Online transaction continues to grow in Nigeria, in spite of the challenge of broadband infrastructure. e-commerce platforms are creating jobs and boosting the GDP. The Chief Executive Officer, Hotel.ng, Mr. Mark Essien, says online businesses have potential to grow the economy, if the government democratises internet access by making it free and building infrastructure. Lucas Ajanaku met him.
Commerce is an emerging business space, and online hospitality business is another variant of e-commerce. What is the future of this business considering the fact that online booking for phones, bags and other tangible goods has recorded huge success?
E-commerce is an emerging business in Nigeria, but even at that, it is making tremendous growth, because the people are fast embracing new technology.
But on the otter hand, online travel business, which constitutes about 3.6 per cent of the country’s Gross Domestic Product (GDP), is highly underrated in the country, but the hospitality business in Nigeria is worth $3 billion every year, and if an entrepreneur could capture 10 per cent of the market, then such entrepreneur still has a $300 million business per year, and that is huge money and good business, irrespective of the location of the business.
The Nigerian GDP is growing and what this means is that any business that contributes up to 3.6 per cent to GDP now, would in the next few years, triple the amount.
So the online businesses and e-commerce, most especially have potential to develop fast into money spinning business, if properly harnessed.
There are lots of risks associated with online transactions, ranging from identity theft to data hacking. How secured is your platform for customers to transact business without losing money?
For us at hotel.com, our platform is safe and secured for online business. In the second half of last year only, we did over a million dollar financial transactions and since then, we have been doing online transactions through our website, with no bitter experience on the part of customers. For instance we subscribe to a solution from the Economic and Financial Crimes Commission (EFCC), called ScumL. This is designed specifically for hospitality business and few other types of businesses. The solution helps to detect and control online fraud. Aside that, we are very proactive in handling issues with online challenges and this has helped us to maintain a large number of customer base.
Apart from the EFCC solution that you subscribe to, who are your technical partners, and how have they been able to address online fraud on your website?
Yes we have technical partners handling our backend operations, and we still have a mixed team of developers who are busy developing solutions that will address online theft on our site. We have some of them in Nigeria while others are based outside the country, working for the common good of the pla
For our payment platform, we are partnering Zenith Bank, and Stanbic IBTC Bank. We are also partnering Quick Teller solution, which allows for easy online payment.
Again, all our data are encrypted, and this has also helped in protecting the customers from online fraud.
There is panic fear on the part of Nigerians in transacting business via the cyberspace. What is your assessment of the situation now?
Nigerians who have some sort of phobia doing business online for fear of being hacked, should not be blamed for any reason, rather, they should be encouraged to ‘toe the line’ of modern technology, because nothing comes without its own risk. Some people may also not want to do online business for fear of un-reliability. For instance, there are cases where people make online purchases of some household items and the delivery is delayed unnecessarily, and in most cases, the items are lost in transit or even got damaged on arrival. Such scenarios are enough reason for anybody to have some reservations about online transactions, but we should not allow the disadvantage suffered in a particular transaction, rub off the legitimate gains of other online transactions. The best way to overcome these challenges is to continue to invest in the business. When you invest money to address any challenge encountered in previous transactions, the business will become very reliable and resilient both for the customer and the business owner.
Your platform is innovative and appears relatively unknown. It has prospects for growth and more players joining the fray. How prepared are you for competition in the future?
Competition in any business is a welcome development and I will like to experience competition in my business because it will help me to do better and offer better quality service. Monopolistic businesses do not give room for innovation and thinking out of the box. In this connection, I sincerely welcome competition. That will put me on my toes to be innovative always. This will in the best interest of customers and the Nigerian economy.
If the quality of my services is poor, or my service charge is too high, people will look for the alternatives. If there is competition, that alone will make me more customer friendly in order to retain and grow my customer base. If more people are in the business, they will set a benchmark that everyone will like to surpass as business owners. This will result in a win-win situation for all as it will rapidly drive economic development.
Access to funds is very important to start and grow businesses. In Nigeria, when funds are got from deposit money banks, it is usually at double digit interest rate. What is your experience like?
Generally, in raising capital for any business, the business owner must first build a business model that is economically viable and sustainable. When this is achieved, investors will like to invest in such business. Investors are not father Christmas. They are interested in investing in business that is not viable, because they want returns on investments. No sane investor will allow his funds to be tied down somewhere.
