Nigeria’s B2B Commerce Reset: Why Control, Not Scale, Will Determine the Winners

Nigeria’s B2B commerce sector is undergoing a quiet but decisive reset. In the last three years, what was once a high-growth, venture-backed segment has seen a wave of restructurings, pivots, and distress signals.

The struggles of Alerzo, the operational recalibrations at Vendease, and the strategic pivots of Sabi are not isolated events. At the same time, players like TradeDepot are moving in a different direction, pursuing backward integration to gain greater control over product supply, improve margins, and reduce dependence on intermediaries. Taken together, these developments point to a broader reality: The industry is not failing. It is correcting.

Nigeria’s informal retail market remains massive, often estimated to account for over 80% of total retail activity, with millions of small, fragmented merchants operating nationwide.

This scale initially attracted capital and shaped early models built on aggregation: connect retailers to suppliers, digitise ordering, and increase transaction volume.

But the scale in Nigeria is deceptive. Retailers are fragmented, price-sensitive, and non-exclusive. Demand is inconsistent, while supply chains remain layered and inefficient. As a result, transaction volume alone does not translate into predictable revenue or strong margins.

At its core, FMCG distribution operates on thin margins, typically between 2% and 6%.
Yet many B2B platforms built cost structures that assumed otherwise. They invested heavily in warehousing and inventory, delivery fleets and logistics networks, merchant acquisition teams, and technology infrastructure.

Even asset-light models, which avoided heavy physical infrastructure, still faced the same constraint: low-margin transactions cannot absorb high operational complexity.

To drive growth, several platforms introduced credit, extending working capital to retailers to increase order frequency and basket size.
However, this created a structural imbalance. Most B2B operators purchased inventory upfront in cash, sourced from distributors offering limited or no credit terms, and earned thin intermediary margins.

They then extended credit to retailers for 30 to 60 days or more, while repayment cycles often stretched beyond expectations. In many cases, they relied on external financing or debt to sustain these credit systems.

This resulted in a dangerous equation:
Short cash outflows + long receivables cycles + thin margins = inevitable financial strain.
Without rapid inventory turnover, the model becomes structurally fragile.

A deeper issue compounded this challenge: most B2B startups did not have direct access to manufacturers. Instead, they sourced from first-layer distributors and intermediaries with fixed pricing and limited flexibility. This meant:

No meaningful margin expansion beyond distributor economics,

No pricing advantage in a highly price-sensitive market

No control over supply continuity.

In effect, they became middlemen competing with other middlemen, while carrying higher cost structures and greater financial risk. Amid this correction, a different pattern is emerging. Rather than simply facilitating transactions, more resilient players are moving toward systemic control of the value chain.

This includes control of financial resources (credit tied to structured purchasing behavior) control of product supply (direct manufacturer relationships and curated SKUs), and control of logistics flows (reliability and orchestration). Increasingly, it also includes backward integration into manufacturing or private-label production.

By moving closer to production, companies can secure supply, improve margins, reduce dependency on intermediaries, and supply retailers on their own terms.

This is not about owning everything. It is about controlling where value is created and captured.
The earlier generation of B2B platforms largely operated as transactional layers, connecting buyers and sellers and earning small margins on each trade. But in a fragmented, low-margin market, transaction-based models struggle to scale sustainably.

What is emerging instead are system-based models: Retailers are guided toward predictable purchasing behavior. Credit is tied to fast-moving,high-velocity SKUs. Replenishment cycles are shorter and more frequent. Supply is increasingly controlled or influenced.

In this structure, the business is no longer just moving goods, it is engineering repeatable economic cycles. Much of the industry debate has focused on whether platforms should be asset-heavy or asset-light. This framing is incomplete. Being asset-light reduces cost, but it does not create a durable advantage on its own. A platform can be asset-light and still lack pricing power, supplier leverage, customer retention, and predictable cash flow.

In other words, it can remain structurally weak despite operational efficiency. The ongoing reset is clarifying a central truth: In Nigeria’s B2B commerce sector, advantage comes from control, not just scale. Control of capital flows (who finances trade and under what terms), control of product supply (who sources directly and captures margin), and control of distribution reliability (who ensures consistent fulfillment).

Without meaningful control across these levers, sustainable profitability becomes difficult to
achieve.

Conclusion
Nigeria’s B2B commerce opportunity remains significant. Informal retail will continue to dominate, and inefficiencies across the supply chain still present real opportunities.

But the pathway forward is clearer now: The winners will not be those who move the most goods, but those who control how those goods are financed, sourced, and distributed. In a market defined by thin margins and fragmentation, participation is easy. Control is what endures.

Analysis by Ayowole Delegan, Strategic analytics leader with over 10 years of experience in market research and commercial analytics.

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