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Key Insights into Nigeria’s E-Commerce Market

Nigeria E-commerce Market Data
23

Jul

Key Insights into Nigeria’s E-Commerce Market

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Insights » EMEA » Key Insights into Nigeria’s E-Commerce Market

As the most populous country in Africa, Nigeria plays a significant role in the continent’s e-commerce landscape. Its e-commerce penetration is steadily increasing: online sales now make up 6% of the country’s total retail sales,1 which is low by global standards but one of the highest shares in the region.

This article offers a comprehensive overview of Nigeria’s e-commerce landscape, sourced from external data curated by the PCMI team.

Current State of E-commerce in Nigeria

There is plenty of potential for e-commence development in Nigeria. The estimates from the International Telecommunication Union (ITU)—published in 2023—indicate that only 35% of individuals in Nigeria were using the Internet as of 2022.2

The e-commerce market in Nigeria reached a volume of US$15 billion in 2023 and is expected to reach US$33 billion by 2026, according to PCMI research and analysis.3 This data, specific to B2C e-commerce sales, differs from the figures shared by WorldPay (2024).4 WorldPay’s figures include B2B surveys in their methodology and estimated Nigeria’s e-commerce market to have a volume of US$19 billion in 2023. In Nigeria, e-commerce purchases represent 6% of total retail sales, which is similar to data we have tracked for Latin America in our Data Library.

Profiling the Nigerian Online Buyer

The following data could help to better understand the spending behavior of the e-commerce shopper in Nigeria:

  • On average, each Nigerian spends US$68 a year with e-commerce merchants, as of 2023.5

  • By 2026, PCMI estimates the e-commerce annual spending per capita in Nigeria will reach US$ 137.

  • People still have a strong reliance on cash-based payment methods in Nigeria: 23% of online sales in Nigeria are paid through this channel, one of the highest shares in Middle East and African markets.6

  • 88% of online purchases made by Nigerians are through phones or tablets.7 That share is expected to incline even more in favor of mobile. There are 102 mobile cellular subscriptions per 100 people in Nigeria,8 and new mobile payment options are emerging, such as MoMo Payments and SmartCash, both introduced in 2022.

Top E-commerce Payment Methods and Devices in Nigeria

Many online shoppers in Nigeria are still using cash-based payments, and these represented 23% of ecommerce sales as of 2023, followed by bank transfers (22%) and debit cards (20%).9 It is important to note that digital wallets are taking off in Nigeria and will reach a 22% penetration in the Nigerian e-commerce landscape by 2027 (from a current share of 11% in 2023), according to WorldPay. The most representative wallets in Nigeria include MoMo, JumiaPay, Paga, Carbon, among others.

E-commerce Payment Methods in Nigeria, 2023

Top-Selling E-commerce Product Categories in Nigeria

According to ECDB, these are the best-selling online product categories in Nigeria based on e-commerce revenue share in the Nigerian market in 2023:10

  1. Hobby & Leisure (24.1%)
  2. Electronics (23%)
  3. Fashion (19%)
  4. Forniture & Homeware (11.5%)
  5. Care products (8.8%)
  6. DIY (8.1%)
  7. Grocery (5.5%)

Another report from Aftership (2024)11 classifies products based on total monthly sales. The list is as follows:

  1. Business & Industrial (23.3%)
  2. Job & Education (3.8%)
  3. Consumer electronics (2.4%)
  4. Beauty & fitness (2.8%)
  5. Apparel (2%)

Nigeria E-commerce Leading Online Stores

As for the top online stores in Nigeria, the biggest player (as of e-commerce revenue) is Jumia, followed by Slot and Ajebo Market.12 Other popular marketplaces include Konga, DealDey, PayPorte and Kilimall.

Key Insights into the Nigerian E-commerce Market

Mobile money is driving financial inclusion in Nigeria

Mobile shopping in Nigeria could experience a peak in the coming years, as mobile money is driving financial inclusion through two kinds of providers: Payment Service Banks (PSBs) and Mobile Money Operators (MMOs). According to a GSMA report (2024)13, SmartCash PSB and MoMo PSB (two services that received the PSB license in 2022), from the companies Airtel and MTN respectively, have grown significantly, with around 20 million registered customers each. MoMo PSB had at least 3.1 million monthly active users as of June 2023, a third more than the previous year.

