Establishing Trust In The Era Of Nigerian Online Vendors
Old Problem, New Face
The recent rise in popularity of online vendors in Nigeria, most notably on Twitter and Instagram has been great as it reflects that more Nigerians are getting interested and beginning to get comfortable with online transactions. However, it has further brought to limelight an aged issue which predates online transactions and affects both online and offline modes of transactions in the country — vendor distrust.
With traditional offline transactions, vendors have mostly been distrusted for the quality of products as well as authenticity for brand-specific goods. It also goes beyond just goods and includes service delivery. So, people don’t trust that a tailor would deliver the aso ebi as promised just as much as they don’t trust that the authenticity of the Adidas sneakers they’re buying.
As expected, consumers over time developed mechanisms to ensure that they get their goods and services on time and as agreed (quality-wise) with the sellers/service providers. For services, a widely adopted practice is 50–50 payment where half of the amount is paid before the agreed service is provided and the other half upon delivery. With goods, buyers have had to develop detective-like skills to be able to separate the authentic from knock-offs.
While they offer convenience for buyers, online transactions in Nigeria have magnified and to a considerable extent, further justified the level of vendor distrust. Terrible customer service (which admittedly is not restricted to just online transactions), delays in delivery, false advertising, scams and more have made people even more cautious towards transacting with vendors online. One can even argue that to a considerable extent, the (stories of) unreliability of merchants have slowed down the adoption levels of online transactions in the country.
Small-scale vendors who transact online have not been the only ones who have felt the effects of this distrust. E-commerce behemoths such as Jumia and Konga have adopted unsustainable methods like pay-on-delivery in a bid to increase trust and comfortability with (potential) buyers.
Terrible tales include vendors vanishing before delivering goods/services (if payment was made prior), lower product quality (than specified online), delayed delivery, lack of (or difficulty accessing) refund measures and much more flood social media. These reviews, combined with the already existing distrust for traditional offline vendors have most likely contributed to a slower adoption rate of online transactions.
Compelling Trust: The Future Of Online Transactions
The ultimate truth is, despite all the negatives associated with online transactions in Nigeria, online transactions are not going away anytime soon. Payment gateways are seeing record-high transaction volumes, almost everyone you know and their grand-aunt is selling something on Facebook or Instagram and that is all great. However, to move to the next phase, something fundamental has to change; the level of trust must be higher than it currently is.
One of the ways to do that is to create AND efficiently distribute an escrow-like system which compels both buyers and sellers/service providers to stick to the agreed terms (fun fact: mid-way into writing this, I thought about titling it “Making A Case For Escrow In Nigeria” but found it to be a bit too limiting). Essentially, this should be a solution which lets users pay in BUT make it impossible for the vendor to access the payment unless vendors deliver as agreed upon (quality, timing etc.). This will not only encourage trust but in a way, compel it.
A lot of attempts have been made but none has exactly hit a considerable level of brand stickiness or is the first option that comes to mind when carrying out transactions with an online vendor.
Any solution that intends on fully solving this level of distrust has to be one with excellent customer service (this cannot be overemphasized), carefulness to each disputed transaction (this can be human resource intensive), ease of use, and fair pricing (not too high to scare away users but not too low to render it unsustainable).
Shill Time
Prior to us launching Planit (a platform that lets you find and hire event vendors), one of the main things that Ugochukwu (who currently handles design and development) and I talked about was how to ensure that vendors on the platform were trusted enough by potential clients to be hired. This brought out the classified vs marketplace talk a lot. Ultimately, we decided to go with a solution that includes both the simplicity of a classifieds service AND the security of a payment-protected marketplace all while having in mind the long transaction circles involved in the events space.
While we currently have ~6,000 vendors, we are still early (less than a year) and this is still in the works.
We recently had to tackle one of the cases that an escrow(like) solution would’ve most likely prevented in the first place as the vendor wouldn’t have gotten the payment released to them unless they delivered the service.
Who Should Do It?
Personally, I feel that a payment service provider would be in the best capacity to implement this as they have access to the infrastructure and in the long run, would help them get more users, HOWEVER, given the human resource-intensive nature of creating and maintaining a service like this at scale, I doubt they would consider (or go through with executing) it.
The current solutions that are available probably need to find specific niches to focus on (e.g. goods, services, P2P crypto trading etc.) as well as double down on execution given that none has exactly made an impressionable impact yet.
Plug time: A friend of mine, Stephen has been working on an escrow solution for a while and it should be ready for alpha testing soon. Sign up for updates here.
The Stories Of Tobi and Chizoba.
Tobi has been ‘eyeing’ the Samsung Galaxy S9 for a while but can’t afford to buy a new one and has settled to get a used one. He logs in to OLX, checks, finds the phone he needs and calls up the seller to meet up because it would be a cold day in hell before he makes any payment for a phone he hasn’t seen yet. He spends the better part of the next day meeting with the seller, checking out the phone thoroughly before agreeing to pay a dime.
Chizoba saw some shoes she liked on Facebook and since the price was decent, she decides to take a leap of faith and pay before delivery. Two weeks after the initially agreed upon delivery date and several calls later, the shoes are delivered. However, they do not fit (as they are not the size she requested for) and the colour is different. She attempts to contact the vendor but the vendor replies with a generic “No Refunds” message and blocks Chizoba. She vows to never deal with any online vendor.
You, a Nigerian reading this probably relates to one of these stories if you’ve transacted with vendors online.
It doesn’t have to continue this way.
