Embracing e-commerce to grow trade in Uganda

by Chris Nyaga. Data from Statista indicates that the e-commerce market in Uganda is projected to reach over USD 413 million in 2022. The data further revealed the market is set to grow by over 15 million users by 2025. These statistics paint a very promising future.

The online marketplace has opened trade to endless opportunities. Developing countries are increasingly seizing the benefits of online trade to grow businesses; and the potential to drive economic growth is visible. e-Commerce has created massive opportunities, opened markets, enhanced competitiveness and created efficiency in the delivery of goods and services in Africa.

Uganda is no different and e-commerce is growing fast. Continued investment in the sector has enabled small and medium enterprises, as well as large established businesses to now leverage its benefits.

This rapid growth has been attributed to the growing  internet and smartphone penetration; as well as mobile money usage in the country. This has increased e-commerce adoption and online payments, boosting the trade today.

Despite the steady growth of e-commerce, there are still a number of challenges that stand in the way of its efficiency. Logistics is one of them. Notwithstanding its significance in trade, logistics in Africa is fragmented; expensive; and more often than not, very unreliable. This has for the longest time inhibited proper trade, especially in e-commerce. The effect of this has led to longer delivery times and higher cost of goods. This should not be the case. The success of e-commerce is heavily hinged on effective logistics.

It’s been argued that the logistics sector has been slow to embrace total digital transformation compared to other industries.  The Covid pandemic welcomed an increase in e-commerce adoption and decrease in offline trade in Uganda and across the continent. This meant that the traditional supply chain practices and logistics had to change. In order to scale up operations, it was time to innovate.

A time for innovation

Luckily, technology is now helping to solve such challenges. It is rapidly developing and shaping a strong digital ecosystem therefore creating greater efficiencies to boost logistics and e-commerce. Embracing technology is also helping to increase productivity in the supply chain thus reducing the operational cost of doing business. This has continued to develop the capacity of businesses to grow and e-commerce to thrive.

In order to fulfill this course, a number of tech solutions are being designed to answer various consumer pain points. This digitisation is eliminating fragmentation, simplifying logistics and boosting trade

For e-commerce to thrive, innovation is inevitable. Sendy is a tech company that builds a fulfillment infrastructure for e-commerce and consumer brands, and is working with businesses in Uganda, Kenya, Nigeria and Cote d’Ivoire. The company is building easy tech solutions that enable businesses to sell their products; move their goods; and get financing to grow their businesses.

Leveraging technology to build an efficient and sustainable e-commerce system will help to democratise logistics and spur trade and development. Developing a viable e-commerce ecosystem for businesses will require the contribution of all stakeholders, governments, tech companies, payment service providers, warehouse owners, logistics service providers, trade associations among others.

The digital revolution is disrupting trade. The opportunities in e-commerce are immense. Technology has streamlined a lot of processes and created efficiencies that businesses can today use to grow and thrive. We need to fully embrace and integrate e-commerce in order to support trade in Uganda and across the continent.

Main image credit: Supplied.

Chris Nyaga is the General Manager of Sendy Uganda.

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