E-commerce Set To Take Off, Leapfrog Over Offline In Africa

E-commerce Set To Take Off, Leapfrog Over Offline In Africa

E-commerce is still in its infancy in Africa, ChicagoTribune reports.

Amazon, the world’s biggest Internet retailer, has no local operations there and only ships to South Africa, although delivery charges make it a pricey option.

E-commerce sales in South Africa – the continent’s most technologically advanced country – were just $409 million last year, or about $80 per internet user, the research firm World Wide Worx estimates.

Even Spain, which has a similar population size but is an e-commerce laggard by European standards, had online sales of $9.25 billion last year – albeit with a per capita gross domestic product almost four times that of South Africa.

But the phenomenon seems set to take off in Africa. One market research company suggests that Nigeria, Africa’s most populous country, will have almost tripled its online purchases in just three years to more than $1 billion by 2014.

Jumia is one of the companies trying to get a head start in that market, not yet profitable but spending heavily, following Amazon’s model, to grab market share and establish its brand.

The web information company Alexa, which is owned by Amazon, says Jumia is the 22nd most-visited site in Nigeria, slightly behind its local e-commerce rival Konga, ranked No. 20.

Launched 16 months ago by Rocket Internet – the German venture capital group behind the booming European online fashion retailer Zalando and South African e-seller Zando – Jumia now claims more than 150,000 page visits per day.

Black Americans Have the Highest Mortality Rates But Lowest Levels of Life Insurance
Are you prioritizing your cable entertainment bill over protecting and investing in your family?
Smart Policies are as low as $30 a month, No Medical Exam Required
Click Here to Get Smart on Protecting Your Family and Loves Ones, No Matter What Happens

It operates in Nigeria, Morocco, Ivory Coast, Egypt and Kenya, offering up to 100,000 different items from sale from its local warehouses, and plans to expand to other African countries before the year is out, although it is not yet saying where.

Jumia, a would-be African Amazon, is betting it can propel the continent’s rising middle class out of the street markets and straight onto its websites, missing out the department stores and shopping malls in between,  ChicagoTribune reports.

The key, it says, is the smartphone, already helping much of Africa’s economy brush aside the continent’s lack of reliable transport or fixed phone and Internet connections.

“Most of the people have phones, but there are only three malls for 20 million inhabitants,” Jumia’s French co-founder, Jeremy Hodara, told Reuters. “It is a unique time. People are hungry for consumption. It is the right time to leapfrog over ‘offline’.”