Digital retail platforms are becoming an increasingly important opportunity for young people to engage in entrepreneurship and formalized income streams.
In the global north, retail platforms like Depop and Vinted are particularly attractive to young people selling second-hand clothing. Comparable platforms in sub-Saharan Africa, like Jumia and Jiji.ng, are also thriving, moving informal employment in the clothing sector into the formal economy.
Jumia has been nicknamed the “Amazon of Africa” because of its domination of the African market. The accelerated market expansion of these new platform retailers has a culture of supporting a community of connected sellers. According to Drapers, the UK retail association magazine since 1887, these companies are the ‘Ebay for the Snapchat generation’. While some companies are achieving unicorn status (a start-up valued at over $1 billion) the trajectories of some companies can be very unstable.
To examine this emerging market, we sought to understand if young people in Nigeria used these platforms to earn money by selling second hand clothes. Surprisingly, we found there was a preference to use social media channels instead.
Alternatives to retail platforms
Based on 15 interviews with young female entrepreneurs in Nigeria we found that while they were comfortable buying electronics, books and other products from international retail platforms, they were unlikely to use these to sell their own products. Instead, social media platforms like Twitter, Facebook, Instagram and WhatsApp were considered a simpler medium and “fool-proof” way of getting their message across.
The immediacy of being able to update social media was seen as an advantage over retail platforms like Jumia. Entrepreneurs simply updated their WhatsApp status with pictures of their products to get attention from their customers. Family and friends notice the change in the picture and ask them about it.
“….Even I won’t buy clothes on Jumia, especially Okrika [secondhand clothes]….The way I advertise my goods is mainly through my WhatsApp status and Instagram. I don’t have a personal Instagram account anymore; I use it for my business now” Sola (22years old)
Another attraction of social media platforms was that they are free of cost. Considering that second-hand clothing are cheap and inexpensive products, retail platforms’ charges discourage these entrepreneurs from engaging on them, Jumia sometimes charges sellers up to 15 percent on each sale.
That’s where the customers are
A huge reason for social media use is, as Gbemi, a 25year old graduate said, “almost everyone is using these social media”; word of mouth through these social media platforms was enough to get their businesses rolling.
“People can be looking through their social media in their free time and see your post and like what you’re selling, nobody is just strolling through Jumia unless you already have an idea what you want to buy” Gbemi (25 years old)
Another driving force for alternative channels being more utilized than digital retail platforms is that it’s personal, familiar, visual and easy to use. Social media and WhatsApp and are easier to understand and navigate because it is seen as a familiar technology, even for those not tech savvy.
Trusting your sellers
The biggest advantage is that there is a personal element involved when customers buy from these sites. People are more confident when transacting directly with the seller on their personal number or page. When they can put a face to who they are communicating with, that automatically boosts their trust level. This makes ordering and buying from these sellers smoother when compared to digital platforms as one interviewee noted:
“We are not a trusting people in Nigeria, we like to see what we’re buying and who we’re dealing with, so the personal aspect of this business is very important to boost trust. When customers know your number, your face, they trust your product and I got my repeat customers that way”
These findings also point to areas in which traditional online retail platforms can improve their offering to attract more young entrepreneurs. Fees and charges associated with having a seller account are perceived to be high, and this impacts on the profitability of young entrepreneurs, and discourages young people from using these platforms, preferring instead to use more trusted spaces on social media.
Online retail platforms might also be developed with social media- like interface for some of their platforms to encourage sellers who deal in visual products like clothing and channels, where sellers and buyers can develop some level of personal trust.