Plenty of Room to Grow for Booming African Ecommerce

An in-depth report published by Klasha, a Nigerian ecommerce payment facilitator, and Techcable, a prominent media platform, highlights the rapid growth and identifies the potentials, obstacles and possible routes forward for digital trade on the continent.

Improving internet infrastructure and rising mobile adoption rates have paved the way for a boom in African ecommerce.

An in-depth report published by Klasha, a Nigerian ecommerce payment facilitator, and Techcable, a prominent media platform, highlights the rapid growth and identifies the potentials, obstacles and possible routes forward for digital trade on the continent.

The report reveals that internet penetration ballooned from 3% of the continental population in 2005, to 28% in 2019. It goes in tandem with relatively affordable prices for mobile devices – three years ago, more than 83% of smartphones sold in Africa had a price tag of $200 or less.

Better access to finance via the increased availability of digital financial services is a key contributor to the flourishing ecommerce scene. Though digital trade is making an impression across the continent, a few countries stand out.

Nigeria, Kenya, South Africa, Morocco, and Egypt are at the forefront of ecommerce development.  These five countries – among the largest economies on the continent – account for a whopping 78% of the ecommerce marketplace. 

The figures are impressive but African ecommerce is by no means short of its challenges, either. The most pressing of these are:

·      Mistrust

·      Logistics and transportation

·      Lack of finance

·      ICT infrastructure and Africa’s digital divide

·      Digital payments 

·      Regulatory issues

·      Increase in cybercrime

·      Bureaucracy

African startups are offering innovative products and services in a bid to tackle these hurdles. 

Companies like M-Pesa (Safaricom’s mobile money platform) and Klasha are among those on the forefront of the struggle to solve payment issues. Kenya’s M-Pesa has expanded operations to several countries through integration services since it launched in 2007. It has partnered with firms like Jumia, the leading e-commerce player in Africa, to allow users in Kenya to make payments with the platform. Klasha offers a feature that allows customers to make international ecommerce payments using their local currency.

There have been efforts to address concerns over public mistrust in ecommerce. Ecommerce Forum South Africa (EFSA) has introduced the continent’s first ecommerce trustmark – a badge awarded to e-commerce platforms that are compliant with EFSA’s South African Code of Conduct checklist.

Although challenges in logistics and transportation remain a bottleneck, many African markets have adapted to facilitate efficient deliveries through motorcycles, bicycles and other easily-maneuverable means. Drone delivery is also emerging.  

In its last chapters, the report sheds light on the next steps to be taken in the cultivation of a thriving African ecommerce sector: 

·      Establish legal and regulatory frameworks through collaboration

·      Ensure a variety of payment channels are available 

·      Rapidly improve ICT infrastructure

·      Improve access to international transport and logistics

·      Broaden skill development and financing for e-commerce platforms

·      Develop cross-border e-commerce

Read the full document here.

Leave a Reply

Your email address will not be published. Required fields are marked *