Skip to content

EFSA - Protecting your rights as an ecommerce business and expressing your needs to the relevant government departments and opinion formers

Ecommerce Growth under COVID – SA, Nigeria and Kenya

UNCTAD reported recently that global ecommerce sales have increased to $26.7 trillion. In Africa, multiple factors have combined to bring some countries to an ecommerce adoption tipping point, creating more opportunities than ever for online and omnichannel merchants. This is particularly true for merchants in fashion, beauty, education, and digital goods. This evolution has seen the emergence of more digitally savvy shoppers with strong demand for globally sourced goods and services in regions where parts of the population have access to increasing disposable income. These factors make Nigeria, Kenya, and South Africa particularly interesting for emerging ecommerce leaders from outside these markets. These are the key findings in a report published by PayU, the fintech and e-payments business of Prosus.

The report, “The Next Frontier: the most promising markets for emerging e-commerce leaders in 2021 and beyond”,  highlights unprecedented consumer spending growth in 19 ecommerce in high-growth markets that have often been overlooked before 2020 in favor of the Western markets. The report looks at SA, Kenya, and Nigeria in Africa. Among those countries, SA has the highest internet penetration at 56%, with Nigeria and Kenya at 46% and 31% respectively. However, ecommerce penetration is at 37% in both Nigeria and SA, and at 25% in Kenya. This highlights significant potential for growth in ecommerce in these markets. The data reveals that Nigeria is by far the largest ecommerce market on the African continent in terms of the number of shoppers and revenue, with predicted consumer spend for 2021 at $811m, spend in SA is estimated to reach $336m and Kenya $70m. Apart from the usual products – fashion, cosmetics and beauty online spend on digital goods in SA is projected to grow by 46% between 2019 and the end of 2021, reaching $336m in total spend. This has been bolstered significantly by strong growth of 69% in 2020, with people consuming more digital media while spending time at home. In Nigeria, this sector is expected to grow to $811m by the end of 2021, and to $70m in Kenya – it’s a 94% increase on both markets comparing to 2019 results. And online spend on education boomed across SA in 2020 as people sought to upskill themselves during a prolonged time at home. PayU data shows a year-on-year increase in spending of 67% in 2020, with the average transaction value growing by $136 to $404. The majority of the growth was in Q3 2020, when spending rose by 134%.

Source PayU

Meanwhile, Amazon has announced that it will be opening its first African store in Cape Town later this year. Amazon has, of course, been available in Africa as a third-party seller on Takealot, Jumia, MallforAfrica, etc, but this will be the first time it has established a physical presence on the continent.

Posted in

Alastair Tempest

Leave a Comment

You must be logged in to post a comment.

Become a member

Join the Ecommerce Forum South Africa and benefit from industry insights in South Africa and Africa.

Sign up to newsletter

Sign up to our newsletter and stay informed of the progress we are making at the Ecommerce Forum South Africa with government during Coronavirus.