Greenfield opportunities in local commodities e-commerce
There is a story about a teacher who stood in front of a roomful of young people holding an empty glass jar. She turned it upside down and asked the young people in the room if it was empty or full. ‘Empty’ they chorused. So she picked up a couple of stones and poured it into the glass jar till it is filled up.
Then she asked them again, was it empty or full. ‘Full’ they answered. She then proceeded to pour sand into the jar filled with stones. The sand slid in easily between the spaces in between the larger stones till it filled up again. Is it full now? She asked them. They laugh. ‘Yes it is full now.’ She then proceeded to pour in water, the water filling in the space between the stones and the sand till it was full again.
The allegorical story above is representative of the nature of how opportunity magically appears in a seemingly saturated setting by introducing a different kind of product or technology that meets a need that hitherto existed but wasn’t obvious to the undiscerning.
Nigeria is a country of over a hundred and fifty million people and while the exact census numbers may be in doubt, what is not in doubt is the size of the marketplace that this population represents in sub-Saharan Africa. What is not in doubt is how this seemingly unstructured marketplace has thrown up immense opportunities for businesses that have managed to find their spaces within it and create a need or fill it.
A case in point is Mobile Telecommunication Network Holding Company, MTN, formerly second largest telco in South Africa whose foray into the Nigerian market has been nothing but profoundly profitable since the first cellphones rang barely two decades ago. These are millions of people shown possibilities of GSM communication and whose communication needs across the vast geography and diverse landscapes of Nigeria were met.
There are other businesses that have managed to capitalize on this strategy too in the last two decades of uninterrupted democracy in Nigeria that have simply cashed out by filling in the space between the stones or the sand and optimizing the need of a largely consumer-led market eager to give up their money to meet need and get value.
This brings us back to the question. Is the jar of internal production for local consumption and global exports full or empty? While you ponder on answering that question, cokodeal.com a Nigerian e-commerce marketplace platform is leading a bold charge into the future of intra- and intercontinental trade in Africa by a simple proposition, which is: connect the massive market for locally produced products in Nigeria to the majority of Nigerians whose consumer needs are still largely met by supply of import products; and furthermore open up this vast treasure trove to the global marketplace for international trade.
For the first time, buyers of commodities and locally made products can find sellers, and source locally all in one place on cokodeal.com. The Illiterate and semi-literate producers can get technical support for putting their products online and reaching millions of potential buyers – light years ahead of what they used to do piling their wares on lorries and carrying them across vast distances. Sellers too can now benefit from sourcing from a verified pool of buyers for which certain controls have been put in place to ensure heightened trust in the trade interaction.
In a country with a larger percentage of consumption fed by import products and local consumption still at a paltry ratio, it is undeniable why there are new investment in the local commodities recently; Olam international invested over $100million into Africa’s largest hatchery and feed mill in Kaduna state, Nigeria, Dangote Tomato processing plants in Kano state, Nigeria, WACOT 60,000 metric tonnes fertilizers plant and chemical in Edo state Nigeria. These local and international companies are investing hugely with a goal for monopoly or market dominance in different commodities in industries that have always existed.
Taking note that raw material and Agro related products is where Nigeria and many African countries have comparative advantage, in 2016 Africa CEO forum, Aliko Dangote stated that “African economies should rethink backward integration, the ability to connect manufacturing industries with local feedstock, from cotton growing to textile factories” as a key to Africa’s growth prospect, to make goods cheaper, easily accessible and in more supply.
According to the National Bureau of Statistics, intra-Africa trade is below 15%, it looks like a foolhardy thing to invest in local production and promotion, but for those who understand the nature of opportunities, they will know it is not. If there was any other time to prepare for tomorrow, it is today.
Internet penetration in Nigeria rises to 53%, with a total of 94 million users, in August 2017, according to NCC. Access to mobile internet has all but doubled in the last ten years with older demographics now getting more actively involved using messaging apps like WhatsApp. Put all these together and all of a sudden you started to see the empty spaces in a jar that you once thought full and the immense opportunities that organisations like cokodeal is capitalizing upon becomes the more apparent.
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