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E-Commerce Growth Opportunities in Nigeria: Navigating Challenges and Innovations

Nigeria, the 8th most populous country and a leading oil producer, faces significant challenges in developing its e-commerce landscape. High living costs in cities like Lagos and issues such as fraudulent activities, limited payment and shipping options, and complex website structures hinder progress. However, platforms like pay.com.ng and simple.com.ng are addressing these concerns with ultra-secure payment systems, integrated services, and innovative solutions. With ongoing beta testing, partnerships, and planned features, the Nigerian e-commerce market is poised for growth, attracting investments and paving the way for a thriving online marketplace.

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E-Commerce Growth Opportunities in Nigeria: Navigating Challenges and Innovations

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  1. Nigeria • 8th most populous country (150Million people) • 8th largest producer of oil • Business capital city, Lagos, ranked 30th in cost of living. • Only US city ahead of it is NY, 22nd, LA 55th, ...Chicago 84th • Source: mercer.com, Forbes magazine , NY Times

  2. Current state of e-commerce in Nigeria • Paucity of e-commerce websites • Fraud, identity theft, phishing • Limited payment options • Limited shipping options • Complex websites

  3. pay.com.ng • Make payments online at pay.com.ng • Make payments using a web-enabled phone • No need for credit/debit card or bank account • Ultra-secure system • 3-factor authentication: password, pin and hardware generated number • 128 bit SSL website • 160 bit SHA encryption of sensitive data • Easy to use website

  4. simple.com.ng • Integrated Internet services • Auction • Web shops • Real estate listing • Job listing • Auto listing • Classifieds • Advertisements • And more .......

  5. 9zencart • Open source software • Free to everyone • Only uses pay.com.ng • Features include: gift certificates, coupons, discounts, shipping costs calculator

  6. Milestones • pay.com.ng system in beta testing • simple.com.ng in beta testing. More features planned • Planned integration with 6 of the 24 banks • Pilot with Virgin Nigeria Airways • Pilot with Mona Hotels • Partnership with naijamessenger.com, Yoopta • Listing agreements with real estate agents and auto sellers

  7. Financing sought • $5M to cash flow positive • Use of funds • Marketing budget $3M • Computer equipment to connect with 24 banks $720K • Computer servers and storage $280K • Operations $1M

  8. Financing cont... • $1M first round • Use of funds • Equipment to connect to 10 banks $300K • Marketing $200K • Computers for servers and storage $100K • Operations $400K

  9. Revenue model • pay.com.ng 0.5% transaction fee • simple.com.ng • $0.85 per listing for auto, real estate, job and auction • Additional 3% of closing value for auction • Advertisements • Future revenue from SaaS offerings

  10. Cash flow projection Cash flow in 000's (USD)

  11. Team • Management • Lanre Sarumi CEO • Jamie Sabin CTO • Ibukun Dalmeida CMO • Advisory board • Gbade Alabi, CEO CBC Ltd • Seun Peters, Partner, South Pacific Solicitors • Nike Ogunlana, Former ED, ARM Ltd • Jason Sissel, Founder, Sissel Capital Management

  12. Exit strategy • Separate IPO of pay.com.ng and simple.com.ng in 4 years • Acquisition by eBay, Yahoo!, MSN, Amazon or Google

  13. Summary Hindsight is perfect, foresight is priceless

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