“Very, very fine,” Enweasor said, inspecting her purchase before handing over 7,500 naira, or about $47. “And fast service.”
As African economies such as Nigeria’s have taken off, consumers and an emerging middle class have become increasingly important parts of the continent’s growth story. And, much like its counterparts in the developed world, that middle class is going online to shop.
Although it has 160 million people, Nigeria has relatively few formal retail outlets. With Internet use growing fast, Amazon-style Web sites such as Konga and Jumia are fulfilling close to 1,000 orders nationwide between them each day, a little more than six months after their launch. By offering everything from underpants to iPads, and allowing customers to pay cash on delivery, the start-ups — and the foreign investors who have snapped up stakes in them — believe they can capture a significant portion of the consumer market.
Nigerian entrepreneur Sim Shagaya founded Konga last July in a four-bedroom apartment, with 20 staff members. Today the company has 150 employees and a large warehouse in Lagos packed with clothes, books, DVDs, freezers, flat-screen televisions, toys and cosmetics. It also has depots in the capital, Abuja, and Port Harcourt and promises to deliver anywhere in the country within five days.
For Shagaya, the company’s early success is proof of the hunger for consumer goods in the slowly emerging middle class in Nigeria, which has experienced gross domestic product growth of more than 6 percent a year since 2006.
Nigeria’s infrastructure challenges and the lack of quality bricks-and-mortar stores has also helped. While several Western-style shopping centers have opened across the country in recent years, the high cost and the scarcity of suitable land in densely packed cities such as Lagos have curtailed retail development.
Lagos, which has 12 million people, still has only two international-standard malls of at least 24,000 square yards, according to the private equity fund Actis, compared with 74 in Johannesburg, South Africa, which has a population of 4 million. Frequent gridlock is a further disincentive for people to leave home.
“It’s not so much there’s this appetite for online shopping, as that there’s an appetite for shopping,” Shagaya said. “Retail here is still mostly informal, fragmented and inefficient. People want convenience, which gives us the opportunity to leapfrog with e-commerce.”