In June 2017, I wrote and asked Amazon coming to Nigeria. I also made a video (below). The main premise is: Amazon has the ability to become the postal service system in Nigeria that will connect rural and urban Nigeria on a large scale. Yes, Nigeria needs Amazon to help support its infrastructural development, particularly in the areas of logistics and transportation.
Rumor has it that Amazon is coming to Nigeria. If that’s true, that’s a big deal. Amazon is more important to Nigeria than Google or Facebook. Why? Amazon has the ability to unite rural and urban Nigeria through catalytic infrastructure. Nigeria began to disappear on a large scale when the postal system collapsed.
Today, there are two generations in Nigeria: those who saw a functioning postal (and rail) system and those who came when everything was gone. If Amazon comes and invests billions of dollars – more than Nigeria’s national budget in logistics and transport, and opens it up to all farmers, shippers, etc. through its execution business model, that would be magical. (Of course, the vibes of neocolonialism will increase; I get it.)
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Read what I wrote in June 2017 when I was dreaming about the impact of Amazon coming to Nigeria not only to sell cloud services but also to run e-commerce operations.
Amazon is now a bank, lending to small businesses that sell on its platform. It is also an expert processing company in air, sea and road logistics. With its networks of empires, anyone can live in Amazon America, eat food from Whole Foods, watch movements from Amazon, read on Kindle, buy most things from Amazon. The list continues. Its impact permeates industrial sectors and all those it touches, securing it as Napoleon Bonaparte did when he conquered nations in the 18th century.
According to the Business Insider leak, Amazon will launch in April 2023. With that, Jumia and Konga will see more competition. This review differs from another here which focuses on Amazon Web Services.
- “The Belgian market, called Project Red Devil, is scheduled for the end of September 2022. The one in Colombia, called Project Salsa, is scheduled for February 2023.
- “South Africa, codenamed Project Fela, is also expected in February 2023. The market in Nigeria is expected to launch in April 2023. This project shares the codename Project Fela with South Africa,” a- he declared.
- “Chile is also scheduled for April 2023. It shares the Project Salsa name with Colombia,” the report adds.
All countries plan to launch with their own marketplace and access Amazon’s fulfillment service called Fulfillment by Amazon, according to one of the documents.
For Amazon, expanding into more countries now makes sense. The company needs to generate more demand as growth slows across the board after a two-year pandemic-induced sales boom. Amazon has cut hiring, sublet warehouse space and limited delivery network expansion this year in anticipation of a prolonged downturn. Onboarding more sellers in new countries can help Amazon fill more of its warehouses, which are facing excess capacity after overbuilding facilities during COVID-19 shutdowns.
If this comes to fruition, Amazon’s infrastructure can solve marginal cost issues for many sellers. I expect Amazon to have an immediate impact because many people can start selling online, plugging into the logistics apparatus that Amazon is expected to build. It is losing $5 billion in the Indian market, a fraction of which will go towards basic logistics infrastructure that will help Nigeria. You can call it Nigeria ecommerce 2.0.
Opportunity for the B2C sector
The reason e-commerce businesses, especially B2C ones, are struggling in Nigeria, is the huge marginal cost of distribution. If Amazon comes along and builds the basic operating system for logistics, and enables everyone to access it, Nigeria will begin the era of e-commerce 2.0. Sure, Amazon will “tax” Nigerian businesses, but when you compound the impact, good things will happen.
Of course, what does it do for a nation to pin its hopes on another conglomerate? Nigeria is waiting for the Dangote refinery to fix its currency by replacing the import of fuel. Now, Ndubuisi hopes Amazon will fix its e-commerce B2C marketplace by providing logistics.
Don’t blame me: it’s being pragmatic. The Nigerian B2C e-commerce market will not be profitable until we have a postal system; Amazon has a chance to build a quasi-version. However, this is a rumor since Amazon has not confirmed the leak!
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