Booming online sales add fizz to Coca-Cola’s Nigeria unit
US beverage giant sees sharp rise in online sales of its products
Coca-Cola’s Nigeria unit said it has seen a threefold increase in e-commerce sales this year after virus-induced lockdowns inspired a change in consumer habits in Africa’s most populous country.
The US beverage giant saw a sharp rise in online sales of its products after Nigeria joined the global trend of imposing movement restrictions on people to contain the spread of the virus, according to its CEO.
“The first one month of Covid-19 was the pivot point,” for e-commerce penetration in the company, CEO Alfred Olajide said at an interview in Lagos, Nigeria’s commercial hub. “We have more than tripled the e-commerce business that we have in our portfolio,” he said without sharing details as the company isn’t listed in Nigeria.
Nigeria is seen as a frontier for growth in e-commerce due to a largely youthful population with an average age of 18 and increased data penetration. The use of smartphones is poised to rise almost fourfold to 140-million by 2025, according to Statista.com, adding to the number of people going online to buy everything from groceries to garments.
The maker of Fanta and Sprite carbonated drinks and Eva water is partnering with online shopping firms including Jumia Technologies, a Berlin-based e-commerce platform that provides services in Lagos to push its products in the country, according to Olajide.
“Right now e-commerce orders as a proportion of sales is still in the single digit but the ambition for us is to scale it to double digit and make it a very big channel of choice for our consumers,” the CEO said without giving a timeline. “We are partnering to help the trend grow and you will see more of that coming through in our strategy.”
While high inflation rate and unemployment have eroded disposable income, the company is starting to see sales return in 2021 and probably match pre-Covid-19 period as the economy improves, Olajide said.
Coca-Cola has adjusted prices and has “smaller, more value based pack sizes to cater for consumers that have low disposable income”, the CEO said. That has helped sales recover this year after they took a knock in 2020, as the country experienced its worst economic contraction since at least 1991 due to measures to contain Covid-19.
The foreign exchange shortage hampering industries in Africa’s biggest crude producer has not impacted operations as it gets most of its inputs locally including plastics, crowns, label and sugar, Olajide said. Concentrates imports are not that huge to cause a disruption to the business, he said.
“What we do as an organisation is to look for ways to continue to be more efficient,” Olajide said. “There is a lot recovery happening in the business and I will peg it to the fact that the country itself is improving.”
Bloomberg News. More stories like this are available on bloomberg.com
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