The Financial Impact of E-commerce on Traditional Retail Businesses: A Case Study of Jumia Nigeria
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Background of the Study
E-commerce has revolutionized the global retail landscape, offering convenience and wider market access to consumers. In Nigeria, platforms like Jumia have gained prominence, reshaping consumer preferences and retail practices. While e-commerce creates opportunities for growth, it poses significant challenges to traditional retail businesses, including declining foot traffic, increased competition, and changing customer expectations (Obinna & Nwachukwu, 2023).
Traditional retail businesses, which rely on physical stores, often struggle to compete with the cost-efficiency and reach of e-commerce platforms. The rise of Jumia, as one of Africa’s largest e-commerce platforms, has intensified these challenges in Nigeria. Studies indicate that traditional retailers in urban areas like Lagos experience financial setbacks as consumers shift to online shopping for convenience and affordability (Eze & Okafor, 2024).
This study investigates the financial impact of e-commerce, using Jumia Nigeria as a focal point, to understand how traditional retailers can adapt and remain competitive in an evolving market.
Statement of the Problem
The rapid growth of e-commerce in Nigeria has adversely affected traditional retail businesses, leading to reduced sales and increased closures. Many traditional retailers are ill-equipped to compete with the technology-driven strategies of platforms like Jumia, which offer broader product ranges and competitive pricing (Adebayo & Adeola, 2023).
The problem is compounded by a lack of digital adoption among traditional retailers and limited awareness of strategies to integrate online and offline retail models. If these challenges persist, traditional retail businesses risk losing their relevance and profitability in Nigeria’s dynamic market.
Objectives of the Study
- To assess the financial impact of e-commerce on traditional retail businesses in Nigeria.
- To identify the challenges traditional retailers face due to the rise of e-commerce platforms like Jumia.
- To propose strategies for traditional retail businesses to adapt to the e-commerce-driven market environment.
Research Questions
- What is the financial impact of e-commerce on traditional retail businesses in Nigeria?
- What challenges do traditional retailers face due to the rise of e-commerce platforms like Jumia?
- What strategies can help traditional retailers adapt to the growing e-commerce market?
Research Hypotheses
- E-commerce significantly affects the financial performance of traditional retail businesses in Nigeria.
- The rise of e-commerce platforms like Jumia creates challenges for traditional retailers in Nigeria.
- Strategic adaptation can enhance the competitiveness of traditional retail businesses in Nigeria.
Scope and Limitations of the Study
This study focuses on the financial impact of e-commerce on traditional retail businesses in Nigeria, with Jumia as a case study, covering the period from 2023 to 2025. Limitations include difficulty in obtaining financial data from traditional retailers and potential biases in responses.
Definitions of Terms
- E-commerce: The buying and selling of goods or services through online platforms.
- Traditional Retail Businesses: Brick-and-mortar establishments that sell products directly to consumers in physical locations.
Market Adaptation: Adjustments businesses make to remain competitive in a changing market environment.
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