Description

Courier service is a facility by which messages, consignment, goods, parcels, mails, etc. to be delivered from one place to another place. A courier company offers delivery facilities in neighborhoods or universal areas.

Courier services are recognized from their tracking features, speed, security, transportation mode, etc. Courier service is the fundamental requirement for the individuals or organizations that sell items on the web and need a delivery solution for sending numerous packages.

Courier services use courier software services to provide electronic tracking details and electronic proof of delivery. Courier services are generally expensive when compared with general mail services.

The Global Courier and Delivery Services industry comprises two (2) segments, which include larger couriers and smaller local delivery companies. Together, these segments provide air, surface and express courier delivery services of parcels, documents and packages to a wide variety of consumers.

Over the past five (5) years, many developments in the online retailing space have driven industry growth. However, internet use has diminished the need for shipment of some goods, such as documents that can be scanned and sent electronically.

Over the five years to 2024, demand for courier and delivery services is expected to grow. Demand for high-end, time-sensitive goods will likely rise as a result of increased consumer spending.

Global Courier, Express & Parcel Services Market is expected to reach $397. 3 Billion by 2027. Amid the COVID-19 crisis, the global market for Courier, Express & Parcel Services estimated at US$285 Billion in the year 2020, is projected to reach a revised size of US$397.

The Nigeria freight and logistics market has been on a slow growth trend for the past many years but is expected to grow at a compound annual growth rate (CAGR) of around four percent (4%) in the coming years. Over the past few years, Nigeria has experienced a slow down due to poor infrastructure and logistical issues along with delayed custom procedures and congestion on the roads.

As a result the country was ranked one hundred and forty-five (145) out of one hundred and ninety (190) economies in 2018 in ease of doing business index and ranks one hundred and twelve (112) in the logistics performance index (2018). The current growth in Nigeria logistics Market has been due to the infrastructural developments in Railways and Airways, improvement in foreign ties with other countries, developing manufacturing and export sector and the rising e-commerce sector.

The E-Commerce market has developed quite late in the African continent as compared to the US and China. In the last decade online grocery shopping has become a thing and has changed the way Nigerians shop. All kinds of items are now available online such as books, food, toiletries, clothes, electronics, furniture etc. In 2019, the revenue of the Nigerian E-Commerce market amounted to US$ 4,885.7 million.

The revenue is expected to grow at a compound annual growth rate (CAGR) of twenty point five percent (20.5%) in the period of 2019-2023, resulting in a market volume of around US$ 10,290.6 million by 2023.

In 2019, the market’s largest segment was fashion with a market volume of US$ 1,761.9 million and user penetration was fifty two point two percent (52.2%) and is expected to reach seventy-five point two percent (75.2%) by 2023. With the ease of payments through mobile money and debit cards, increasing internet penetration is expected to help this sector to grow further in Nigeria and also give a boost to the logistics and freight market.

With the booming ecommerce in Nigeria, the delivery providers in the country like DHL, FedEx, EMS, UPS etc. have seen a steady growth in their revenues and as the population is increasing with average revenue per user amounting to US$ 46.53 in 2019, the future of logistics market in the region looks promising.

The market for courier services in Nigeria is national. With a population of over two hundred million (200,000,000) people and an estimated national population growth rate of five point seven percent (5.7%) per annum, average economic growth rate of three point five percent (3.5%) per annum in the past five (5) years, Nigeria is a large, expanding and sustainable market for courier business.

This report seeks to examine the financial viability or otherwise of eastablishing a small scale courier company of five (5) units of brand new Qlink X-Ranger 200 2020 dispatch bike with container and providing courier services in Lagos, Nigeria.