The conventional framing of African e-commerce positions digital platforms as the future and traditional trade as the past. Deepankar Rustagi, CEO of OmniRetail, came to the Lagos Business Sc
The conventional framing of African e-commerce positions digital platforms as the future and traditional trade as the past. Deepankar Rustagi, CEO of OmniRetail, came to the Lagos Business School E-commerce and Payments Forum with the opinion that traditional trade is not the past.
It is the present, and any platform that refuses to meet it there is building on the wrong foundation.
Rustagi opened with a number that reframes the entire conversation: “Nigeria is a market where 95% of the trade is decentralised and traditional. Only 5% of goods move through digital or modern trade”.
The 95% moves through distributors in Mushin, Agege, Trade Fair and through millions of neighbourhood retailers, the Mama Indomie stores and Auntie Milo stores that have served the same customers for decades. The e-commerce conversation in Nigeria has largely been conducted around the 5%.
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OmniRetail’s Rustagi define the manufacturer’s dilemmaRustagi described the problem from the manufacturer’s perspective to make the stakes concrete.
Africa’s FMCG market is worth approximately $600 billion, with Nigeria accounting for around 30 billion of that. The opportunity is evident. The friction is structural. A manufacturer who produces chinchin, packages it correctly and wants to distribute it faces a set of compounding challenges.
These include building a sales team large enough to cover Nigeria’s approximately 2 million retail points, securing warehouse space, assembling a logistics fleet, and extending credit to retailers who have no collateral but represent the entire path to the end consumer.
“The reality of a manufacturer is that when someone starts to produce something as basic as chinchin and wants to distribute it, he or she does not even know who the actual customer is, does not know which goods are stocked,” Rustagi said. “Manufacturing is not just about manufacturing. You can be successful at manufacturing, but you will be unsuccessful if your distribution is not built.”
Every company in the sector ends up rebuilding the same distribution infrastructure from scratch, and most cannot afford to do it well.
A smiling retailer while using OmniRetail service OmniRetail’s response, since 2017, is what Rustagi describes as a network of networks.
The platform connects over 100 manufacturers, thousands of distributors and hundreds of thousands of retailers across Nigeria and Ghana on a single system, creating the visibility that previously disappeared the moment goods left the factory floor.
Manufacturers can see which products are stocked where. Distributors gain access to a wider pool of supplier relationships. Retailers get access to a broader product range than any single distributor relationship can provide.
The platform also addresses the credit problem directly. Working capital financing is embedded into the transaction layer, with loan decisions processed in seconds based on transaction history rather than collateral.
The logic is that a retailer who has been transacting reliably on the platform has already demonstrated creditworthiness in the most relevant way possible, and the platform has the data to act on it.
“When the sales is happening well, there is no problem. When the sales are not going as well, there is no fixed way to move your sales forward,” Rustagi said of the traditional system, describing the anxiety that sits behind every inventory decision a small manufacturer makes.
Beyond distribution, OmniRetail has also been rethinking the channel through which commerce happens.
Rustagi’s argument was that the e-commerce sector has spent most of its energy building storefronts modelled on developed market behaviour, where a shopper browses, adds to cart and checks out, while largely ignoring the way Nigerian consumers actually prefer to buy.
“Instagram and WhatsApp are probably the two biggest actual e-commerce channels in Nigeria,” he said. “There is a lot of work that needs to be done around how we enable conversational commerce, so that customers can shop the way they naturally would.”OmniRetail has been piloting AI-powered ordering for retailers, where a retailer can speak to a bot in natural language, including pidgin, to place orders, check prices and complete checkout without ever interacting with a formal storefront. The design choice is that the interface fits the user rather than asking the user to fit the interface.
Rustagi closed his session with a call for collaboration that echoed across the day’s other panels.
If Konga has built a warehouse network, there is no commercial logic in a second player replicating it. If someone has built payment rails, replicating them produces fragmentation rather than competition.
“I think a lot more collaboration would allow us all to be more efficient,” he said. The argument for OmniRetail’s model is ultimately that 95% is too large and too complex for any single company to digitise alone, and the attempt to do so is why so much investment in African commerce has produced so little penetration outside the top tier of the market.