Social media is the leading e-commerce channel among MSMEs

A GSMA e-commerce survey in 202314 revealed that 56% of micro, small and medium enterprises (MSMEs) in Nigeria sell online only through social media, while up to 19% use social media plus another platform such as a website or a marketplace. The situation is similar in other African countries like Kenya and Egypt.

Use of e-commerce channels by MSME2 in selected markets in Africa

E-commerce in Nigeria Relies Heavily on Cross-Border

According to Boßerhoff & von der Decken (2022),15 “Nigeria is highly dependent on cross-border trade since the country imports a wide range of goods. While more than 25% of imported goods in Nigeria come from China, Europe, or India, some neighboring African countries also play a vital role.”

However, logistics and infrastructure pose significant challenges for e-commerce development in Nigeria. Poor road networks, inconsistent electricity supply, and high fleet costs due to vehicle importation all contribute to these barriers, resulting in high delivery costs and longer delivery times. To mitigate these issues, e-commerce companies in Nigeria should partner with reliable courier services that understand the local scenario. Additionally, establishing fulfillment centers strategically can help streamline operations and reduce delivery times.16,17

Next Steps

Reach out to us to discover the top e-commerce payment methods in Nigeria and how your business can leverage these opportunities with our specialized consultancy.

PCMI specializes in global payments market research and intelligence for Asia (including China, India, Indonesia, Japan, Singapore, Malaysia, Philippines, Australia, and more), Europe (UK, Spain, Portugal, France, Italy, Germany, Poland, Sweden, Turkey, and more), Africa (Egypt, Morocco, Kenya, Nigeria, Ivory Coast, Ghana, and South Africa), and Latin America and the Caribbean (LAC).

Keep up to date with our e-commerce, payments and crypto insights:

  1. WorldPay from FIS, 2024. “The Global Payments Report 2024” ↩︎
  2. International Telecommunication Union (December 2023). “Digital Development Dashboard – Nigera” ↩︎
  3. Ppro, n. d. “Payment methods in Nigeria”. Retrieved July 2024. ↩︎
  4. WorldPay from FIS, 2024. “The Global Payments Report 2024” ↩︎
  5. PCMI E-commerce Data Library, 2023 ↩︎
  6. WorldPay from FIS, 2024. “The Global Payments Report 2024” ↩︎
  7. PCMI E-commerce Data Library, 2023 ↩︎
  8. World Bank, 2022 ↩︎
  9. PCMI E-commerce Data Library, 2023 ↩︎
  10. ECDB, 2024 ↩︎
  11. Aftership, 2024. “eCommerce Statistics in Nigeria 2024” ↩︎
  12. ECDB, 2023 ↩︎
  13. GSMA, 2024. “The State of the Industry Report on Mobile Money 2024” ↩︎
  14. GSMA, 2023. “E-commerce in Africa: Unleashing the opportunity for MSMEs” ↩︎
  15. Tom Alexander Boßerhoff & Jasper Andreas von der Decken (2022). A qualitative study on challenges in the Nigerian E-Commerce landscape and solution approaches. Master Thesis in Digital Business. Jönköping University, Sweden. ↩︎
  16. NPL Limited (2023). “E-commerce Delivery and Logistics Considerations in Nigeria” ↩︎
  17. Teja, Ravi (2017). “E-commerce Logistics in Nigeria – Indian perspective” ↩︎
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PCMI Payments and Commerce Market Intelligence
PCMI helps you Grow, Measure and Protect your business through original data, proven analytical methodologies, and invaluable industry expertise.
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Payments and Commerce Market Intelligence
PCMI
info@paymentscmi.com

PCMI helps you Grow, Measure and Protect your business through original data, proven analytical methodologies, and invaluable industry expertise.

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