Economic downturn Hits E-commerce Sites, Losses Site Traffic

 BUSINESS & ECONOMY  0
E-commerce firms operating in Nigeria are
getting hit by the economic downturn facing
the country as the number of site visits drop
to an all time low.
While visits to e-commerce sites have
dropped, the bounce rates have increased
which is itself a negative outcome.
Bounce rate is the percentage of single-
page sessions where a user left a site from
the home page without interacting with the
page.
The implication of this is that while visitors
continue to drop, even those who visit the e-
commerce websites are barely interacting
with these websites, further limiting their
chances to make sales.
“The declining visits to e-commerce sites is
happening because Nigerians are poorer
now. High exchange rate, and the bad
economy has contributed to it and sales
have dropped as low as 50 percent,” says
Uzo Mbonu, Managing Director of GSM
Planet who has been selling through e-
commerce companies such as Jumia and
Konga for three years.
Africa’s largest economy contracted in the
first quarter of 2016, the first time since
2004.
The World Bank this week downgraded
Nigeria’s growth forecasts for this year to a
mere 0.8 percent from earlier estimates of
4.6 percent.
Nigeria’s e-commerce market records
transactions volume of about 300,000 online
orders a day, and $2 million dollars of weekly
revenue which translates to $104 million
annually.
A review of data on website visits has shown
that Konga’s total visits dropped to 2.5
million in May 2016, from 7.2 million in
December 2015.Similarly, visits to Jumia
Nigeria have dropped to 6.9 million from 13.4
million in December 2015.
In addition, Jumia’s global rank as estimated
by Alexa has dropped 168 places to 1,110,
with a bounce rate of 29.40 percent which
has worsened by 25 percent in the past
three months.
Yudala has witnessed a drop in traffic from
390,000 in December 2015, to 160, 000 in
May 2016, and Dealdey dropped to 371, 000
from 470, 000 in December 2015.
For Dealdey, its global rank has dropped 662
places to 7,282 while its bounce rate of 25.5
percent has worsened 18 percent in the past
three months.
Kaymu has appeared to be an exception to
the trend, with visits moving upwards from
440, 000 in December 2015, to 1.65 million
by May 2016, however, its bounce rate
increased by 44.4 percent, meaning more
people left the website without executing
transactions.
“It is a general problem. Even shop owners
are feeling it too as the country is in
hardship. Individuals are finding it so
difficult these days so I’d say it is an
economic problem,” said Gloria Iheanacho,
CEO of Gloria Ventures, a dealer in office
equipment and home appliances on Jumia
and Konga.
Apart from the general economic malaise,
another factor that may be contributing to
the reduction in visits to e-commerce sites
is the declining internet subscriber base.
Data from the Nigerian communications
communication has shown a steady decline
in the total number of Internet subscribers to
the four GSM networks in the country.
Subscriptions have dropped to 91,192,371 in
April 2016, from 97,824,017 recorded in
November 2015.
The data for the downward trends of the E-
commerce sites was mined from Alexa and
SimilarWeb.
Alexa is a global pioneer in the world of
analytical insight that has developed robust
and accurate web analytics. According to
the company, its traffic estimates are based
on data from our global traffic panel, which
is a sample of millions of Internet users
using one of over 25,000 different browser
extensions.
SimilarWeb on its part, uses data extracted
from four main sources: 1, A panel of web
surfers made of millions of anonymous users
equipped with a portfolio of apps, browser
plugins, desktop extensions and software; 2,
Global and Local ISPs; 3, Web traffic directly
measured from a learning set of selected
websites and intended for specialized
estimation algorithms; and 4, A colony of
web crawlers that scan the entire Web.
It uses big data technologies to collect,
measure, analyze and provide user
engagement statistics for websites and
mobile apps.
“Restrictions in access to forex is hurting e-
commerce as there is now a limit to
purchasing power. As a result, sellers are
finding it difficult to restock their inventory
as much as they want to, ” said Franklin
Adekunle an I.T. practitioner in Lagos