NEGOSENTRO.COM | eCommerce Marketplace Africa: A Sneak Peek into African eCommerce | The itch of buying things online is spreading in every corner of the world today and Africa is no far behind. Yet, eCommerce in Africa is a big challenge due to lower literacy and internet penetration, poverty, and logistical inefficiencies. But the grass is getting greener slowly and gradually.
With the advancement of technology and smartphone conception, access to the internet and mobile payment systems have seen an increase in the past few years due to which African countries are now welcoming the digital change and eCommerce is one among them.
eCommerce is thriving tremendously and when we say that you will be surprised to know that in 2018 alone eCommerce saw an increase of 23.3% when compared to 2017. The eCommerce sector in Africa generated $16.5 billion in revenue in 2017, which according to Statista may cross $29 billion by 2022. So, you can guess, what it can do to the untapped and emerging market of Africa if given a chance, pretty sure, the figures will double up.
Although both, Africa’s e- and m-commerce are doing pretty well, it can be said that Africa is more of a mobile eCommerce market. Why? Because only a few consumers own desktop or laptop computers while smartphones and with 400 million internet users in Africa, which is the second-largest internet-user population on the planet, just after China, mobile shopping is easier for them than desktop one.
What’s holding the e- or m-commerce success back in Africa?
The reasons African e- or m-Commerce is taking long to prosper like other continents are below;
Delivery difficulties – First of all, the lack of paved roads prevent a majority of logistics companies to offer their delivery services to certain places in Africa and even if they offer couriers riding bicycles or motorbikes can only make most deliveries in Africa. Next, the lack of a national street address system in most African countries causes much trouble in delivering online products. The delivery person and customer have to be in constant touch for the product to reach the right address. Lastly, the last-mile delivery is so extraordinarily expensive, that transportation costs are three times higher than they are in developed countries.
Lack of trust – Africans are a bit uncertain about online products due to fraud and the difficulty in receiving the product, as to whether they will ever get it or not.
Payment issues – Half of the African population are unbanked. However, thanks to the smartphone and the internet, almost 280 million Africans have mobile wallets, hence eCommerce merchants have to set up their payment methods as such.
What’s the scope?
The above-mention barriers are not so difficult that can’t be overcome. Limitation of logistics and payments are just a matter of time. Moreover, consumers in Africa want the same thing as consumers everywhere else: they want good products at a good price and quality which means the appetite for eCommerce is expanding in Africa and hence there is a huge scope.
As far as the delivery is concerned, partnering with locals will make it easier for you to deliver products. A right local player, who has the right local knowledge will make the door-to-door delivery a piece of cake.
A lot of small business in Africa run on a daily basis. For them, eCommerce may sound like a threat. But, if you show them the opportunity to proper and market their small business on a global scale, there is no doubt they won’t accept. It will increase the cross-border selling which means a boom for eCommerce sales.
- Today a smartphone is cheaper than food and hence affording it is no big issue today. With people spending their time more on mobiles, m-Commerce seems to be a viable option. Moreover, it gives the freedom to shop anytime, anywhere which makes it easier to get something as soon as you like it.
- Staying in the trend. Youths and mobiles are always connected and are shopping spree as well. Online shopping is easy for them, plus they are even making their parents get a hold to it which means mobile shoppers will hardly see a decline.
- Innovation at every step. Enhanced user experiences, customisation, personalisation, unique features, all this attract users and a mobile commerce solution offers it all that impresses customers.
- With Artificial Intelligence (AI) and chatbots integrated with apps and phones, they are bringing in the ease of shopping. The elimination of manually typing the product name, searches, payment and address details is making people love mCommerce even more.
- Opening the web page every time you shop can be daunting. With mobile apps, the customers can shop or save products and the personalised experience in it also increases the probability of purchase.
It is evident from the consumer behaviour that mCommerce has a bright future ahead because smartphones have become part of people’s lives today. The traditional way of shopping is fading soon and looking at the way Africa is moving ahead in terms of development, mCommerce will rule and m-commerce software solutions will be in high demand.