Technology

The future of e-commerce in Africa and the challenges ahead

e-commerce - cfamedia

When it comes to e-commerce, the first concept that strikes one’s mind is probably online shopping and there is no way one can engage in it without the use of the internet.

As far back as the early ‘90s, Amazon was the first online retail store that allowed users to purchase, via the internet and since then, many other retail stores have followed suit.

In Africa, the e-commerce industry is seeing a significant boom in its activities, with South Africa leading the pack in terms of the number of internet penetration in the industry.

Nigeria, with its huge population and online visitors, might soon take over from South Africa. Online retailing, however, comes with its own challenges.

The level of illiteracy on the continent still remains at an alarming rate, coupled with the not so encouraging level of internet penetration.

You could imagine, trying to use the internet without the ability to read or write, let alone perform an online transaction or a situation where the broadband penetration is ineffective, with a haphazard connection.

It also comes with other obvious challenges, such as cost, delivery time, lack of option, lack of security, etc. Regardless of these challenges, the situation is not expected to go on for long.

Smartphone usage is on the rise for quick internet access and network providers are competing with one another in reducing the cost of data for their users.

The use of wallets has also made the withdrawal and transfer of cash much easier than ever.

Considering Jumia’s penetration in Africa, it has established itself as the largest online store on the continent, with tens of thousands of merchants across the continent.

The online retail marketplace has proven that the e-commerce industry can take over the market space in Africa.
The advantages that e-commerce presents include, convenience, ease of use, price and product selection and shopping experience.

As it stands, Africa’s e-commerce space has the number of potential clients, a figure close to 400 million online visitors. As long as the challenges of logistics and payment issues can get worked upon, one of the problems faced due to location can be dealt with.

Concerning payment issues, use of wallets, handling of cash and other alternative methods, can be explored for efficiency.

According to Statista, estimations show that the e-commerce industry on the African continent generated $16.5 billion total revenue in 2017, with a prediction of not less than $30 billion by the year 2022.

Though the penetration on the continent is not up to 40%, the potential growth of the e-commerce industry in Africa is positive.

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