase of nearly 76.47%. The population of Nigeria (worldometers.info) in the base year 2023 was 227.9 million while that of the US was 334.9 million in the same year. The US population was 1.47 times that of Nigeria, however the e-commerce market size/revenue of the US was 124.93 times that of Nigeria. This shows the relatively smallness of the Nigeria e-commerce market. If we stretch the comparison to the Gross Domestic Product GDP figures, we see that in 2023 the GDP of US (Statista.com) was USD27.36 trillion and that of Nigeria at the same year was USD363.8 billion. In the year, the US GDP was 79.21 times that of Nigeria.

With this analysis, the population of US was found to be 1.47 times of Nigeria in 2023, the GDP of US was 75.21 times that of Nigeria in the same year but if we look at the difference in the size of the e-commerce market in the two countries, we can see that the US e-commerce market size was 124.93 times that of Nigeria. That means that the Nigerian e-commerce market is still much untapped.

However, looking at the above analysis of e-commerce markets in Nigeria and the United States of America, one can see that the potential for new entrants in Nigeria is very high. It is a market that has high growth potential and can accommodate more players particularly for those intending to play within niche markets, which are markets with relatively few existing players.

Starting an e-commerce business is relatively easy. It is a ground floor opportunity that you can start with whatever funds that you have in your possession and scale the business over time.

The procedure to start it is as follows: –

The first step is to pick a niche that will engage your attention. I always recommend niches because they are opportunities within the market that not too many people are aware of. For example, if you want to address market for products within the animal husbandry sector, that is products targeted at dogs, goats, chicken, cattle, etc, you have a good chance of capturing a sizable chunk of the market before others will wake up to fight you for market share.

The second step is to draw up your prospect list. You can start with a modest number of 100 with the intention of scaling up to 1,000 within the first three months. Prospect list is a list of people you know will need the product that you are selling. For our animal products e-commerce platform for example, you have dog owners, veterinary doctors and practitioners, etc., who are likely customers of the platform who will like to do their shopping on one spot.

The third step is the digital platform you will use to connect with the market. This will depend on the funds that you have at your disposal. If you don’t have the money to commission an application, you can start with your WhatsApp group, Facebook group or even your email account. These are very effective platforms for starters who may not be too cash rich at the beginning. All the above should have been in a well-articulated business plan that you will use to guide your activities in the first five years.

Let us look at the 7 niches of e-commerce business in Nigeria where the opportunity is still very high and for smart entrepreneurs to take advantage of.

Professional companies start from professionals like doctors, lawyers, engineers, architects, quantity surveyors, building engineers, pharmacists, etc. The number of professional firms presently in Nigeria should not be less than 500,000. This is a huge market. So if you have an e-commerce business to connect clients to this group of business that is a big opportunity. The e-commerce platform will be structured in line with the aspect of professional practice that you want to project. For example, if you want to emphasize professional firms that have practice competence you can project their experience in terms of number of clients they have served. You may also want to project the quality of their staffing. Another attribute may be testimonials from satisfied clients. Your professional practice e-commerce platform will be looking at charging a fee under two or three categories for the firms to list. The first category may be free listing but with limited access by prospective clients. Other premium categories with listing fee may be created. For example, for those with staff size of five and above or those who have been in practice for at least five years. These distinctions will help endow goodwill that will pull more patronage towards the fee-paying professionals on your listing.

IT products range from both software and hardware dimensions. You can specialize in any of the two or you can combine the two in your e-commerce business. The beauty of IT products is the never-ending supply of new products and upgrades. This has both its positive and negative sides. In order to overcome the negative dimensions of the rapid obsolescence factor of the IT industry you may need to accompany the listing of your products with brief product reviews. This is doing a short write-up on each product listed on your site. This review will state the most important attribute of that product and also highlight a cautionary statement about what buyers should watch out for it terms of need for upgrade or replacement or swapping for current versions. This will supply the needed credibility that will boost the goodwill of your brand. For those in IT e-commerce you need to be careful on the issue of intellectual property infringements

The Fintech industry in Nigeria is booming today more than at any time or within any geographical entity in the developing world. Digital payments have been so simplified in Nigeria and penetration is very high thereby throwing up a huge opportunity for players who will do business in areas bothering on the Fintech industry. Fintech industry players include digital payments processing companies, Point of Sale operators, money transfer companies, internet transactions payment processing companies, etc. For an e-commerce operator servicing this industry, the business model will be patterned along the line of the technology of digital payment switches, i.e., a gateway to access a variety of services via your own platform. It is a model that can be configured as an app, but for investors who are coming in with very minimal funds, you can come in as an agent for the numerous players in the industry.

The market for commodities in Nigeria today is very huge. Commodities range from basic agricultural products like cocoa, palm oil, cassava, ginger, groundnut, etc. There are also solid minerals like tin, coal, barites, gold, diamond, etc. This is an industry where there is frequent change in market prices. So, the e-commerce operator must have a mechanism to report movement in prices either on daily or weekly basis. One should also be ready to supply information on quality of the products that are being listed on your site for credibility reasons. As an e-commerce operator, you should be able to charge a commission from both the sellers of the commodities and buyers at the same time.

The educational products market in Nigeria is a market that is booming presently due to the fact that Nigeria has a growing population and a large chunk of the population is within the school age group. For example, about 50% of the population are within the 0-16 years of age, the group still in either elementary, primary and secondary school sections. It means that a sizeable proportion of income of households is spent on the education of their school age children. That is why private schools have flooded our educational landscape. This is a huge opportunity for e-commerce business featuring educational products of all kinds and descriptions. One can even start with a sub-niche of educational books and stationeries. Somebody else can go into wears and accessories. This list is endless.

The fashion industry in Nigeria today is booming because of the rapid population growth of Nigeria. The population of Nigeria is very youthful meaning that we have so many young people including those within the school age and working-class people who are still considered as young adults. As far as fashion is concerned, the youth are more fashionable than the older generation and so this accounts for the high attractiveness of the fashion industry in Nigeria. Fashion goes from products like clothing, footwear, underwear, clothing accessories, etc. The same way people, most especially women flood fashion stores and supermarkets is the same way they patronize online fashion stores. Because of advancements of information technology, it is easy for made to fit clothing to be ordered online without much concern on how it will be made. The fashion industry offers so many sub-niches an e-commerce operator can look at that others are not aware of yet. Some are areas like materials for dresses, fashion accessories, etc.

The market for animal products ranges from feed, to medication, machineries for processing and storage, etc. Nigeria has one of the largest population of cattle and other types of pets and livestock in Africa. Sale of live animals is also captured in the e-commerce dimension of animal products. This is a business opportunity that is available even for those with minimal capital outlay. Also based on the sheer size of the market for animal products, this business is better started on a regional scale, that is being restricted to a geographical area and with time one can grow to extend operations to more areas. Animal products have the issue of lifespan, particularly when you are talking of dressed products and so one must ensure that the quality of products up to the point of delivery or consumption is not compromised.