Nigeria Last Mile Delivery Market

Nigeria Last Mile Delivery Market Overview

• The Nigeria Last Mile Delivery Market is valued at USD 230 million, based on a five-year historical analysis. This growth is primarily driven by the rapid expansion of e-commerce, urbanization, and the increasing demand for efficient logistics solutions. The rise in smartphone penetration and digital payment systems has further facilitated the growth of last-mile delivery services, making them more accessible to consumers .
• Lagos, Abuja, and Port Harcourt are the dominant cities in the Nigeria Last Mile Delivery Market. Lagos, being the commercial hub, has a high concentration of businesses and consumers, while Abuja serves as the political center with growing e-commerce activities. Port Harcourt, with its oil and gas industry, also contributes significantly to the demand for delivery services, making these cities key players in the market .
• In 2023, the Nigerian government implemented the National Transport Policy, issued by the Federal Ministry of Transportation, which aims to enhance the logistics and transportation sector. This policy includes measures to improve infrastructure, streamline regulations, and promote public-private partnerships, ultimately fostering a more efficient last-mile delivery ecosystem across the country .

Nigeria Last Mile Delivery Market Segmentation

By Type:The last mile delivery market can be segmented into various types, including B2C Delivery, B2B Delivery, C2C Delivery, Same-Day Delivery, Scheduled Delivery, Express Delivery, Hyperlocal Delivery, and Others. Among these, B2C Delivery is the most dominant segment, driven by the surge in online shopping and consumer demand for quick and reliable delivery services. The convenience of receiving goods directly at home has led to increased adoption of B2C delivery solutions, making it a key driver of market growth. Recent trends also show a rise in hyperlocal and express delivery models, especially in urban centers, as consumers increasingly expect faster and more flexible delivery options .

By End-User:The end-user segmentation includes Retail, E-commerce, Food and Beverage, Pharmaceuticals, Consumer Electronics, Manufacturing, Agriculture, and Others. The E-commerce segment is leading this market due to the exponential growth of online shopping platforms and the increasing consumer preference for home delivery services. Retailers are increasingly partnering with logistics providers to enhance their delivery capabilities, further solidifying the E-commerce segment's dominance. Additionally, food and beverage delivery has seen notable growth, driven by the expansion of online food ordering platforms and changing consumer lifestyles .

Nigeria Last Mile Delivery Market Competitive Landscape

The Nigeria Last Mile Delivery Market is characterized by a dynamic mix of regional and international players. Leading participants such as Jumia Logistics, GIG Logistics, DHL Nigeria, FedEx Nigeria, UPS Nigeria, Konga Express, Sendbox, Max.ng, OPay Logistics, Kwik Delivery, TSL Logistics, Red Star Express, Aramex Nigeria, Transport Services Limited, Errand360 contribute to innovation, geographic expansion, and service delivery in this space.

Nigeria Last Mile Delivery Market Industry Analysis

Growth Drivers

• Urbanization and Population Growth:Nigeria's urban population is projected to reach 223 million in future, contributing to increased demand for last mile delivery services. Urbanization is expected to rise to 53% from 50% in 2020, leading to a higher concentration of consumers in cities. This demographic shift creates a larger customer base for delivery services, as urban dwellers increasingly seek convenience in shopping and delivery options, driving growth in the last mile delivery sector.
• E-commerce Expansion:The Nigerian e-commerce market is anticipated to grow to $29 billion in future, fueled by increased internet penetration, which is projected to reach 60% of the population. This growth in e-commerce directly correlates with the demand for efficient last mile delivery solutions. As more consumers turn to online shopping, logistics companies must adapt to meet the rising expectations for timely and reliable delivery services, thus propelling the last mile delivery market forward.
• Technological Advancements in Logistics:The adoption of technology in logistics is transforming Nigeria's last mile delivery landscape. In future, investments in logistics technology are expected to exceed $1 billion, enhancing operational efficiency. Innovations such as real-time tracking, route optimization, and automated warehousing are becoming standard practices. These advancements not only improve service delivery but also reduce costs, making last mile delivery more accessible and efficient for both providers and consumers.

Market Challenges

• Infrastructure Deficiencies:Nigeria's logistics infrastructure remains underdeveloped, with only 20% of roads in urban areas being paved. This lack of reliable infrastructure leads to delays and increased operational costs for last mile delivery services. Poor road conditions and inadequate transportation networks hinder timely deliveries, affecting customer satisfaction and limiting the growth potential of the last mile delivery market in Nigeria.
• High Operational Costs:The operational costs for last mile delivery in Nigeria are significantly high, with fuel prices averaging 250 Naira per liter in future. Coupled with rising vehicle maintenance costs and labor expenses, logistics companies face challenges in maintaining profitability. These high costs can deter new entrants into the market and limit the expansion capabilities of existing players, posing a significant challenge to the industry's growth.

Nigeria Last Mile Delivery Market Future Outlook

The future of Nigeria's last mile delivery market appears promising, driven by urbanization and the rapid growth of e-commerce. As consumer preferences shift towards faster delivery options, companies are likely to invest in innovative technologies and partnerships to enhance service efficiency. Additionally, the increasing adoption of mobile payment solutions will facilitate smoother transactions, further boosting market growth. However, addressing infrastructure challenges and operational costs will be crucial for sustaining this momentum and ensuring long-term success in the sector.

Market Opportunities

• Growth of Mobile Payment Solutions:The rise of mobile payment platforms, projected to reach 50 million users in future, presents a significant opportunity for last mile delivery services. By integrating these solutions, companies can streamline payment processes, enhance customer experience, and reduce transaction times, ultimately driving higher sales and customer retention in the competitive delivery landscape.
• Expansion into Underserved Regions:With approximately 47% of Nigeria's population residing in rural areas, there is a substantial opportunity for last mile delivery services to expand into these underserved regions. By establishing logistics networks in these areas, companies can tap into a new customer base, providing essential goods and services while driving economic growth and improving access to products for rural consumers.