For the business, we have succeeded in securing a $1.2 million facility for the business. We were able to get the facility from two foreign investors, because they believed in our business.
You are lucky to have secure a loan of $1.2 million to expand your business. Into which areas do you intend to deploy this fund?
Our plan is to move from being a Nigeria-based power house, to a global-based power house. The money will be used to expand the business and make it have a global look. Our one-year goal is to grow the business across the West African sub-region, and our five-year goal is to grow the business across the rest of sub-Saharan Africa.
What should the government do to boost e-commerce and other forms of online business?
One of the roles of the government is to provide the necessary infrastructure for businesses to thrive. There are several policies that the government can explore to drive sustainable businesses in the county, but one policy, which I think is key to the growth of online business in Nigeria, is for government to make 2G and EDGE internet access free for all Nigerians. The 3G and 4G/LTE technology could still be paid for, but 2G and EDGE internet should be made free. By the time government mandates all mobile network operators (MNOs) to make 2G and EDGE internet free, it will enable every Nigerian have internet access. Though the speed is slow when compared with 3G and 4G speed, it will promote access and deepen penetration. When this is done, service providers will uptimise their websites to adjust to the speed of 2G and EDGE and this will further deepen internet penetration in the country.
Making 2G and EDGE internet access free, will create equal opportunities for Nigerians to seek information online without restriction, irrespective of their social and economic positions.
You are suggesting that 2G and EDGE technology should be offered freely in the country. Where in the world has the government made 2G and EDGE internet access free?
In Germany, EDGE technology is not free, but they do not have metered-bandwidth connections, where they pay for data usage like in Nigeria. The truth is that economies vary and environmental situations also vary. In Germany and in most developed countries, they have unlimited access to the internet and they have social security policy in place where people who are not working, are paid monthly salaries for their upkeep. Those who work are well paid, so in such jurisdictions, the governments do not need to make 2G and EDGE technology free of charge, but in Nigeria, where there is no social security policy in place and where monthly salaries are very poor for those who work, there should be ways of ameliorating the sufferings of the people. It is, therefore, my candid opinion that making 2G and EDGE technology free for every Nigerian will have multiplier effects on the economy.
The rebasement of the nation’s GDP shot it to the highest in Africa. Is this position sustainable? What roles, if any can e-commerce play in ths are?
Given the business situation in Nigeria, it is clear that there are lots of potentials for growth and this will also show in the growth of the country’s GDP. The population of Nigeria is an advantage for growth and I see Nigeria maintaining the leadership position, especially with the rapid growth of e-commerce in the country.
You manage a web portal for online hospitality business, known as www.hotel.ng, which is serving the interest of travelers within the country. How did you come about this idea?
It was during my Masters in Computer Science programme in Germany in 2012 that I conceived the idea about hotels and online booking. Then, I discovered that in Germany, only few websites have information about hotels, so I started by listing hotels in Germany on my website and what marveled me was the amount of traffic generated on my site. People were visiting my site to get information about hotels in Germany. After my Masters’programme, I searched for Nigerian hotels online and I discovered there was no website offering online booking services for hotel accommodation and I felt it was a good business to embark upon, having started with the listing of hotels in Germany. After my programme, I decided to return to Nigeria to begin the business. The first thing I did was to buy the Nigerian domain name for the business, known as hotel.ng, which is a second level domain name and today, the business of hotel online booking has grown tremendously.
I started by listing Nigerian hotels on my .ng website and within few months, a lot of people searching for hotels in Nigeria, were directed to my site and that was how the site started generating a lot of traffic. I had photographs of hotels and their addresses posted on my website, and the very first day I uploaded my mobile telephone number on the site, I received over 100 calls from people. Some were calling to do business with me, while others were calling to get more information on the hotels on my website.
What segment of the e-commerce market are you targeting with your platform?
Hotel.ng is a web portal that enables Nigerians, especially travellers, to find hotels of their choice, when they visit the site, www.hotel.ng
Before now, travellers in Nigeria who out of necessity, want to lodge in a hotel, find it difficult to know locations and quality of hotels in a particular city. We took advantage of the situation and hired people to catalog hotels in major cities of the country and we uploaded them on our website, including their pictures. So, the online platform makes it possible for people to have idea of different hotels in Nigeria, their service charges, their facilities, to guide them in choosing which to book online.
