Independent
LAGOS – Having existed in the background for centuries, Nigeria’s informal retail market is witnessing massive rejuvenation, thanks to B2B e-commerce brands applying technology to resolve the chronic market problems. In the last three years, new market routes have emerged for retailers, as the industry gradually embraces the digital revolution. Discussed in this article are five ways e-commerce will further boost the informal retail market.
Price stability: Fast-moving consumer goods are the everyday necessities that make informal retail thick, but those familiar with the market would know that the prices of these goods are constantly unstable. One major improvement e-commerce brands bring to this market is to help regulate the price of products. “With our services, we have not only eliminated the need to allocate revenue to transport fares and market fees, we have also regulated the prices of products. Thereby, we ensure that our informal retailers are not affected by unreasonable price hikes. As evidence of this, 96% of our retailers say that our prices are fair and competitive compared to other suppliers,” said market expert and CEO of Alerzo Limited, Adewale Opaleye.
Open market options: The current market structure has lasted for ages, but retailers who are the major link to consumers still mostly end up with the short end of the stick. A chat with these retailers will show that the current market arrangement leaves them at the mercy of distributors: unpredictable prices and scarcity of products, especially during peak demand periods, are a few of the many prevalent issues.
The majority of them would gladly embrace another market route to rival the current distributor/marketer chain. Interestingly for retailers, e-commerce brands not only offer cheaper restocking routes, but also an efficient option that will lead to a competitive and ultimately a more vibrant market.
Improved distribution chain: The activities of e-commerce players in the industry will not only benefit the retailers but the whole distribution value chain.
Since their entry into the market, the B2Bs have reiterated that they are here as market aggregators, who see the current league of wholesalers/distributors as partners, and have no aim of displacing them. Also, the facilities of these B2B e-commerce platforms can be of benefit to distributors. A platform like Alerzo said provides warehousing and fulfilment solutions to suppliers.
The company said it currently owns over 200 vehicles and 20 warehouses to serve thousands of retailers on its platform. Some B2B players have also said current suppliers and distributors serve as a source of product supply for them in certain regions of the country.
Market insight for manufacturers: By their business model, B2B e-commerce brands penetrate hitherto marginalised and underserved retailers mostly in rural settlements.
