Profit-making idea: Food e-commerce in Lagos

How we made it in Africa asked Niyi Kolade, founder of Lagos-based payments processing company Seerbit, to identify an untapped business opportunity in Nigeria. Here is his response:

“The Covid-19 pandemic accelerated digitalisation for many businesses, including restaurants and food outlets as they sought ways to serve their customers despite little or no on-premise transactions. A lot of food businesses developed systems to make orders available online and deliver food to customers’ doorsteps.

“This has led to a rise in food e-commerce, distinct from regular e-commerce. The big difference is that timelines are tighter with food e-commerce as customers expect their orders delivered within a short time frame. While there are already food delivery services in Lagos, customers often complain about inefficiencies like late and unreliable deliveries.

“Although players like Jumia Food and Gokada’s GShop are already taking on the challenge, there is a massive opportunity to serve Lagos’ huge and growing population of young people, particularly the tech-savvy working class who seek efficient and affordable options for meals.

“This opportunity to develop food e-commerce, specifically and separate from e-commerce as a whole, also exists in other urban centres beyond Lagos.

“By extension, online grocery shopping is another area that is growing and seeing increased adoption, particularly with the high rate of food inflation in Nigeria and consumers’ growing need for competitively-priced groceries that they can get without hassle.

“People must eat, and as more people seek the most convenient and cheapest ways to get their meals through the internet, opportunities continue to open for food e-commerce across its value chain.”