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Technology as Disruptive Tool for Used Car Market

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  • Technology as Disruptive Tool for Used Car Market

Just as the advancement in new technologies is disrupting many businesses across various sectors of the economy, technology is also fast becoming a major influencer of the already thriving used car market in Nigeria, writes Emma Okonji.

Global technology evolution is gradually defining how businesses are run and at the same time setting the pace for business growth and development. The recent global technology disruption is helping businesses to automate office functions such as record keeping, accounting and payroll. Business owners are now using technology to create secure environments for maintaining sensitive business or consumer information. With technology, business owners can create positive disruptions that will rake in more money into the business and at the same time meet customers’ demands. Such is the case with Nigeria’s auto business, where Nigeria spends an estimated N1.2 trillion on importation of vehicles, according to recent statistics.

Another statistics released recently by PricewaterhouseCoopers (PwC), Nigeria’s professional services firm, which highlighted the huge spend on vehicles importation into the country, mentioned that more than 70 per cent of imported vehicles are used ones, also known as ‘Tokunbo Cars’. This trend has created a thriving used-car market, spurred more by Nigeria’s new automotive policy, a development that saw car import tariff hiked by 35 per cent.

Over the past five years, technology has proven handy in playing a vital role in the success of the used-car market. Specifically, technology is being used to create online marketplaces, curating inventories of used-cars and connecting buyers with sellers.

Impact of technology

Technology has impacted so much on businesses, including the auto business in Nigeria, where the sales of Tokunbo cars thrives.

“In today’s auto business, whether you are selling brand new cars or Tokunbo, you cannot succeed without technology. Technology for dealers has become a very vital tool, more important than even a car dealer shop,” said Lukmon Oloidi who is a used-car dealer in Lagos.

According to him, technology has made it easy for dealers to show their inventories to people outside the main cities of Lagos, Abuja, Port Harcourt and Kaduna and even to some cities in neighboring countries.

Also, a marketing executive with one of Nigeria’s top online vehicle dealerships, Chinenye Ohala, said: “Technology has created a win-win situation for all parties and now both buyers and sellers can emerge satisfied winners. Thanks to technology, buyers can now access inventories from several competing online vehicle dealerships, compare prices and make smarter purchase decisions.”

General challenges

However, despite these successes, some challenges have persisted in the Nigerian auto business. While creating solutions to existing problems, it is not without its own inherent challenges, the major one being fraud which is a headache for most dealers today.

First, while the foreign used tokunbo cars have some form of structure around their distribution, the Nigerian-used tokunbo car market has remained highly fragmented. This has not only created greater problems for sellers but has also inspired a great deal of mistrust in the mind of buyers.

“Nigerian-used car market thrives in so much opacity. In most of the cases, there is no way of ascertaining the true condition of a car or how to make the right valuations,” noted a Lagos-based car dealer.

This remained the situation until another online vehicle marketplace with a unique model- Cars45 was launched in Nigeria in 2015.

Narrating his experiences and challenges in the Nigerian auto business, Head of Marketing at Cars45, an online platform for the sales of Tokunbo cars, Mr. Abiodun Onifade, said: “Unlike other car markets that focus on used cars sales only, Cars45 focuses on buying locally used cars from their owners in a fast and transparent process that is unparalleled in the history of tokunboh car business in Nigeria.”

Addressing the challenges with technology

The Managing Director of Cars45, Etop Ikpe, in his views on how to address the issue of pricing with Tokunbo cars, stated that, “We are easing the friction associated with selling used cars by focusing on three key areas. One of those areas is pricing. Ask any buyer or seller of Nigerian-used cars, and they will tell you that pricing is the thorniest issue in the process”.

According to him, Cars45 has been able to standardise the prices associated with used cars through a proprietary pricing algorithm.

“There is also the challenge of transparency. Most buyers already believe every used car dealers in Nigeria have something to hide. Cars45 addresses this challenge through a reliable car inspection service that helps to put the minds of both buyer and seller at rest,” he said.

According to Ikpe, “We run online live auctions which gives customers 100 per cent visibility into the price offers they receive for any car we inspect at our inspection locations.”

He said: “More so, Cars45 addresses the need for speed. In a market where it would traditionally take up to a month or two to find a serious buyer for a used-car, one can now sell a car in less than an hour without running the risk of underselling. On the average it takes about 30-45 days for users to sell their cars. At Cars45 however, we guarantee a price offer and cash in the bank process within an hour once a customer visits anyone of our inspection locations.”

Customers’ adoption

Nigerians have responded positively to this innovation, showing the great and effective impact technology can have in transforming the Nigerian auto market.

