Nigeria is one of the most open services markets in Africa, receiving an overall rated score of 27.1 on the Services Trade Restrictions Index (STRI) published by the World Bank. Due to a growing base of Nigerian consumers, wholesale and retail sales (trade services) has become the second largest sectoral contributor to Nigeria’s GDP, 16.4% in 2018 with an estimated market size of US$109 billion.
With such huge market size, Nigeria one of the most attractive investment market for retailers in Africa, largely attributed to a growing middle class. A wide range of foreign investors, including South Africa’s retail giants - Shoprite and Pick n Pay, the Dutch retailer SPAR, and many more operate in Nigeria. These foreign investments are complemented by a host of domestic private investors who are building a chain of retail stores all across the country.
According to the Nigeria Investment Promotion Commission (NIPC), the e-commerce retail segment is growing at about 110% per annum and worth over US$12 billion. The prospects of the market segment are particularly strong with over 50% of the population being internet-savvy. Nigeria has the largest online market for apparel and footwear in Africa; it is expected to grow from US$104 million in 2014 to $1billion in 2019. Homegrown online retailing outlets like Jumia and Konga are leading the growth of this market segment. These domestic companies allow for cash-on-delivery payment, which caters to the still largely cash-based consumer base in Nigeria.