Last november 2014 was published in the magazine Ventures Africa anarticle about electronic commerce which I found pretty interesting to reproduce here below because it is a business activity in evolution that must be remarked.
Africa
offers enormous potential for e-commerce growth given that online
shopping
is in its infancy in the region, notes Sumesh Rahavendra, head of marketing for
DHL Express Sub Saharan Africa (SSA).
is in its infancy in the region, notes Sumesh Rahavendra, head of marketing for
DHL Express Sub Saharan Africa (SSA).
“Although
global e-retailer Amazon celebrated its 20th anniversary in July,
eCommerce companies in Africa are only now beginning to mark and / or
accelerate their presence in the marketplace. An example is Nigeria online
retailer, Jumia, which despite being founded only two years ago, is quickly
gaining market share within the country which reiterates the region’s potential,” said Rahavendra.
eCommerce companies in Africa are only now beginning to mark and / or
accelerate their presence in the marketplace. An example is Nigeria online
retailer, Jumia, which despite being founded only two years ago, is quickly
gaining market share within the country which reiterates the region’s potential,” said Rahavendra.
A
recent report by McKinsey & Company also revealed that, eCommerce
could
account for 10 percent of retail sales in the African continent’s largest economies
by 2025.
account for 10 percent of retail sales in the African continent’s largest economies
by 2025.
To
further support his point that e-commerce in Africa was still in its
infancy,
Rahavendra cited a survey conducted in Nigeria, the continent’s largest economy,
which revealed that close to a quarter of respondents (23.55 percent) cited
the lack of security as the largest obstacle for buying products online. 38.81 percent
of respondents also picked cash, compared to 29.52 percent who chose credit cards,
as the payment mechanism they would prefer to use when purchasing goods and
services online. “This highlights that consumers on the continent are still familiarizing themselves with the online payment methods,” he adds.
Rahavendra cited a survey conducted in Nigeria, the continent’s largest economy,
which revealed that close to a quarter of respondents (23.55 percent) cited
the lack of security as the largest obstacle for buying products online. 38.81 percent
of respondents also picked cash, compared to 29.52 percent who chose credit cards,
as the payment mechanism they would prefer to use when purchasing goods and
services online. “This highlights that consumers on the continent are still familiarizing themselves with the online payment methods,” he adds.
The DHL Express head of marketing however said advancement of technology will
foster e-commerce growth in Africa.
foster e-commerce growth in Africa.
With
mobile penetration in Africa standing at 80 percent, there have been
more consumers than ever before, who are interested in e-commerce via
their mobile phones. The 2014 Mobile Media Consumption report by InMobi,
which includes data from 14,000 users across 14 countries, including
Nigeria, Kenya and South Africa, predicted that 83 percent of consumers
plan to conduct mobile commerce in the next 12 months, up 15 percent
from the current figure.
In
Kenya, which has been Africa’s leader in internet usage growth, the
Communication Commission of Kenya reports that internet users grew from
200,000 in 2000 to over 19.6 million at the end of last year, a
staggering 9,700 percent growth, according to a UN report. Figures like
this are indicative of what the future holds for e-commerce in Africa.
“As
technology continues to evolve in the respective African countries, as
will the levels of online shopping,” Rahavendra enthused.
“It
is of our opinion that many African businesses will start to skip the
traditional ‘bricks and mortar’ formal retail environment, and instead
move straight into online shopping space due to the rise in mobile and
internet services within Africa,” he concludes.
