Visa recently reported that the top market contributors for ecommerce in Sub-Saharan Africa (SSA) over the last three years are Kenya, South Africa and Nigeria with Ghana also showing significant growth.
“The three leading markets in SSA are starting to mature, providing the region with an established foundation and when twinned with the growing penetration of ecommerce, offers players in the payment space an opportunity to capitalize while helping accelerate the expansion of ecommerce in the region,” said Lineshree Moodley, Head of Visa Consulting and Analytics, SSA.
Merchant categories driving ecommerce for Kenya indicate a strong service-based presence in the professional services sector, education, government, and B2B. Key enablers were the ability to access financial services, digital payments, and digital infrastructure.
The use of cards has increased across the continent with the highest uptick in Kenya with a strong vote of confidence for contactless payments such as e-wallet services to avoid cash as a prevention for COVID-19. Ecommerce platforms must therefore be designed with end-to-end mobility in mind with online payments offering secure and seamless omnichannel user experiences for both local and cross-border transactions.
Spurred by success stories such as Jumia, Kilimall, Konga and Takealot, ecommerce is prospering in Africa. From 2014 to 2018, the number of online shoppers increased on the continent on average by 18% annually, against a global average of 12%, according to the United Nations Conference on Trade and Development (UNCTAD).
As many as 264 ecommerce start-ups were operating across Africa in 2017 and while ecommerce is on the rise, challenges exist around ICT, logistical infrastructure, cyber-crime, low Internet penetration and digital illiteracy. Furthermore, ecommerce legislation in Africa has failed to meet digital advances as currently only 33 of 54 nations have regulations for electronic transactions and only 25 have online consumer protection laws.
Shoppable video ads on TikTok and Instagram are also creating a shift in the industry with businesses targeting younger audiences having much to gain as they can influence buying decisions through direct engagement with their audience.
For African ecommerce to rise in a world-class marketplace, more Africans need to be offered fast and reliable connectivity and the education to thrive in digital environments.