“Just like any great service solving a genuine problem, we have seen massive customer adoption of our model and this justifies our rapid expansion to 27 Centers across Lagos, Abuja and Port Harcourt in just 12 months while thousands of inspections have gone through our platform,” said Ikpe.

With the evolution of modern technologies, it is expected that Nigerians will experience more positive disruptions in their businesses beyond the auto business.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade long experience in the global financial market.

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Ecobank Upgrades Mobile App, Launches Cardless Withdrawal Service

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Ecobank Launches Cardless Withdrawal Service

In a move to reach the over 100 million unbanked Nigerians and Africans, Ecobank has launched a cardless withdrawal service to allow a large number of people outside the banking sector access bank services.

According to the bank, its mobile application was upgraded to an all-in-one bank account and payment/cash withdrawal tool.

In the statement released on social media, the lender said its ‘Xpress Cash’ functionality allows customers to access their cash ‘cardless’ at any Ecobank Automated Teller Machine (ATM) using only their mobile phone.

Customers can access cash via e-Token generated from their Ecobank mobile application, according to the bank. The innovation is seamless, secure and reliable.

The bank explained that the e-token can also be redeemed at any of its numerous agent locations across the country.

Speaking on the innovation, Ade Ayeyemi, the Chief Executive Officer (CEO), Ecobank, said “Innovating for customer convenience is in our DNA at Ecobank.

He added: “We have developed this fast, convenient and innovative mobile banking solution – cardless Xpress Cash at our ATMs and Agencies to embed our digital platforms within the lifestyle of our customers and improve the uptake of digital financial solutions by both banked and unbanked in Africa.

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9mobile Joins MTN, Launches E-Sim Service 

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9mobile Launches E-Sim Service

Nigeria’s mobile network operators have joined the rest of the world in launching E-Sim, an embedded sim.

In July, MTN Nigeria set the ball rolling with the launching of its E-Sim trial. This was followed by 9mobile that launched its E-Sim earlier this month.

E-Sim is a form of an in-built sim that is embedded directly into a device without using a physical Sim.

Speaking on the new E-Sim, the Acting Director of Marketing, 9mobile, Layi Onafowokan, described the latest move as the most excellent experience that advanced technology provides.

According to him, the E-Sim is an in-built sim embedded in mobile devices in order to reduce the possibility of losing or damaging sim and eliminate the stress of dealing with the cutting of sim cards or finding adaptors.

It also enables multiple usage and adaptation of one subscriber profile across a broad range of mobile communication devices, internet of things (IoT) and artificial intelligence (AI) apps including smart commuting, metering, tracking, and surveillance, rather than the restricted single-device use of the conventional SIM card.

Onafowokan said: “Customers can walk into any of our select 9mobile Experience Centres to request E-Sim activation. A QR code will be provided to scan and download E-Sim profile and perform the usual SIM registration.

He added that customers that activate E-Sim service will enjoy up to 7GB data-free while those who want to change to E-Sim will only do a SIM swap at approved centres.

E-Sim is compatible with Google Device like Pixel 3, 3 XL, 4, and Pixel 4 XL. Apple Device like Iphone 11, 11 Pro, 11 Pro Max, Xs, Xs Max and Iphone XR. Samsung S20 Series.

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Financial Institutions Owe Telecoms Over N17b in Unpaid USSD Service -NCC

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Banks Owe Telecommunication Companies Over N17b in Unpaid USSD Service

The Nigerian Communications Commission (NCC) has said financial institutions offering Unstructured Supplementary Service Data (USSD) service owe telecommunication companies over N17 billion.

Prof. Umar Danbatta, the Executive Vice Chairman, NCC, disclosed this on Thursday at a virtual forum organised by the Association of Licensed Telecommunications Operators of Nigeria (ALTON).

In the forum titled ‘Meeting the interests of government, consumers and telecoms companies in the era of Covid-19 and post COVID-19 pandemic for digital economy development’, Danbatta said the debt accumulated after the commission suspended its determination on USSD pricing in 2019.

However, the Chairman said in order to protect the interest of consumers and support the growing telecommunications sector, the commission has decided to revise the 2019 determination on USSD.

Speaking on the suspension of end-user billings Dr. Isa Pantami, the Minister of Communications and Digital Economy, said the decision was to ease customers’ burden and ensure justice across the board.

He said, “USSD is a service to banks and not telecoms consumers, and as such, banks should see themselves as corporate customers of telecoms operators with a duty to pay for using the telecoms networks and infrastructure, including USSD channels extended to them for service delivery to their customers.

According to him, “Mobile Network Operators (MNOs) have no direct relationship with bank customers, and cannot therefore charge directly for usage of USSD channel,” he explained.

The NCC, therefore, asked Mobile Network Operators (MNOs) and financial institutions offering USSD service to reach an agreement on a rate that works for both parties.

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