Online shopping is growing rapidly across Africa, with the digital market expected to grow to US$75 billion by 2025.
Big companies like Amazon are eager to cash in, but how can the African continent unlock its e-commerce potential?
Africans are gradually embracing the convenience of online shopping.
However, the trend is still in its infancy in Africa compared to more established markets such as Asia, Europe and the US.
McKinsey Global Institute predicts that by 2025, e-commerce could account for 10% of total retail sales in Africa's largest economies: Nigeria, South Africa and Egypt.
Experts say the e-commerce sector has huge potential in Africa but faces challenges related to cultural and logistical factors.
These considerations are crucial when customizing your products and services to local preferences.
Key African players
Africa's largest online marketplace is Jumia, an e-commerce company that receives 23 million visits per month.
It is followed by online shopping platform Takealot.com, with 10 million monthly visitors, 96% of whom are from South Africa, where the company is based.
Souq.com, a Middle Eastern company that Amazon acquired in 2017, gets about 10 million visits a month, mostly from Egypt.
Meanwhile, 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.
“You can also look at what’s happening in markets where e-commerce is very mature, e.g. [in] “China,” Goel told DW.
“E-commerce is already a big part of markets like Southeast Asia, India, Europe and the US and we see the same happening in Africa,” he said, adding that the industry was entering an “interesting and buoyant phase where 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
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 since 2015.
Nigeria, being the most populous country in Africa, has the largest number of users, which is contributing to the rise of 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 like 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 in terms of the online shopping industry, especially in Nigeria.
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.
“They advertise a product, you order it and what you get is not worth what you paid for,” one Nigerian said.
Another Nigerian noted that customer service is a widespread problem in Nigeria.
“So for some vendors, it's still difficult to manage their customers' emotions, as long as they receive the money and the customer has paid them. Sometimes they don't even answer their calls,” she told DW.
DW correspondent Olisa Chukwuma echoed these challenges, adding that being scammed when buying online remains an issue.
“Nigeria is the kind of country where your timeline will be flooded with accusations, your comment section will be flooded with accusations, the authorities will come and get you, and they will get you,” he said.
Amazon Set
African Feet
Amazon launched its operations in South Africa last month, as the e-commerce giant enters a sector dominated mainly by local e-commerce companies such as Take-a-Lot and a number of early-stage online retailers hoping to grow.
Online retailer Paula Maseko said Amazon's presence in South Africa could put small businesses like hers at a disadvantage because “Amazon has more resources than us and will probably charge us lower prices.”
Maseko remains optimistic and says his business, like many others, will need to change and adapt to survive.
– DW, Isaac Kaledzi, Eddy Micah Jr, and Olisa Chukwumah contributed; Edited by Keith Walker.
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