Covid19 lockdown: Boom for fintechs, e-commerce, telecoms

By AYOOLA OLOLUWA

Some companies have recorded tremendous growth in their turnover in the last two weeks despite the negative impact of the lockdown of the nation due to the outbreak of Covid19 in the country, BusinessHallmark findings have revealed.

It would be recalled that the Federal Government had on March 30, ordered the Federal Capital Territory (FCT) and Lagos to be shut down in a desperate move to contain the spread of Covid19 in the country.

Many states not included in the lockdown also shut down their borders and restricted movements to prevent the spread of the virus to their states.

The lockdown, checks revealed, had forced many business concerns to close down, in effect crippling their businesses.

Some of the businesses affected include hotels, educational institutions, transportation, betting, among many others.

However, unlike other businesses that are reeling from the impact of the restriction, business is booming for telecoms, fintech and e-commerce firms as most  Nigerians have been forced to embrace e-commerce platforms for survival.

Among the beneficiaries of the lockdown are mobile money vendors. Investigation revealed that though most banks are still opened, Nigerians, particularly the masses, could not access them owing to non-availability of public transport.

Virtually all commercial vehicles are off the road due to the clampdown. As at Friday, The Lagos State Police Command alone has seized close to 700 vehicles,  with commercial vehicles accounting for over 70% of the seizures.

Many Nigerians who could not trek to banks resorted to mobile money agents in their neighbourhoods. In the Ijaiye-Ojokoro area of Lagos, money agents were charging between N150 and N1,000, depending on the volume of withdrawals and deposits.

Our correspondent who collected N10,000 from a First Money agent at Adetola in Ijaiye-Ojokoro, was charged N300 for the transaction.

Before the lockdown, N100 was charged on N5,000 and below, while another N100 is added on subsequent withdrawals or deposits ofNN5,000 value.

An IT expert who spoke to BH on the development said financial institutions that are more grounded in financial technology like First Bank, OPay, Paga and MTN are making fortune from the lockdown.

Another sector that is witnessing a boom in this time of lockdown is the telecoms sector. Checks revealed that Nigerians now spend more on air time and data to be able to communicate with the outside world.

Mostly affected are companies that have barred their workers from coming to the office but asked them to continue to work from home. Many firms have resorted to online or video meetings daily, which has pushed up their airtime and data cost.

A customer service agent with a pay-TV provider in Lagos saddled with the responsibility of resolving disputes with customers, Adunola Ibidapo, said since she started working from home, she no longer has the luxury of using office facilities to work.

“Our work can’t be done without reliable mobile or internet connectivity and because of the work-from-home directive of my company, I am now spending a lot to remain online.

According to her, before the lockdown, she used to spend N5,000 on data monthly to be able to work from home on weekends. Just Saturdays and Sundays.

“But now, I have spent over N10,000 on data subscription to Spectranet since the work at home order began. Let me add however that the company is bearing the cost”Ibidapo said.

BH also gathered that several companies, including media houses, now work at home. Several media houses, especially small and medium ones, have stopped printing and now do online editions.

In other to accomplish this, they need data and airtime. “Before we shut down production, I used to load N10,000 monthly, N5000 for airtime and N5000 for data. The amount is low because  I used office facilities a lot. However, since we started working at home my airtime and data subscription finished in just a week”, declared a journalist who did not want his identity disclosed.

Checks revealed that most Nigerians like Ibidapo and the journalist now rely heavily on airtime and mobile data to keep up with office work during the lockdown.

Schools and churches are not left out as they now stream their classes and services online,  thus putting more money in the pockets of telecoms firms.

Many Nigerians are also leveraging the Internet for online gaming and entertainment, resulting in a rise in internet traffic.

Attesting to this, the Director of Public Affairs, Nigerian Communications Commission ((NCC), Dr Henry Nkemadu, said there had been a large amount of voice and data traffic in the past weeks.

“As a result of the lockdown, the amount of voice and data usage has increased by huge amounts and there is a need to expand the network to provide optimum quality of service to users sitting at home,” Nkemadu noted.

Reacting, the Chief Executive Officer, Internet Exchange Point of Nigeria, Muhammed Rudman, said a surge in internet traffic was noticed since the lockdown started midnight of March 31.

IXPN is a centre point for local traffic exchange between network operators and Internet Protocol providers.

He disclosed that internet traffic has increased by 10 per cent in the past two weeks as many companies introduced work-from-home policy a week before the government-imposed Lockdown.

Also, a fintech that provides financial services to both companies and individuals are reaping from the lockdown.

They include Visa, MasterCard, Interswitch, SystemSpecs and others. BH leant that the tech firms are entitled to a percentage of each online transaction and are benefitting from the spike in online activities.

Other beneficiaries are e-commerce firms, including Konga, PricePally and Jumia.

Due to restrictions, Nigerians have embraced these companies in the delivery of foods, medical, and essential items.

According to the Chief Executive Officer, PricePally, Luther Lawoyin, demand for its services has skyrocketed during the lockdown as the firm supplies more items in a day than it used to do in a week.

“When this COVID-19 came up, what we do is enable people to sit down at home and get their food items delivered to them instead of going to the market, which increases their chances of contracting the virus,” he said.

Due to the spike in orders and their quest to win more market share, both Jumia and Konga offered Nigerians huge discounts and free deliveries to cushion the effects of the COVID-19 pandemic.

According to the e-commerce companies the discounts were implemented to cushion the effects of a possible lockdown on their customers.

They said while in self-isolation, Nigerians still need basic items like groceries, toiletries among other things.

Speaking on the price slash, Jumia Nigeria CEO, Massimiliano Spalazzi, said the company has over six million home essential products and groceries that Nigerians to choose from.

Similarly, Konga also offered discounts to its customers through vouchers. Apart from this, Konga also announced that all purchases will be delivered for free.

“Deliveries are now Super-Safe & Free. We have equipped our last-mile delivery agents and partners with gloves and face-masks”, Konga said.

Owing to these strategies, BH learnt that orders for goods from the two e-commerce giants, and in essence returns have tripled.