GSMA Points to the Importance of Social Commerce in Africa

Africa has several retail e-platforms which can handle logistics and simplify payment, but those are not very popular, finds a recent survey by the GSMA, the association of mobile-phone operators. The GSMA report tracked small businesses trading online in 6 African countries. In Ghana and Ethiopia, 75% of respondents sell exclusively through social media; only in SA do a majority use online marketplaces. Many entrepreneurs start with WhatsApp, where they create chat groups advertising their wares to friends. They often start by using the status bar to promote new products or their contacts list to keep track of customer preferences. As business grows, they find a wider audience on Tik Tok, Facebook, YouTube or Instagram. A trusted motorbike driver might deliver goods.

Payment is sometimes done through a bank transfer or mobile money, although cash-on-delivery is the most popular choice. One reason to do it yourself is that it is free. Online marketplaces charge commission, typically around 5-20% of the sale price according to the Report. https://www.gsma.com/mobilefordevelopment/resources/e-commerce-in-africa-unleashing-the-opportunity-for-msmes/#:~:text=There%20is%20significant%20evidence%20that,increase%20their%20profitability%20and%20resilience.