Food and Drink E-Commerce in Nigeria

2020 IMPACT

Lockdown restrictions and supply-chain disruption encouraged consumers to stock up on food and drink online

2020 saw a surge in demand for food and drink e-commerce from local consumers, albeit from a very low base. Restrictions on movement made it more difficult for consumers to visit modern grocery retail outlets, of which there are still relatively few in Nigeria, prompting more of them to turn to e-commerce.

COVID-19 prompts grocery retailers to rush online

The pandemic led a growing number of grocery retail chains, most notably Spar, to launch their own websites and offer consumers online ordering for the first time. Spar offers same-day delivery for orders placed before noon.

Young professionals and working women drive growth, but demand largely remains limited to affluent consumers

Food and drink e-commerce tends to be particularly popular with young professionals and working families. Many white-collar workers in urban areas struggle to find the time to shop for groceries, while the number of women in the workforce grew steadily over the course of the review period.

RECOVERY AND OPPORTUNITIES

Demand growth will be robust,

Retail current value sales of food and drink e-commerce will continue to expand rapidly during both 2021 and the forecast period as a whole, albeit at a lower rate than in 2020. While the bulk buying that characterised the early months of the pandemic is very unlikely to be repeated, the pandemic has helped to make consumers more comfortable with idea of shopping for food and drink online.

Jumia Technologies AG appears well placed to dominate

It remains to be seen whether grocery retail chains like Spar will persist with e-commerce now that lockdown measures have been eased and the threat posed by the pandemic appears to be diminishing. This could leave the way open for Jumia Technologies AG to dominate food and drink e-commerce: Its online marketplace is utilised by a significant number of popular FMCG brands in Nigeria.

Food and drink e-commerce will remain a niche

Food and drink e-commerce will remain marginal, with demand likely to largely remain confined to affluent households. Most consumers will continue to buy food and drinks from traditional grocery retailers and, to a lesser extent, modern outlets.