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Why e-Commerce is on Path to Profitability in Nigeria

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SMEs leverage e-commerce

By Ayomide Oriade

Right from the market entry, the odds were hugely stacked against e-commerce on the continent of Africa. Despite the availability of huge markets such as Nigeria, Egypt, South Africa and Kenya, there were huge doubts regarding the needed technology, customer exposure and requisite infrastructure for effective e-commerce service delivery.

Like in many other African countries, Nigerian consumers were sceptical about e-payment services which were associated with e-commerce. People were grappling with unsuccessful transactions at automated machine stands and loads of complaints of debits on uncompleted transactions.

Till date, even offline shops experience instances where customers prefer cash over Point of sale (PoS) payment options. Added to this were issues bordering on quality, trust, internet penetration and logistics service deficits.

While the aforementioned issues are yet to be fully resolved, many will agree that recent events and COVID-19 experiences have shown that e-commerce can thrive in Nigeria.

Aside from the fact that preventive measures enforced by authorities further extolled the importance of technology-based connection and communication between people, businesses, organizations and processes, e-commerce platforms are being innovative in their service delivery which is rubbing off on their books and customer traction. Their exploits are validating the viability of e-commerce in Africa.

Customer Surge and Profitability

One major argument against e-commerce in Nigeria and Africa is the profitability of the business. The recently released Q2 2020 report by Africa’s leading e-commerce company, Jumia, showed improvement with an increase in gross profit and decrees in operating loss, representing significant progress on the path to profitability.

The report has it that Jumia’s gross profit increased by 38 per cent to €23.3 million in the second quarter of 2020, from €16.8 million in the second quarter of 2019, while operating loss reduced to €37.6 million in the second quarter of 2020, decreasing 44 per cent on a year-over-year basis.

Significantly, the company also made progress in usage growth, as the number of active customers; orders placed showed a significant increase for the quarter.

The report showed that annual active consumers reached 6.8 million, a year-over-year increase of 40 per cent, while orders on the platform grossed 6.8 million, a year-over-year increase of 8 per cent.

“We have made significant progress on our path to profitability in the second quarter of 2020, with Operating loss decreasing 44 per cent year-over-year to €37.6 million. This was achieved thanks to an all-time high Gross Profit after Fulfilment expense of €6.0 million and record levels of marketing efficiency with Sales & Advertising expense decreasing by 51 per cent year-over-year.

“We are navigating these uncertain times of COVID-19 pandemic with strong financial discipline and operational agility which positions us to emerge from this crisis stronger and even more relevant to our consumers, sellers and communities,” commented Jeremy Hodara and Sacha Poignonnec, Co-Chief Executive Officers of Jumia.

Improved Delivery System

Lack of structured national address systems and poor road infrastructure, increases the complexity of deliveries, thus making Last-mile delivery a major challenge in Nigeria. While global brands like eBay and Amazon had the luxury of the US existing logistics structure to ride on in their early years, Jumia, Konga and other African brands had to innovatively establish their own logistics and delivery network.

For instance, Jumia responded by using a learning machine to map out addresses delaying coordinates on deliveries and routes plied, such that as deliveries are made to customers, the mapping coverage improves and delivery routes are optimised. It is thus not surprising that Jumia Logistics and Konga’s

Kxpress has grown beyond servicing only businesses on its platform. Against all odds, Kasuwar Bello, is furthering the course of e-commerce in the North. The first Hausa e-commerce platform is the platform has been on for five years and is building a delivery vehicle, KB Express, for public packaging and delivery service.

Innovative payment solutions

E-payment platforms are crucial to the development and profitability of e-commerce. There has been a tradition of general resentment towards the internet payment system on the African continent, despite increasing craze for mobile technology among African youth.

Though most African e-commerce platforms have relied heavily on cash-on-delivery model, some are making efforts to move transactions towards proprietary payment systems. To encourage the shift, Jumia and Konga offer cashback when customers use their payment systems, JumiaPay and KongaPay respectively.

When Jumia presented its latest report, JumiaPay recorded development. Total payment value on the platform reached an all-time high of €53.6 million, a year-over-year increase of 106 per cent, while transactions on the platform also reached 2.4 million, a year-over-year increase of 36 per cent, representing 35.6 per cent on-platform penetration in terms of orders.

Relevance during COVID-19 lockdown

The impact induced by the COVID-19 lockdown continued to affect the business and it varied greatly from one country to the other.

In Nigeria and South Africa, Jumia faced significant disruption as a result of movement restriction. This disruption persisted during the early part of the second quarter of 2020, before gradually easing towards the later part of the quarter. Its operations were suspended in South Africa during the 2 months of the lockdown and in Nigeria, as they were allowed to deliver only essential products during the 2 weeks of lockdown period. Some of the actions taken by Jumia to support the government and its community included.

Its food delivery business, Jumia Food, which was negatively impacted by restaurant shutdowns starting mid-March, resumed normal operations in late May/early June in most cities where we operate the service.

