Africa’s E-Commerce Market Growing At Record Pace, Though Most Countries Are Not Ready To Handle It

Written by Peter Pedroncelli

Africa’s e-commerce market is showing record growth, but most countries in Africa are considered unprepared for the growth of this online trend.

Around 21 million online shoppers in Africa helped drive a market valued at $5.7 billion in sales during 2017, according to a report from the United Nations Conference on Trade and Development.

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The e-commerce market in Africa has grown 18 percent since 2014, beating the global average by 6 percent.

By 2025, the African e-commerce market is projected to be worth around $75 billion in leading economies, from just $8 billion in 2013, according to the McKinsey Global Institute.

Kenya, Nigeria and South Africa are the countries that account for almost half of the e-commerce market in Africa, as these are the most developed markets with market-leading e-commerce players such as Takealot in South Africa, and Jumia in Nigeria standing out popular sites that online shoppers in those countries use.

Yet, despite the continent growing at an unprecedented pace in terms of e-commerce adoption, Africa is home to nine out of the 10 countries least ready for e-commerce, according to the United Nations Conference on Trade and Development report.

E-commerce readiness is defined as the preparedness of a country, region or entity to utilize information and communication technologies for sustaining welfare and growth in online commerce, according to IGI Global.

e-commerce market
Africa’s e-commerce market is growing at a record pace. Photo by rawpixel on Unsplash

The report shows that Africa lags behind the rest of the world in terms of e-commerce readiness, with Mauritius, ranked 55th globally, considered the most prepared African nation with regards to e-commerce.

Despite that concerning stat, since 2014, sub-Saharan Africa has surpassed world growth on three of the indicators used in the index, with account ownership up 83 percent versus 35 percent global growth, and internet use up 136 percent compared to 47 percent world growth.

Africa has also seen 45 percent growth in secure internet servers versus a 2 percent growth globally, the report reveals.

After Mauritius as the most prepared African country, the top five is made up of Nigeria, South Africa, Tunisia and Morocco, in that order.

Ghana, Kenya, Uganda, Botswana and Cameroon round out the top 10 in the index, which took into account 44 African countries. All 10 of the best ranked African nations appeared in the top 101 globally.

The e-commerce potential throughout Africa is huge, but a number of common barriers which fall into the categories of financial, infrastructure, socio-political and digital divide, remain a challenge for this industry, especially with regards to international growth.

By understanding the obstacles and embracing the challenge ahead, changes and innovative thinking can help Africa’s e-commerce sector to reach the next level and continue to grow.