The Nigerian e-commerce ecosystem has witnessed exponential growth, driven largely by digital platforms that enable seamless online transactions. While local players like Jumia and Konga have a presence, non-resident e-commerce platforms, such as AliExpress, Amazon, Shein, and Temu, have also carved out a share of the market, influencing the ecosystem in ways that do not directly benefit the local economy, as they often lack physical offices, do not create local jobs, and are not subject to local taxes. Let us explore the benefits, challenges, and economic implications of these foreign platforms in Nigeria, drawing insights from global case studies. Competitive playbook of non-resident E-Commerce platforms Each major non-resident e-commerce platform has employed distinct strategies to capture the Nigerian market: AliExpress (Massive supplier network & price undercutting): Operates as a bridge between Chinese manufacturers and global consumers, offering low-cost products by cutting out traditional intermediaries. This allows it to outprice many local sellers. Amazon (Logistics and brand trust): While not heavily localised in Nigeria, Amazon leverages its brand reputation, extensive product offerings, and streamlined logistics where available. Its dominance is largely in high-value goods. Shein (Ultra-fast fashion & AI-driven personalisation): Uses data analytics to predict fashion trends and deliver low-cost apparel, creating a highly responsive supply chain that keeps costs minimal. Temu (Aggressive pricing & viral marketing): A newer entrant, Temu deploys extreme discounts, referral incentives, and gamification, replicating the group-buying model that made its parent company, Pinduoduo, successful in China. Read also: E-commerce platform taps AI to simplify shopping experience Economic impact of local and foreign E-Commerce in Nigeria 1. Market growth and consumer access: According to data from Statista, the Nigerian e-commerce market was valued at approximately $8.53 billion in 2024 and is projected to reach $14.92 billion by 2029, growing at a compound annual growth rate (CAGR) of 11.82 percent. This expansion has been largely fuelled by mobile e-commerce, with over 70 percent of online transactions happening via smartphones. The presence of foreign e-commerce platforms has contributed significantly to this growth by offering Nigerian consumers more variety, competitive pricing, and access to global products. The affordability and convenience of foreign e-commerce platforms have contributed significantly to this expansion. 2. Impact on local businesses and employment: While non-resident platforms enhance consumer choice, with platforms like Temu also providing opportunities for resellers to source cheap goods, they also pose stiff competition for local e-commerce businesses. For example, local retailers and SMEs struggle to compete with the pricing, logistics, and supply chain advantages of such global platforms. Unlike local players who invest in warehousing and local employment, non-resident companies often operate with minimal local infrastructure, leading to capital flight. 3. Small business disruptions and opportunities: The rise of non-resident e-commerce platforms presents a double-edged sword for Nigerian small businesses. On one hand, platforms like AliExpress and Temu allow small retailers to source products at lower prices, reducing overhead costs. On the other hand, the same platforms serve as direct competitors, offering products at lower prices due to their economies of scale and supplier networks. They squeeze margins for Nigerian businesses that cannot compete on price. Local SMEs face the dual challenge of high operational expenses and stiff competition from foreign sellers with superior economies of scale. Many Nigerian SMEs struggle with visibility on these platforms, facing difficulties in logistics, payments, and customer trust compared to well-established foreign sellers. Without strategic policies to protect and empower local businesses, small enterprises risk being edged out of the market. 4. Taxation and revenue implications: In response to growing digital commerce, Nigeria introduced a 6 percent tax on digital services offered by non-resident companies, including e-commerce platforms. While this tax is expected to increase government revenue, it may also lead to higher prices for consumers as companies pass the costs down. The effectiveness of enforcing this tax remains a challenge, particularly with decentralised sellers on platforms like AliExpress and Temu. Lessons from global markets India: India introduced strict e-commerce foreign investment rules to protect local retailers. Foreign-owned platforms like Amazon India and Flipkart (owned by Walmart) are restricted from selling their own inventory, forcing them to operate as third-party marketplaces. This policy aims to level the playing field for local businesses. European Union (EU): The EU has enforced Digital Services Taxes (DSTs) on large e-commerce platforms, ensuring that they contribute fairly to national revenues. Additionally, consumer protection laws mandate clearer refund policies and product quality standards for non-resident sellers. South Africa: South Africa has embraced localised partnerships, where international platforms collaborate with local courier services and payment processors to facilitate smoother trade. We have also seen this partnership and collaboration between Nigerian logistics firms and international platforms. Read also: E-commerce business in Nigeria – Fast growing, but there is still more room Recommendations for Nigeria Strengthening Local E-Commerce – Encouraging investment in local e-commerce infrastructure to enhance competitiveness. Improved Regulatory Frameworks – Implementing policies that balance consumer access with local business sustainability. Tax Compliance Mechanisms – Enhancing tax collection from non-resident platforms to ensure fair contributions to the Nigerian economy. Consumer Protection Standards: Establishing strict refund, data privacy, and quality control policies for non-resident e-commerce platforms would safeguard Nigerian shoppers. From the discussion, we can deduce that local non-resident e-commerce platforms are indeed contributing to the Nigerian digital marketplace, offering variety and convenience. However, the activities of non-residents undoubtedly present new challenges, especially to local businesses, tax enforcement, and economic sustainability, which have also been experienced in other countries, like in the case studies. While some countries have taken proactive measures to manage these influences, Nigeria must ask itself: How can the nation balance foreign competition with sustainable economic growth? And what policy framework will best balance consumer benefits with long-term economic resilience?