Irrespective of the challenges faced in the area of appropriate electronic payment systems, coupled with occasional limited access to internet, many experts and e-Commerce companies still remain positive about e-Commerce growth in Africa.
Relating to a report published in 2013 by Mckinsey and Company Limited, e-commerce is expected to grow considerably over the next few years. As such, by the year 2025, it is expected to account for 10% of retail sales in the continent’s largest economies, which will subsequently translate into about US$75bn in annual revenue.
In the midst of these, more and more African and International companies tend to be interested in investing in the e-commerce market and aim to expand their activities in Africa.
Historically, Middle East and Africa region (MEA) witnessed an important growth of e-Commerce sales between 2011 - 2016, and this accounted for about 26% positive growth in Africa, while it only reached 17% worldwide.
This development recorded can be partly explained in relation to the development of the mobile internet and the internet penetration rate which reached 26.5% during the second quarter of 2014.
Subsequently, the growth of the middle class also manifested as a key drive towards the development of electronic transactions in Africa. Endowed with a bigger spending power, they (the middle class) are looking for better products, at the best price and with short delivery time, even in remote area. For them, ecommerce is the best way to satisfy these new expectations.
Notably, the evolution of ecommerce doesn't seem to be the same for all the African countries, as estimates which showed a positive growth of e-Commerce sales between 2009 and 2012 revealed Egypt as the country with the largest e-commerce sales, recording 3.9 billion in 2012.
In 2013, Middle East and Africa region accounted for about 2.2% of global B2C e-commerce. However, it can be ascertained that not only did the number and amount of transaction increase, but also the number of e-buyers, expected to reach a positive growth of 13% in MEA.
Looking at the challenges for e-retailers in Africa, it pertinent that before investing in the e-commerce market, companies need to consider many elements and to build local tailored solutions that will fit the local population needs.
In addition to large cultural differences like languages, they have to adapt all the aspects of the strategy, ranging from:
(a) Logistic: how to deliver all over a country when villages do not have street names or numbers?
(b) Marketing: Occidental street marketing must be reviewed to adapt the local market. For instance, Jumia, entering the Moroccan market gave jackets to all street guards of Casablanca in order to increase the company’s reputation
(c) Human resources: high need of recruiting people who can fit multinational standards with good knowledge of the local market
Moreover, in Middle East and Africa region 48% of e-transactions value are paid by cash on delivery, this amount is consistently high compared to the payments methods used worldwide (only 5% use cash on delivery).
Furthermore, e-commerce in Africa is not left out in success story, as progress has been recorded in many areas since the recent years.
Since 2012, several actors have invested in the e-commerce market in Africa. They were able to adapt their strategy to the local market and enable people to have access to many products.
Jumia, founded in 2012 in Nigeria by African Internet Group (supported by Rocket Group) has manifested as one of the leading online retailers in Africa, with its presence recorded in different countries in Africa, including Morocco and Nigeria. And recording around 4000 daily purchases in Nigeria for an average amount of US$100.
Rupu, founded in 2010 by Ringier as an online shop is presently operated in Kenya, is believed to have an important presence in East Africa, recording around 1000 daily orders, with 60 to 70 deals offered daily to about 70000 clients.
Konga, founded in 2012 by Sim Shagaya and presenty operated in Nigeria, is considered as one of the biggest market place in the country, recording around 3000 daily orders.
Avito, launched in 2007 by two Swedish entrepreneurs is one of the leading classifieds site in Morocco that has recently merged with Bikhir.ma. To mention but a few.
In a nutshell, companies who are willing to invest in the e-commerce market in Africa need to understand that besides launching an e-platform, many elements need to be considered. These include relying on partnerships with other companies with a deep African Knowledge and benefiting from their logistics and transport expertise.