5 lessons on Nigeria’s ecommerce space from HouseholdMax

Last Friday, I attended the official launch of HouseholdMax Online, Nigeria’s premier domestic item ecommerce site.

It was an entirely new experience for me to see a Nigerian homegrown ecommerce company launching big. It made me realise there are some serious lessons for startups and ecommerce stakeholders in the country and by extension, other parts of Africa.

For those who don’t know, HouseholdMax is not a conventional African ecommerce startup. It doesn’t complain about having no money to spend, few investors and the usual rhetoric.

Instead, it is owned by Aisha Tinubu who is the wife of Trojan Estates boss Kunle Tinubu and in-law to Wale Tinubu, the CEO of one of Africa’s leading integrated energy groups Oando Plc.

Below are five lessons on local ecommerce I picked up from Nigeria’s HouseholdMax:

1. Startup doesn’t always mean ‘start-small’

Discussions around startups in the African ecosystem are often built around images of young developers who have great ideas but cannot afford to finance their deployment.

While this might be true for the majority, there are also some startups that have access to funds but don’t have an enabling framework to guide its usage. For the fear of being taken advantage of, they keep their heads down and take fewer risks.

HouseholdMax started big from the get-go. This should become an inspiration for other big players to enter the industry.

2. Niche ecommerce can make it big

I did not have a full grasp of what is unique about HouseholdMax until I got to the event. I was trying to figure out how they would compete with the likes of Jumia and Konga — the two mega ecommerce platforms in Nigeria.

That was until I realised the platform is only interested in selling household goods. This enables HouseholdMax to focus and corner a very specific market.

Read more: Does South Africa’s ecommerce future really lie with niche players?

The temptation to sell everything is understandably strong but the ease of controlling an entire market that is dominated by two giants with multimillion dollar investments should cause any uprightly thinking tech entrepreneur to focus on a niche instead.

3. Nigerian online shoppers want faster delivery

I walked into the hall when some young actors were performing a skit. Two guys decided to order online — one on HouseholdMax, and the other from one of the regular platforms.

As expected, the delivery man from HouseholdMax brought the order the same day while the other guy kept having problems in reaching his preferred ecommerce site.

Ecommerce is expected to be simpler than the conventional way of shopping. Yet, delivery usually takes five days or more. To overcome this challenge, HouseholdMax plans to keep its same-day delivery promise by using bike riders.

4. Online shoppers like customised experiences

Earlier this month, Ventureburn reported that the demand for more personalisation features spurred the co-founders of SureGifts to launch a new website.

Similar issues were raised by Aisha Tinubu while explaining the development of HouseholdMax:

“We also have teams dedicated to managing peculiar requests or special instructions attached to all customers’ orders. These personalised ancillary services that we offer clearly sets us apart from competition.”

Read more: SureGifts is Nigeria’s premier gift card startup targeting the corporate world

It is obvious that ecommerce in Nigeria is gradually going beyond merely ordering goods online. Instead, shoppers prefer platforms that can offer them personalisation features which are not available on sites like Jumia or Konga.

5. Cash-on-delivery payment is a necessary evil

Over the last couple of weeks, there has been strong condemnation of the cash-on-delivery (COD) payment option, which is the preferred payment of choice for more than 70% of Nigeria’s online shoppers.

Tinubu explained that COD could be bad for certain products such as perishable or expensive, consumer electronic goods as some people can change their minds and opt out of the purchase. For the seller, this is expensive.

Read more: Pargo’s pick up points hope to innovate South Africa’s growing ecommerce

A report by Ernst & Young found that the return rates in online shopping in COD transactions averages around 40%.

But the fact remains that ecommerce wouldn’t have grown to its current state in Nigeria without the introduction of COD.