As the digital sector transforms African markets, it is opening up opportunities for other industries to flourish. The e-commerce sector is expected to grow even bigger over the next few years as internet penetration continues to deepen in Sub-Saharan Africa. In the same manner that mobile phones have modified communications in Africa, e-commerce is facilitating electronic purchasing, allowing Africa to surpass many infrastructural and administrative obstacles, heading it straight to the digital age.
Within the coming years, e-commerce will play an integral role within retail markets by enabling the consumer sector to grow. This in turn will help create jobs for millions of Africans, supporting demographic shifts. E-commerce is likely to be boosted as there is an ongoing rapid rise in smartphone users, wireless service providers and general internet connectivity within Africa, which strongly suggests that large profits can be generated from this digital sector. According to Groupe Speciale Mobile Association (GSMA), over the past few years, Sub-Saharan Africa has been noted as one of the world’s fastest growing mobile regions with subscriber rates more than twice the global average. This has resulted in more than USD $100 billion being contributed to the region’s economy. In addition, Quartz states that Africa’s e-commerce rate (25.8%) is growing at a faster pace than the global rate (16.8%) and, in most of Africa’s biggest markets, the majority of internet users already shop online or plan to do so in the near future.
According to PC World, Sub-Saharan Africa is a target for retailers because it has a population of close to a billion people with an increasingly fast urbanization rate. Deloitte revealed that Africa’s middle class has risen significantly and it is expected to grow by 42% by 2060. Similarly, 50% of Africa is expected to have access to the internet by 2025 and online shopping has the potential to account for 10% of retail sales or $75 billion (McKinsey). This is inspiring the emergence of many e-commerce platforms to take advantage of Africa’s newfound wealth. Some of the leading African countries within the e-commerce landscape include: Nigeria, South Africa, Ghana, Morocco and Kenya. One of the largest main investors in Africa’s e-commerce sector is the African Internet Group (AIG) which is represented in more than 23 African countries employing about 5,000 people and hosting a varied portfolio including online retailers Jumia and Kaymu. Nigerian-based Jumia, for example, has become the leader of e-commerce business on the continent. It claims to have an estimated 150, 000 visitors per day and generated more than USD $28 million in revenue in 2014.
Another example of a successful Nigerian based e-commerce platform is Mall for Africa (MFA) which enables consumers to access over 150 global retailers including brands from the US and the UK. Mall for Africa also has an app which is available for PCs as well as mobile phones. Consumers have the option of paying via PayPal, Visa credit card or MFA’s own ‘WebCard’ which reloads with US dollars like a debit card for people who don’t use PayPal or Visa.
As internet connections continue to proliferate across Africa, innovative technology will open doors to new opportunities for e-commerce making it extremely likely that consumers within Africa are going to gravitate towards online purchasing technologies. As the e-commerce trend continues to grow throughout the continent, it is becoming clear that the coming decade will be a defining period for digital markets across Africa and generate much excitement among innovators and investors.
