Empowering ecommerce in emerging markets
by Mike Bhaskaran. Africa’s digital economy is set to exceed $712 billion by 2050, and the continent is poised to become the world’s next big retail destination for buyers and sellers from across the globe.
by Mike Bhaskaran. As a continent, the ecommerce market revenue for Africa grew by 52.7% between 2019 and 2020 – and is set to surpass half a billion ecommerce users by 2025 according to the International Trade Administration. Online retail has boomed in the last two years, triggered by the pandemic which drove consumers to buy their goods on the internet. While this presented a major challenge for bricks-and-mortar retailers, it created a lucrative opportunity for online vendors and ecommerce platforms.
Meta most recently jumped on this trend, partnering with JioMart to improve consumer access to food and goods in India – allowing them to make purchases within WhatsApp, a platform used by over 100 million users in the country. With growing internet adoption, increased incomes, and new cross-border ecommerce markets appearing, we’ve seen the African market continue to grow and adopt ecommerce year after year.
The next big opportunity
Africa’s digital economy is set to exceed $712 billion by 2050, according to a recent report from Endeavor Nigeria projects. Due to several factors, including its young population and high rates of smartphone and mobile web adoption, the continent is poised to become the world’s next big retail destination for buyers and sellers from across the globe. As a result, ecommerce platforms such as DUBUY.com are looking at the continent as their next big opportunity. This growth is good news for consumers, who will benefit from greater choice and ways to purchase, as well as African businesses that saw a 30% increase in their online sales volume during the pandemic.
Already, DUBUY.com has launched across various countries within Africa, including Rwanda and Kenya, enabling small businesses to source and sell products to a wider global customer base. This growth has happened rapidly, with recent launches in Tunisia, Ghana and Zambia yielding more than 4,000 active merchants within months after launch.
Connecting emerging SMEs to global customers
By 2025, Africa’s online shopping community is expected to grow by 56%, and the companies that are ready to serve these customers with the right products, services and operations will be best positioned against competitors. However, there are barriers to overcome as ecommerce continues to connect African customers and SMEs across the globe.
A survey recently conducted in South Africa found that 64% of consumers don’t feel safe when it comes to online shopping; and assurance is needed that online merchants can be trusted, that they can offer secure transactions, and they’ll keep people’s data safe. Providers are tackling these obstacles head-on, while transactional data remains hidden and protected. With ecommerce processes involving many buyers and sellers exchanging money across country borders, cybersecurity is proving an essential part of any online platform.
While trust is a significant factor to overcome, emerging markets have much to gain from ecommerce. By working with credible platforms, businesses can find other vendors to enable their operations. For example, Rwandan Coffee recently worked with DUBUY.com to identify a credible packaging specialist so they could ship goods commercially.
Investment within the continent
A Nigerian economist predicted that with the right processes in place, and support for SMEs, e-commerce could generate up to 23 million jobs in the country alone. It’s clear that there’s a strong desire and benefit for these platforms, however, their success will largely depend on government legislation and community support. For now, the more customers and businesses that can support ecommerce platforms, the better. New markets will bring new products, and new products will increase spending, generate more revenue at community level, and attract new opportunities and investment to the continent.
Main image credit: Supplied.
Mike Bhaskaran is Group COO of Digital Technology at DP World.
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