SMEs Should Embrace $13bn E-commerce Market –VConnect boss

The General Manager/Co-Founder, VConnect, Mr. Deepankar Rustagi, in this interview with Okechukwu Nnodim, highlights the need for Nigerian SMEs to embrace technology to increase productivity and boost economic growth
What are some of the challenges SMEs are facing?
Small scale businesses hold the key to the survival and growth of any economy. Nigeria, being a large economy, must begin to see small and medium scale enterprises through the same prism by ensuring that necessary investments are channelled towards that direction. Key constraints of the SMEs in this market include lack of awareness or knowledge about the different schemes and tools available in the market for their financial and marketing needs and the lack of know-how to promote their businesses to reach a wider audience at the right price. There are other problems such as poor power supply and lack of access to funding, among others.
How can these challenges be addressed?
Internet technology has greatly changed the way business is conducted all over the world. In terms of marketing and promotion which is critical to the growth of any business, SMEs in Nigeria must embrace technology. There is a dire need for businesses especially SMEs, to leverage e-commerce solutions to grow and improve their productivities. Technology allows SMEs to increase their productivities and have access to markets which they wouldn’t have had without putting their business on the Internet. Research shows that most SME owners lack the technological know-how of leveraging Internet solutions to boost their productivities. What VConnect has done is to create a marketplace platform to empower local businesses by unleashing their online marketing potential. The platform was designed to enable SMEs gain more visibility and sell to a wider range of audience. We are also organising seminars and workshops tagged ‘Empower’ where we gather business owners and tutor them on the benefits of getting their business online and also provide them with the tools needed to succeed. Nigerian business environment must tap into the wealth of opportunities the Internet offers. In a few years’ time, the contribution of SMEs to the Gross Domestic Product will reach new heights.
Do you think your workshops and seminar will make any meaningful impact on SME growth in the country?
SMEs need to step up efforts to integrate Information Communications Technology into their business models by leveraging e-commerce and e-marketing solutions to stimulate growth. Local businesses are our major stakeholders. To grow these businesses in line with the VConnect vision, we need to empower them with the correct tools. The VConnect ‘Empower’ initiative focuses on creating an interactive environment for us to communicate with young businesses together and provide them with beneficial information.
Our strategy is not only for sales of products but also for the companies or manufacturers to be known for further networking. We designed this platform not only for digital marketing purposes, but also for physical market interaction as this is where the future lies. Through our multi-pronged strategy, we hope to proliferate ICT adoption and meaningfully enhance the operations of our local SMEs.
Recent statistics show that Internet penetration in Nigeria is estimated to be over 40 per cent and fast growing while number of mobile connections has surpassed 140 million. What does this mean for the e-commerce industry?
Nigeria is the biggest Internet market in Africa. The potential for growth is quite high. The more people have access to the Internet, the more opportunities for growth in e-commerce activities. As more people have access to the Internet, more people will be able to shop online. I believe that mobile penetration is the key to the growth of e-commerce.
Also, the explosion in social media is offering new opportunities for small businesses to market themselves and build richer relationships with customers.
Accordingly, customers who are used to the sleek, ICT-based customer-engagement tools of big businesses — be it online banking, booking for travels on the web, or purchasing clothes, books or other categories of products and services online — will soon come to expect the same from the SMEs they deal with and this will be channelled through social media.
Why has your company expanded to e-commerce services?
This expansion is a result of our understanding of the challenges faced by SMEs in Nigeria and the motivation to empower them by offering growth opportunities through the provision of innovative online marketplace solutions. We hope to encourage ICT adoption and meaningfully enhance the operations of local SMEs.
The vision and mission of VConnect is to connect buyers and suppliers, to make it convenient for buyers to find products and services in the market and make it convenient for businesses to sell their products and services online. We look at a situation where down the line, every business will be able to sell their products and services online conveniently and every consumer will be able to buy from a virtual market online.
Why is the Nigerian e-commerce market not attracting more investors?
Owing to its population, Nigeria has the largest Internet market in Africa dwarfing its closest contenders – Egypt, South Africa, Kenya and Morocco.
A few years ago, Nigeria embraced e-commerce. Many other developing African countries have embraced the digital revolution and are increasingly using the Internet to purchase goods and services in diverse markets. Nigeria’s e-commerce market has a potential worth of $13bn with about 300,000 online orders currently being made on a daily basis. The country’s increasing population and the growth of Internet and smartphone penetration have been a catalyst for the rapid evolution of the sector.
According to online researcher, e-marketer, while e-commerce across the rest of the world is growing at 16.8 per cent, Africa’s e-commerce space is growing at a rate of 25.8 per cent – making it the fastest growing in the world. Nigeria’s e-commerce market is developing rapidly, with an estimated growth rate of 25 per cent annually.
The vast opportunities in the Nigerian e-commerce industry have seen the emergence of several e-commerce players looking to make a remarkable mark in the industry and that is why VConnect.com also made an in-road into the sector to serve the consumers.
With an economy of over half a trillion dollars in GDP, Nigeria is the largest country in Africa in terms of consumer base. The growth of the GDP is also very good. We believe investors from abroad are looking at the fast growth rate of the Nigerian economy and the potential Nigeria would offer by 2020.
What informed your company’s recent rebranding initiative?
We are a young company. The rebranding initiative is in line with our vision to continuously innovate, improve and grow. The re-branding exercise was also driven by the shift in the value offerings of the company from information wherever and whenever to find, buy and sell. We have re-branded to give a new feel to the brand, from a red and green colour to orange colour. It is a simplified logo.

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