In selected countries, including Morocco and Tunisia, where nationwide lockdowns were implemented, Jumia experienced a surge in volumes starting mid-March with sustained momentum throughout the second quarter of 2020.

Across all geographies, we have seen increased demand from brands and sellers to join and expand their business on our platform as the COVID-19 crisis further established e-commerce as an important route to market.

Going by the impact of COVID-19 on shopping culture and continuous effort of e-commerce platforms for service improvement, the conversation around e-commerce in Nigeria and Africa as a whole is shifting from that of impossibility to one with huge economic potential. And it can be safely said that this sector has the prospect of being a crucial contributor to the achievement of Nigeria’s digital economy projections.

Ayomide, a Public Relations Executive, writes from Lagos   

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Building 234 Solutions: A Response to Everyday Workforce Challenges

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Owoloye Emmanuel 234 Solutions

By Owoloye Emmanuel

Every business starts with a problem. For us, that problem was hiding in plain sight.

Across organisations, we kept seeing HR professionals, payroll teams, and business leaders spend significant time navigating processes that should be simpler. Employee records sat across multiple systems, payroll processes required manual intervention, and routine workforce tasks often became more complicated than they needed to be.

As businesses grow, workforce operations naturally become more complex. Yet many organisations still rely on disconnected tools and workflows that create unnecessary friction for both employers and employees.

The consequence is more than operational inefficiency. HR teams spend valuable time managing systems instead of supporting people. Business leaders struggle to access timely workforce insights, while employees experience delays in processes that should be seamless.

These weren’t isolated challenges. They were recurring realities across workplaces, regardless of industry or size.

That observation led us to a simple question: what if workforce management could be easier?

What if HR, payroll, and workforce operations could work together within a single, connected experience?

That question became the foundation for 234 Solutions.

We are building 234 Solutions with a clear belief that workplace technology should reduce complexity, not add to it. Our goal is to help organisations spend less time navigating processes and more time focusing on productivity, growth, and people.

As we prepare for launch, our focus remains simple: building practical solutions for real workplace challenges and helping organisations create better experiences for the people who power them every day.

Owoloye Emmanuel is the founder of 234 Solutions

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The Role of TV in Preserving African Stories and Identity

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Preserving African Stories

Scroll through social media today, and you will notice something interesting: everyone is either reacting to a series, quoting a movie line, or debating a character as though they personally know them. Beneath the memes and binge-watch culture, however, lies something deeper. Television remains one of the most powerful tools shaping how Africans see themselves, remember their history, and tell their own stories. In a continent as diverse and expressive as Africa, that matters more than ever.

TV as a Cultural Archive, Not Just Entertainment

Long before streaming algorithms began shaping our viewing habits, television was already preserving African identity. From Nollywood dramas that capture the rhythm of everyday Lagos life to documentaries exploring Maasai traditions and Ghanaian folklore, TV has served as a living archive of the continent’s stories.

It preserves more than entertainment; it preserves language, culture, humour, values, and shared experiences. Unlike fleeting social media content, television allows stories to unfold with depth, exploring the realities of family, tradition, ambition, and modern African life without reducing them to stereotypes. That is the power of TV: preserving not just stories, but perspective.

Why Representation on TV Still Matters

There is a subtle but important truth: if people do not see themselves on screen, they may begin to believe their stories are not worth telling. This is why African TV content is more than entertainment; it is affirmation.

Seeing a character who speaks like you, struggles like you, or celebrates like your community does something powerful. It validates identity and challenges outdated narratives that have historically defined Africa through external lenses.

This is where MultiChoice Group, through platforms such as DStv and GOtv, plays an important role. They do not simply broadcast content; they help distribute cultural memory at scale.

GOtv, DStv, and the Everyday African Viewer

Think about a typical evening in many African homes: the TV is on in the background, someone is laughing at a comedy show, another person is watching a local series, and someone else is catching up on the news. That shared viewing experience remains very real.

Through platforms such as DStv and GOtv, African households are exposed to a blend of local storytelling and global content. More importantly, they have helped amplify African-produced content by bringing Nollywood films, African reality shows, talk shows, and documentaries into mainstream rotation.

It is not just about access. It is about visibility.

A young filmmaker in Lagos today is more likely to believe their story matters because they have seen similar stories broadcast widely. A child in Accra grows up hearing familiar accents and seeing environments that look like their own on screen, not as exceptions, but as the norm.

TV Is Also Shaping Modern African Identity

African identity is not static; it is evolving. Television reflects that evolution in real time.

Today, audiences see:

  • Young Africans balancing tradition and modern dating culture

  • Stories tackling mental health in African households

  • Fashion and music influences spreading through TV series

  • Political satire shaping public conversation

Conversations that were once confined to homes are now being explored on screen, giving audiences the language to discuss issues that were previously unspoken.

In many ways, television is doing what oral tradition has always done: passing stories, values, humour, warnings, and history from one generation to the next. The difference is that today’s griots are writers, directors, and broadcasters.

