Micro, small and medium-scale enterprises (MSMEs) sector is regarded as the major driving force of every economy, irrespective of the country. The MSMEs sector, according to the International Council for Small Business (ICSB), generally make up over 90 percent of all firms and account for an average of 60 to 70 percent of total employment and 50 percent of Gross Domestic Product (GDP) of any economy.
According to the United States Trade Representative, the MSMEs, numbering over 30 million in the US, are said to account for nearly two-thirds of the net new private sector jobs in recent decades. In India, the MSME sector is estimated to be more than 42 million – a staggering 95 percent of the total industrial units in the country and providing 40 percent of India’s workforce.
In Nigeria, the statistics show the same trend. According to the Nigerian Bureau of Statistics (NBS), the sector has over 37 million MSMEs, and employs over 54 million skilled and unskilled labour while contributing about 54 percent to GDP of the country. The role that the sector plays in the economy, its peculiar challenges and the need to assist it to realise its full potential are what make the governments all over the world put in place various policies and structures that aid the development of the sector. In Nigeria, we have the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), a specialist agency created by the government to cater for the needs of the sector.
Unfortunately, despite the efforts of the government towards addressing the challenges of the sector, operators of MSMEs still face a plethora of challenges, especially in the areas of inventory management, access to working capital, transport and logistics, pricing volatility etc. These challenges are the main reasons many of the MSMEs have a high failure rate, at the worst, or for the ‘lucky’ ones, have low growth and profitability rates.
This tide seems to be changing for the Nigerian MSMEs, with the coming on board of Alerzo Limited, a business-to-business e-commerce platform that is providing retailers in the informal sector easier, faster and smarter access to a wide assortment of products on its retail App, Alerzoshop. Founded in 2019 by Adewale Opaleye, Alerzo Limited is set to take the Nigerian informal retailers to a whole new world of opportunities by equipping them with digital products that will increase their profit margins.
Opaleye noted some of the challenges facing the informal retail market include, “limited inventory due to high demands; limited access to finance which sometimes leads them to buy adulterated products; the market is clustered and products are often overpriced because prices are largely unregulated; distance to market; opportunity costs; dangers of travel; and inadequate transport system for conveying goods.”
Alerzo’s founder, whose mother was an informal retailer and had to personally deal with the prototype MSMEs challenges, in the course of his studies in a university in China, saw first-hand how China used technology to address most of the challenges its MSMEs are having. Seeing that the same technology could be deployed in his home country, Opaleye had to return to Nigeria to deploy similar technology to address the retailers’ challenges in the country. This led to the founding of Alerzo Nigeria.
Since the establishment of the e-commerce platform, retailers on its platform have been given a lifeline to boost their businesses. For example, Alerzo has created Alerzoshop, a digital app that makes the lives of our informal retailers easier. Customers on the Alerzo platform buy their products at cheaper rates, enjoy huge discounts and have their orders delivered to them at no extra cost.
Little wonder that, in less than two years, the company seems to have taken the South-Western states by the storm and is making steady incursion into the North-Western and North-Central states of the federation.
Opaleye, the founder and chief executive officer of the company, seems to be happy at what Alerzo has been able to achieve in the short time it has been in operation.
“We’re creating an environment where informal retailers no longer have to deal with these issues, we change the landscape for them one delivery at a time. With our delivery services, retailers save time, energy, and resources that they would have otherwise expended in restocking. These benefits have resulted in 85 percent of our retailers reducing their 2 – 4 times a week restock trips to zero.”