Why Africa has a Huge E-Commerce Potential


A giant shift in economic trends is happening in Africa. As the world’s second-largest continent fights off political instability, technology continues to penetrate deep within its people. More than 93% of Africans own smartphones and 6 out of 10 countries that lead in mobile banking are located on the continent.

For online entrepreneurs around the world, Africa is a continent filled with untapped markets. There are more than 1.2 billion on the continent and at least 35% of them have Internet connections at home. Sure, the continent is full of challenges. But here are reasons why the world is getting hold of Africa’s potential in the e-commerce business now.

Huge Population

Many of the largest e-commerce markets come from regions with high populations. China is the world’s largest online retail market thanks to its enormous 1.386 billion population. The US, with 318 million people, is the largest e-commerce market in North America. The UK, Japan, Germany, and France all follow closely.

Africa is the second most populous continent after Asia, meaning there is a huge market for online products. Despite the large population, many online merchants in Africa target specific countries. Only a few web-stores are available to all the 54 countries in Africa.

The presence of political instability and low Internet penetration may have something to do with retailers shying away from the continent. But it hasn’t stopped the continent from growing. In 2017, Africa’s e-commerce sector was valued at more than $32 billion. The figure is expected to grow past $50 billion in 2018 as the continent’s population continues to grow.

Empowered Millennials

Africa’s millennials make up the largest group of online buyers on the continent. In many countries, millennials are the first group to have an education through college, have a job and easy access to the Internet. Millennials have grown up in the age of technology and are helping drive the continent’s e-commerce sector up.
With Africa’s Generation Z benefiting from technology, even more, the continent is headed for greatness. Alongside Latin America, Africa’s e-retail sector is projected to grow in double digits, peaking at $75 billion by 2025. Its Southern America counterpart is prediction to grow past $110 billion.

The Mobile Money Industry

Although it may lag behind in other areas, Africa leads in utilizing mobile phones to transact. 50% of Kenyans transact online, translating to more than 20 million people. Uganda, Zimbabwe, and Botswana follow closely. Across the continent, more than 100 million people depend on mobile banking.

The huge number of people already accustomed to mobile banking can easily turn into online retail customers. They have money in their smartphones and can access the Internet on the same platforms. The only remaining bit is to market e-commerce business and personalize services to suit different demographics.
On the other hand, African startups are establishing solid partnerships with mobile banks to spur growth in the online sector. The largest mobile banking businesses are spreading all over the continent and millions more are getting connected. Within the next decade, Africa’s online retail industries will be spearheaded by mobile shopping.

Better Education and Security

Internet safety and the lack of enough information about it places a huge barrier in how Africans shop online. African governments do little to protect online shoppers, which has resulted in numerous fraudulent activities. Scam retail stores crop up every now and then but very few individuals are brought to book.
Things are changing and there is much more information about Internet safety across the continent. While cases of fraud still occur, they are reducing. Shoppers can differentiate between legitimate and scam retail stores. They are able to protect their privacy while shopping can report suspicious websites.
With improved Internet security measures across the continent, buyer confidence has been increasing. Similar to the US and Europe, African merchants have also adopted better practices that encourage safe shopping. Buyers can choose to pay on delivery or have the option to get back their money if unsatisfied by the quality of the products. That increased confidence is retail stores is boosting growth across the continent.

Growth in Urbanization

The online retail sector in Africa is concentrated in urban and suburban areas. And the more African populations move to urbanized areas, the higher the e-commerce sector will rise. So far, Africans are migrating to cities and towns in large droves.
By 2050, more than 60% of the African population will be concentrated in cities. That’s good news to the continent’s e-retail sector. Unlike in many developed countries, infrastructure in African is concentrated in the cities and towns. There are better roads and more jobs in the cities. By people moving closer to the infrastructures, it will be easier to market and deliver quality services to them.

Changing Consumer Trends

While Africans may shy away from small local web-stores, they are increasingly shopping on International websites. The number of Africans shopping on eBay, Amazon, and Aliexpress spans hundreds of thousands. Most of the retailers have made it easy to shop from any country. And Africans are taking advantage of that.

In most cases, Africans head to international retailers to find better quality products and brand name goods. The prestige of shopping on overseas sites and the availability of shopping guides are making shopping fun for all.

On comparison websites like www.bestreviews.guide , buyers can find product descriptions and their ratings on Amazon before they make any purchases. That way, they are more confident about the products and have a variety of options from top-rated items.
Of course, African retailers have embraced the changes and have brought the brand items closer home. On popular Africa-based retailers, you can find most of the brand products found on Amazon. The price differences are minimal and the customer support is improving.
With time, the African e-commerce industry is projected to double and reach $100 billion. By 2050, more Africans will be working, have ready access to the Internet and have awareness about online shopping. The industry will be mature and physical retail shops could be obscured for good.
To Conclude
There is a wave of changes happening in the African e-commerce sector. Driven by mobile banking and access to the Internet, Africans are ditching traditional shopping for Internet retail. There are more benefits to digital shopping anyway, which is why the industry is projected to grow fast.

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