Nigeria is one of the largest countries in Africa, geographically straddling the equator and with a land area of about 923,768 square kilometers, it is the seventh largest country in Africa. Meanwhile, Nigeria is the most populous country in Africa, with data showing that from early 2023 to early 2024, Nigeria's population increased by 5.3 million, up 2.4% year-on-year. As of January 2024, Nigeria has a total population of 226.5 million people with an average age of 17.3 years.
Figure: Nigeria map
According to DataReportal, as of early 2024, Nigeria has 103 million internet users, a year-on-year increase of 2.2%, and the internet penetration rate is 45.5%. Nigeria has a total of 205.4 million active cellular mobile connections, which is equivalent to 90.7% of the total population.
With the increase in Internet users and the expansion of young consumer groups, the Nigerian e-commerce market has grown rapidly in the past few years, which is a fact that is obvious to all. But at the same time, Nigeria is also in the throes of reform, with problems such as rising prices and inflation.
Since taking office in May 2023, Nigerian President Bora Tinubu has introduced a series of economic reform measures, including the elimination of oil subsidies and the unification of the multiple exchange rates of the naira, which aim to address Nigeria's long-standing economic problems, such as high inflation, food inflation, and the withdrawal of foreign investment. However, the implementation of these reforms has led to a short-term instability in Nigeria's social situation, with soaring inflation and an increase in the cost of living.
Chart: Changes in Nigeria's inflation rate since 2023
数据来源：Nigeria National Bureau of Statistics
Oil is the backbone of Nigeria's national economy, with oil export revenues accounting for one-third of its GDP. However, Nigeria does not have the capacity to process crude oil into refined oil products, and needs the proceeds from crude oil exports to purchase refined oil products and petroleum products. The Nigerian government's fuel subsidy allows ordinary people and businesses to use fuel at a lower price and develop related industries.
Fuel subsidies have been in place since the 70s of the last century, and now they have become a heavy burden on the Nigerian government, especially in the context of the collapse of international oil prices and the economic downturn, the Nigerian government can no longer bear the fuel subsidies. Decades of subsidy spending have squeezed government budgets for health, education, agriculture, and defense, so while this policy has led to higher fuel prices and inflation in the short term, in the long run, the funds can be reallocated to other key areas to drive social development.
Photo: Nigerian Naira
In addition, the elimination of fuel subsidies can make prices more realistic to market supply and demand, and the combination of exchange rate system reform can be combined to obtain an exchange rate system that accurately reflects the true value of the naira. It is not difficult to see that the Tinubu government hopes to take the initiative to boost the Nigerian economy through these means, achieve economic diversification, sustainable development, and finally get rid of the negative impact of external exchange rate fluctuations and inflation, and move towards a prosperous and stable future.
Nigeria's low dollar reserves and the accumulation of about $5 billion in foreign exchange in the interbank market have led companies to buy dollars in parallel markets, leading to higher interest rates. The depreciation of the Nigerian naira has increased the demand for US dollars, but the instability of foreign exchange interest rates and the reluctance of investors from other countries to invest in Nigeria have led to a shortage of US dollars, forming a vicious circle. Therefore, the Tinoub government needs to unify multiple exchange rates in order to boost foreign investor confidence and increase foreign exchange.
Pictured: Street View of Nigeria
Foreign exchange affects all imported products, but foreign exchange does not affect the market competitiveness of Jumia Global products. Although the offline market reacts very quickly to FX, most of Jumia Global's products do not have concerns about local production. Therefore, Jumia Global sellers will not be affected more than local sellers, and if a product is competitive before the increase in foreign exchange, then after the increase in foreign exchange, the competitiveness of this product will remain unchanged.
Meanwhile, on January 24 this year, Nigerian industrialist Aliko Dangote, the richest man in Africa, opened operations in Nigeria's first oil refinery (Dannett Petroleum Refineries). The $19 billion facility produces diesel and jet fuel with a capacity of 650,000 barrels per day. As Nigeria's first private refinery, Dennett described the refinery project as "a game-changer for our country".
Pictured: Dennett Refinery
Nigeria is one of Africa's largest oil producers, and the plant is expected to meet Nigeria's demand for petrol, diesel, kerosene and jet fuel at 100% full capacity. In the long term, if the project achieves its desired goal of achieving self-sufficiency in fuel consumption in the local market, it will reduce the import of refined fuels. Nigeria does not need to buy large quantities of US dollars to import refined oil products, and can earn US dollars by selling refined oil, ultimately improving foreign exchange stability.
Nigeria is Jumia's largest market and will continue to be Jumia's market focus in the future.
1. Jumia offline research
At the beginning of this year, Jumia's China team went to Africa and landed in Nigeria to conduct market research. With the help of local colleagues in Nigeria, the Jumia China team had in-depth exchanges with local Nigerians to understand their experience of Nigeria's economic reforms, as well as their attitudes and behaviors towards online shopping under the current economic conditions.
For online shopping, they feel that e-commerce is more cost-effective than offline shopping, and they can get a wider range of products at a lower price, so online shopping is still attractive.
Pictured: Street View of Nigeria
2、2024 Jumia NG战略调整
Jumia has made a number of changes to the Nigerian market. First of all, Jumia has reappointed two Nigerian site leaders this year, Sunil (CEO of Nigeria Site) and Femi (Head of Business of Jumia Global Nigeria), both of whom are outstanding managers who have gone above and beyond to make strategic adjustments to the current state of the Nigerian market.
At present, the effect of Jumia's reform for Nigerian sites is also gradually emerging, such as in Q4 of 2023, the problem of warehousing in Nigeria has been greatly reduced. In Q1 2024, Jumia has added a dedicated position to be responsible for JG-related work to ensure more rapid feedback and problem solving. In addition, the Nigerian site has also adjusted the commission and storage fee structure of overseas warehouses, as well as the rules for returns and damages.
Picture: Jumia overseas warehouse
In 2024, Jumia will continue to change the status quo in Nigeria. In Q2 2024, the storage capacity of the warehouse in Nepal will be increased by 12% (and possibly by 30% through the construction of mezzanines) to provide more usable space for JG items, so that sellers no longer need to send goods to three different warehouses. In addition, Jumia will increase the number of pick-up stations to improve the convenience of shopping for users. Through these initiatives, Jumia hopes to earn the trust of consumers to increase the purchase rate and repurchase rate.
3、Jumia NG布局内陆城市
It is worth mentioning that Jumia will continue to expand into rural areas of Nigeria, because the rural offline market consumption is higher than that of urban areas, but the disposable income of rural residents is also less, so Jumia has a price advantage. In 2023, 12 new cities are planned for the Jumia Nigeria site, and in 2024, this target is updated to 60 cities.
Pictured: Aerial view of Lagos
At present, although the e-commerce market in Nigeria is facing some challenges, the overall outlook is positive. With the increase in government revenues, other key areas of society will make great progress, and a stable exchange rate and a normal business environment will also lead to a stable economy. In the future, Jumia will focus on the change of consumer habits in Nigeria and the improvement of the policy environment, and is committed to creating a more mature and complete e-commerce platform ecology for sellers.
Blue Ocean Africa, Infinite Opportunities. On April 25th, Jumia will hold the first official online investment conference of the year. The Jumia Global team will deeply interpret the latest development trends of the African cross-border e-commerce market, deeply analyze the latest development trends of the African cross-border e-commerce market, provide merchants with accurate category selection strategy guidance, and help everyone easily enter the African market with the latest favorable policies of the platform, seller operation support programs, and exclusive entry benefits.