The Future: From Watching to Owning Our Narratives

The next stage of African storytelling is not just about being seen; it is about ownership.

As more African creators produce content and platforms continue to invest in regional storytelling, television becomes more than a mirror. It becomes a tool for shaping how Africa is represented to itself and to the world.

While streaming continues to grow, television, particularly accessible platforms such as GOtv, remains one of the most effective ways to reach everyday audiences across different income levels and regions. After all, storytelling only matters if people can access it.

African stories are not new. They have always existed in families, on streets, in markets, in history books, and through oral traditions. What television has done, and continues to do, is give those stories a stage wide enough for millions to experience them at once.

The next time you watch a local series or documentary on DStv or GOtv, remember that you are not just being entertained. You are participating in the preservation of African identity itself.

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The Future of AI in Nigerian SMEs: Overcoming Barriers to Implementation

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Kehinde Ogundare 2025

By Kehinde Ogundare

Ask a tech entrepreneur in San Francisco what AI means for their business, and they are likely to talk about competitive advantage, product differentiation, and scale. Ask a small business owner in Kano or Onitsha the same question, and the conversation shifts entirely.

For many Nigerian SMEs, the priority is keeping the lights on, managing costs, and finding sustainable ways to grow in a challenging economic environment. This difference in perspective explains why the global AI conversation, often shaped by assumptions about stable infrastructure, deep capital, and abundant technical talent, frequently fails to address the realities facing Nigerian SMEs.

This matters because Nigerian SMEs are not a peripheral concern. In 2024 alone, MSMEs contributed 46.32% to Nigeria’s GDP, accounting for 96.9% of businesses and 87.9% of employment. These businesses are the backbone of the Nigerian economy, and if AI is going to mean anything for Nigeria’s development, it has to work for them in the daily conditions they actually operate in.

However, research drawing on empirical data from 144 Nigerian SMEs found that inadequate infrastructure, low digital literacy, skills shortages, and regulatory gaps are collectively preventing them from meaningfully engaging with AI. Awareness of AI is high and growing. What is missing is a clear and honest conversation about what adoption actually requires in this specific context. The barriers are real, but none of them are insurmountable. The question is whether the tools, pricing models, and support structures being offered to Nigerian SMEs are designed with those barriers in mind, or whether they have been built for another market entirely.

Subscription models making AI affordable for small businesses

When most small business owners hear “AI,” they imagine expensive software, specialist consultants, and a hefty upfront bill.

That assumption is not entirely wrong, but it describes a particular way of buying technology, not AI itself. The shift that makes AI genuinely accessible at the SME level is the move away from large, one-time capital purchases towards tools that charge a predictable monthly subscription. Businesses can pay for what they use, scale back when necessary, and avoid the debt that a major technology investment can create.

The deeper opportunity here is consolidation. Many SMEs are already spending money across multiple disconnected tools—one for invoicing, another for customer records, another for stock tracking—none of which talk to each other. An integrated platform that handles several of these functions together, with AI built in, can actually cost less than the sum of those separate subscriptions while giving business owners a clearer picture of their operations.

With margins already under pressure, any technology a business adopts needs to visibly show an increase in productivity or bottom line. Subscription-based, integrated platforms, priced transparently and honestly, are the model that best fits this reality.

Infrastructure challenges demand a mobile-first approach

No conversation about technology in Nigeria is complete without confronting the infrastructure problem, and AI is no exception. Nigeria continues to face major infrastructure barriers, including limited broadband access, unreliable power supply, and high data costs, all of which constrain deeper AI adoption. These are structural features of the operating environment that any sensible technology strategy must account for today.

The electricity situation alone is significant. The World Bank estimates that the lack of stable electricity costs Nigeria’s economy approximately $26.2 billion annually, equivalent to about 2% of GDP, forcing many businesses to run on expensive diesel generators. That cost ripples outward.

In practical terms, AI tools built for Nigeria cannot assume a stable broadband connection or a computer that is always powered on. The tools that will actually get used are the ones that work on a smartphone, consume minimal data, and can function offline when connectivity drops, syncing back up when it returns. The mobile phone is already how many Nigerian SME owners run their businesses. AI that meets them there, rather than demanding infrastructure they do not have, is AI that has a genuine future in this market.

The direction is clear: build capability from within, using tools that make that possible. Recent AI performance research reveals that 64% of African workers are already actively using AI at work, signalling massive grassroots readiness and driving forward-thinking organisations across Nigeria, Kenya, and South Africa to aggressively prioritise internal upskilling frameworks to bridge the talent gap.

As the policy groundwork is being laid, the commercial ecosystem is beginning to respond. What remains is a clear-eyed acceptance that AI tools built for this market need to look different from those built for markets with different realities. Low cost, low bandwidth, and usability for non-technical people are not modest ambitions; they are the actual requirements. Build for those realities, and AI has a real future in Nigeria’s SME economy.

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