Africa’s Ecommerce Potential

According to a new report by GSMA (the global association for cellphones) and the UN Economic Commission for Africa (UNECA), ecommerce in Central Africa lags behind other regions but can progress quickly if governments implement policies to hasten the development of digital and ecommerce services. The report identifies areas where action is required to increase access to digital services in general. In the Economic Community of Central African States (ECCAS), a body of 11 countries, mobile subscriber penetration rose from 18% in 2000 to 42% by the end of 2019 and is set to reach 46% by 2025. The number of mobile internet users was 52 million in 2020 and is expected to reach 86 million by 2025.

The potential for ecommerce was stressed in report released last year by the International Trade Centre (ITC – a UN body), which found that 10 countries were responsible for 94% of all online business in Africa in 2019. The paper, which this Newsletter reported on previously, offered insights to policymakers and entrepreneurs alike. Based on data and analysis available in ITC’s ‘Africa Marketplace Explorer’, an online analytical tool available to all, the research was supplemented by data on Africa’s ecommerce ecosystem and case studies of the largest African marketplaces. The report contained a study by the University of Amsterdam (The Netherlands) of African online marketplaces, which claims that these e-marketplaces or e-platforms serve a new generation of consumers and open opportunities for small entrepreneurs. But apart from the Amsterdam study little is known about these marketplaces in Africa: where they are growing, where they are struggling and why.

South Africa according to the study had 106 e-marketplaces in 2019. Ecommerce businesses in the continent mainly engage in the business-to-business (B2B) and business-to-consumer (B2C) models. EFA questions these findings and believes that African ecommerce is provided by a much more sophisticated mix of stand-alone e-shops (often supported by Woo Commerce, Shopify, etc); online sales on social media as well as the use of e-platforms. The problem is that the data simply isn’t being collected and that, because collecting such data across the continent would be prohibitively expensive, small studies of the sort done by ITC just provide mini-snapshots of the full picture which over-simplify the issues.