The Chief Executive Officer of Numero Groups, owner of Dozen Price, an e-commerce firm, Omowunmi Olalere speaks to Raheem Akingbolu about the growth and challenges of e-commerce in Nigeria.
What is your view about online and e-commerce industry in Nigeria?
Among other opportunities, the birth of online shopping that came with the internet boom has redefined Nigerian purchasing patterns over the years. Of course, it has also continued to deepen operations in the financial sector as the banking public and consumers of insurance products now do more online than physical appearance in the banking hall.
Like in every new thing, embracing e-Commerce as alternative shopping experience was, at the beginning, tough for Nigerians. In the last few years, both the operators and consumers have recorded both their high and low moments. While it has eased the mode of transaction, there have also been stories of scammers and attacks on delivery agents.
But today, despite the hitches, it is obvious that consumers who have bought into the system are growing in folds every day.
You launched an e-commerce firm called ‘Dozen Price’ a year ago, what was your mission?
Dozen Price is our online retail store where we sell home groceries, household items, and personal care on bulk purchases using a flexible payment pattern. This service is available to people in corporate organisations, especially paid employment. It has been in existence for over a year now. We started the business in February 2018 and so far, it’s been promising. We’ve been getting clients and we intend to build the brand more than it is.
Can you please give the reason why you target only the working class?
We streamlined it that way because of the selling point. The online dozen stores have a lot of competitors so we thought of what we can do differently. Aside our target market that was cleverly another unique selling point of our brand is the introduction of the flexible payment pattern. When we say flexible payment, you can actually buy your own groceries, your own items and then you pay after a certain time. You can pay at the end of the month or we give you two months to pay. So, it’s easier for us to use people in the paid employment so that we could guarantee our source of repayment from their salary, from their employers. Their employers or the HR pay us at the end of the month. So it gives our clients the comfort that they can actually come online, shop for their items and pay us at a later date.
How do you determine the employment status of your customers?
We have put a measure in place to have basic information about our customers. They need to provide some form of information, we are also registered with CRC, we do credit checks on them to find out their eligibility to determine if we can actually proceed with the facility. People make purchases of N20, 000; N50, 000, to buy indomie, cornflakes, milk and all those basic items that you need in the house. So, what we do is we write proposals to corporate organisations, we write to the HR, corporate organisations, they call us for presentation and then they sell it to their staff.
What informed the decision to start the business in the first place?
To start with, I have passion for e-commerce and credit facility offering, perhaps of my banking industry background. I was inspired because first, I love shopping and second, my professional experience, having resigned from the bank to start my own company. So, I like bulk purchases, I like to buy my things in bulk and the credit that was introduced into Dozen Price was as a result of what I practiced while in paid employment. I was involved in offering credit facility, offering personal loans, salary advance and all that. So, the two mixed together, it was a mixture of passion and professional experience.
Over a year after the launch, what has been the feedback?
Fine, it’s promising and I think the selling point is actually the flexible payment. People love access to credit facility so it’s easier for them and that has been selling the brand, compared to a situation where you will be conditioned to pay upfront. If we insist on cash before service, we might not have gotten to where we are now but the idea of having to pay afterwards has really helped us to promote the brand.
It’s not for everybody so what we try to do to limit the risk is to engage the corporate organizations directly so we write to them, then once the staff make their own orders, they send their orders to us. Immediately we complete the transaction, we advance the HR so that the debit is scaled in. so, it’s been seamless, there’s a structure on ground, we have staff that monitor that all the time.
What are the challenges you have faced so far?
One major challenge we have encountered is a situation whereby a staff resigned while still in debt and the company where he or she worked now repaid the facility. The employer paid because the customer still had some outstanding remuneration that they were supposed to give him, so they debited from that. But thank God that we noticed on time and we were able to alert them for them to debit from his remuneration.
However, it’s a learning point for us because we have some organisations where those owing us will not even have remuneration at the end of the day, so how do we get our money. What we have done in this regard is to tidy that end. To this end, we have informed the employers on our platform that before they lay off any staff, they should find out from us if they don’t have any obligation.
The other challenge that we have is logistics. Sometimes we have a number of orders that the logistics and facilities that we have cannot accommodate. A follow up to this is the traffic logjam in Lagos metropolis, which often affects our delivery system. For instance, if dispatchers have four clients to cover in a day but due to traffic they are able to cover three, we have to start calling the customers and apologising to them for rescheduling. Sometimes, we even use Uber and that comes at the loss. You have charged the customer for N2, 000 and because there is such, they cut costs to six thousand naira and you can’t go back to the customer to say there’s a difference. We have to bear the loss.
What advice can you give to startups operating in Nigeria, despite the peculiar challenges of doing business in the market?
One, any potential entrepreneur in this market must be steadfast. It is important to constantly review strategies and involve in market research. In our small company for instance, we involve in frequent strategy session to learn from our mistakes, learn from the failure and try to improve better.