Africans are gradually embracing the convenience of online shopping, but the trend is still in its infancy in Africa compared to more established markets such as Asia, Europe and the United States.
By 2025, e-commerce could account for 10% of total retail sales in Africa's largest economies: Nigeria, South Africa and Egypt, according to a forecast by the McKinsey Global Institute.
Experts say that while Africa has great potential for e-commerce, it faces challenges related to cultural and logistical factors. These considerations are crucial when customizing products and services to suit local tastes.
Who are the leading e-commerce companies in Africa?
Africa's largest online marketplace is marketplace company Jumia with 23 million monthly visits, followed by online shopping platform Takealot.com with 10 million monthly visits, 96% of which are from its home country of South Africa.
Souq.com, a Middle Eastern company acquired by Amazon in 2017, has around 10 million monthly visitors, most of them from Egypt, while in South Africa, fashion and lifestyle retailer SHEIN is the most popular shopping app.
Vinod Goel, Jumia's CEO for East Africa, told DW that the online market in Africa is still in its early stages.
“We can see what's happening in markets where e-commerce is very mature, like China, for example,” Goel told DW.
“Southeast Asia, India, Europe and the US – e-commerce is already a big part of those markets and we see the same happening in Africa,” he said, adding that the industry is entering an “interesting window of opportunity where those barriers are disappearing.”
Listed on the New York Stock Exchange, Jumia draws sales from countries including Nigeria, Egypt, Morocco, Kenya and South Africa.
Attract new shoppers with social media
According to Statista, internet penetration is growing in Africa, with the number of internet users expected to reach approximately 570 million by 2022, more than double the number in 2015.
Nigeria, being the most populous country in Africa, has the largest number of users, which is contributing to the rise in online shopping.
Olisa Chukwuma, a DW correspondent based in the Nigerian capital, Lagos, said social media has become a decentralized tool for finding and contacting customers directly through platforms such as Instagram.
“You can appeal to customers with your pictures, you can appeal to customers with the quality of the products you are offering, you can appeal to customers with your pricing so they can actually get in touch with you directly,” he said, adding that the penetration of the internet has been a big driver for this online shopping industry, especially in Nigeria.
Challenges to the growth of online shopping
For e-commerce to flourish on the African continent, there are several barriers that need to be addressed.
Several Nigerians DW spoke to noted that reliable and efficient delivery service is crucial to customer satisfaction.
“Sometimes a product is advertised, you order it, but what you receive is not worth what you paid,” one Nigerian said.
Another Nigerian noted that customer service is a widespread problem in Nigeria.
“For some vendors, it is still difficult to manage customers' emotions as long as they have received the money and the customer has paid. Sometimes they don't even answer the phone,” she told DW.
DW correspondent Chukwuma echoed these challenges, adding that being scammed when buying online remains a problem.
“Nigeria is a country where your timeline is bombarded with accusations, your comment section is bombarded with accusations, the authorities are out to get you, so they are going to get you,” he said.
Amazon enters South Africa
Amazon launched its operations in South Africa last month, as the e-commerce giant enters a sector largely dominated by local e-commerce players such as Take-a-Lot and a host of early-stage online retailers hoping to grow.
Online retailer Paula Maseko said small businesses like hers could be at a disadvantage if Amazon came to South Africa because “they have more resources than us and will probably charge lower prices than us”.
Maseko was optimistic and said his business, like many others, would need to change and adapt to survive.
Contributions by Isaac Kaledzi, Eddy Micah Jr, and Olisa Chukwumah.
Editor: Keith Walker
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