Africa's e-commerce
Insight & Analysis

Africa’s E-commerce is Thriving Amid Challenges

There are two sides to taking stock of Africa’s e-commerce sector – on one side it is green and growing larger, especially as, COVID-19 hit; the next is that Africa’s growth has remained stunted due to multiple problems, including inadequate internet access and penetration, digital payment adoption, and last-mile delivery.

In the face of these challenges, some of which have improved over the years, Africa’s online retail is growing at a fast rate, with over 264 e-commerce start-ups operational in more than 23 countries across the continent and online marketplaces projected to generate 3 million jobs by 2025.

Some of the factors that have contributed to the growth of e-commerce in Africa includes the fact that the continent has the youngest and second-largest population in the world. However, the advent of social media and internet marketing, with their ultra-wide appeal to millennials and the younger generation, might turn out to be a good thing for Africa, after all. Internet penetration has been on the rise due to an influx of smartphones and mobile devices with several digital payment options becoming more widespread within the continent.

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According to Statista, as of January 2021, Southern Africa’s internet penetration reached 62 percent, highest on the continent and above the world average of 59.5 percent. Northern Africa followed with 56 percent, Western Africa with 42 percent. Eastern Africa and Central Africa recorded the lowest rates – 24 percent and 26 percent, respectively.

Although there is a surge in the number of internet users and huge adoption of online shopping, which saw an explosion when the pandemic struck. Digital buyers in Africa still prefer cash-on-delivery and mobile money payment methods. Mobile money allows customers to receive, store, and spend money using a mobile phone even without internet access. Cast-on-delivery, however, is the most common due to less trust in digital payments made in advance.

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EDITOR’S NOTE: Continue with the rest of the article on page 62 of our latest edition themed 20 Trending and Most Profitable Business Ideas in 2021. Click here to read it.

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