As the year draws to a close, many people are looking forward to Black Friday deals. Close to a festive period when the costs of many shopping items are usually inflated, Black Friday offers an alternative for customers to purchase items at more affordable prices.
Black Friday represents a time towards the end of the year when retailers make special offers which allow customers to shop a number of items at varying discount rates. In some cases, massive discounts of 90% or more may apply to certain products.
In Nigeria, notable e-commerce companies including Jumia and Konga have already commenced Black Friday sales to clear out items which may have been in warehouses for a prolonged time. Jumia is offering over a million Black Friday deals this year.
Over the years, Nigerians have made a culture of taking advantage of Black Friday deals to buy as many products as they can afford at discount prices before the deadline elapses. Last year, there were over 100 million visits to Jumia’s app and more than 3 million orders during Black Friday.
In 2016, Jumia generated N7 billion from about 295,000 total Black Friday sales. Konga, on the other hand, realised N3.5 billion from sales on 155,000 orders.
I have adduced some reasons below:
Lesser Sales Revenue due to Reduced Purchasing Power
As a result of COVID-19, many people have lost their jobs due to the inability of many businesses to continue their operations during the lockdown period. Others have had to take pay cuts to retain their jobs.
A report by the National Bureau of Statistics (NBS) in July revealed that about 42% of people out of 1,950 households surveyed had lost their jobs due to COVID-19-related reasons. 79% of these households suffered a reduction in their total income.
Coupled with this is the fact that 4 in 10 Nigerians still live below the country’s poverty index of N137,430 ($381.75) per year.
A number of people are only just securing another job or creating alternative sources of earning an income post-COVID-19. That said, it would be very unlikely that many of them even possess spare income to spend on Black Friday deals.
Although many people would still go on to buy items ranging from gadgets to clothing and groceries, it may be logically impossible for e-retailers like Jumia to replicate the number of sales as well as revenue generated from last year’s Black Friday.
Logistics Constraints May Cause Delayed Deliveries
Throughout the lockdown period in Nigeria, stay-at-home orders imposed across Lagos, FCT and Ogun state curtailed the operations of logistics companies though e-retailers could still keep running home deliveries.
Jumia is employing contactless delivery during this year’s Black Friday due to COVID-19-related health guidelines. This means that majority of the products purchased will be delivered via motorbikes.
In the present situation of things, traffic congestion has increased due to road blockages arising from the need for government repairs as well as the unrest in the aftermath of #EndSARS protests. For instance, the Third Mainland Bridge in Lagos remains under partial closure to date and some other road sections in the state were blocked to prevent takeover by thugs.
Traffic congestion has increased as a result and this means that delivery bikes will likely take a longer time before reaching the destination addresses on Black Friday orders. Owing to this, items may be delivered later than expected.
Another possibility is that the e-commerce companies could upwardly review door delivery charges to guarantee faster delivery time. This may scare off certain people who might have otherwise considered making Black Friday orders.
Higher Customs Fees on Items Shipped from Abroad
Despite Black Friday discount prices, total costs on items shipped from overseas could be less affordable due to higher international customs duties.
Following the crash in global oil prices during the early stages of COVID-19 outbreak, Nigerian Naira has depreciated against the dollar. One US dollar is currently equivalent to NGN380 which is higher compared to NGN360 as of December last year.
The increased exchange rate has increased the dollar-based custom levy on products shipped to Nigeria. Customs fees include Value Added Tax VAT, which has also been raised from a previous 5% to 7.5%.
What this means is that customers will have to pay more for these items after Black Friday discounts are subtracted.
Consequently, fewer orders may be made for products to be shipped from abroad due to the added cost on international customs fees.
The current state of security in the country could also affect Black Friday sales this year. A number of police officers and Federal Road Safety Corps (FRSC) officials have neglected their duty posts in the wake of #EndSARS agitations.
While some have returned, there is an air of volatility about certain areas in various states of the country. The concern is a question of how safe ordered items are in the hands of delivery bikers. Admittedly, this is more on the part of online marketplaces more than customers.
Thefts could easily occur especially when street urchins recognise the frequent movement of delivery bikes carrying products. Perhaps e-retailers such as Jumia and Konga will direct their delivery riders not to ply certain roads in order to reduce the chances of intimidation and extortion by miscreants.
In summary, companies will be seeking to amass as much revenue as possible from sales in this year’s Black Friday season, regardless of the impact of COVID-19 and #EndSARS.
Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!