Despite poor logistics, low banking penetration and limited consumer awareness in rural Africa, online shopping markets in Africa are growing due to the spread of mobile technology and improved payment delivery infrastructure, according to a report in Fibre2Fashion.
South Africa is the regional leader in Africa’s business-to-consumer e-commerce — the online sale of goods and services directly to consumers.
However, other countries with high potential might overtake it, according to the report. Egypt, Morocco, Nigeria and Kenya follow South Africa in online shopping penetration but some of them lead in terms of Internet penetration and mobile use.
More than 10 percent of active Internet users in Africa shopped on mobile in 2013. In mobile shopper penetration, Nigeria, Egypt and Morocco are ahead of South Africa.
Secondary market research publisher yStats.com released findings in its Africa B2C E-Commerce Report – 2013.
“E-Commerce has a high potential in Africa as the growing middle class seeks
more convenient shopping and better price quality, driving local and international Internet merchants to operate in the region,” said yStats.com CEO Yücel Yelken.
Several strong local players have emerged such as South Africa’s online fashion retailer Zando and Nigeria’s online mass merchants Jumia and Konga.
B2C (business-to-consumer) e-commerce sales were less than 1 billion euros in 2012, but annual growth of around 40 percent is forecast for the next 10 years. The main obstacles to overcome are poor logistics in rural areas, low banking penetration and limited consumer awareness, the report said.
On a continent where mobile phones are more widespread than computers, a significant proportion of the population has no banking relationship and the most common type of Internet access is through a mobile device.
Business-to-consumer e-commerce sales in South Africa are expected to grow by 25 percent in 2013. The number of active Internet users in South Africa grows at small double-digit growth rates, with mobile being the leading type of connection.
Local online retailers, auctions websites and international sites are among the prominent players on the South African e-commerce market. The market leader is online merchant Kalahari.
The most-purchased product categories are event and travel tickets, books, hotel reservations, videos and music.
About half the Egyptian population has access to the Internet but only a small percentage shops online, according to the report. As Internet and mobile increase in Egypt, the potential for online shopping is expected to be enhanced.
Mass merchants Souq.com and Jumia.com were the leading e-commerce websites in Egypt by audience reach in 2012, followed by international players Alibaba and Amazon. The leading product categories for online purchases in Egypt in 2012 were movies and music, tickets and reservations, clothes, shoes and accessories.
In Morocco, business-to-consumer e-commerce sales in the first three quarter of 2013 have already passed the transaction total for 2012. The number of online shoppers exceeded 300,000 in 2012. Business-to-consumer e-commerce transactions with bank cards grew by a more than a half year-on-year in 2012, reaching more than 50 million euros.
Due to its large population and fast growing Internet penetration, Nigeria has the potential to become one of the leaders in business-to-consumer e-commerce in Africa. The lack of supply in brick-and-mortar retail also drives demand for online outlets.
Online shopping sales in Nigeria grew by a high double-digit rate in 2012, reaching less than 20 million euros. Around a quarter of urban Internet users shopped online in 2012.
In Kenya, business-to-consumer e-commerce is driven by a surging mobile Internet penetration and popularity of mobile payments. The number of Internet users reached almost 20 million in June, accounting for half of the population, while
online shopping reached less than 20 percent of Kenyans, even in urban areas.
Tunisia has one of the highest Internet penetration rates in Africa — almost 40 percent. There were more than 500 active e-commerce platforms in September. The most-purchased product categories were consumer electronics, travel, and clothing and accessories.
The pace of growth is slower in some other African nations, yStats.com reports. E-commerce is emerging in Algeria with several players launching online shops and regulators taking notice.
Internet penetration is low in Ethiopia due to a telecommunications monopoly and the resulting low accessibility of ICT services. A one-digit share of Ethiopians with Internet access shop online.
Internet subscribers are growing steadily in Senegal, reaching more than 1 million in 2013. Four percent of urban Senegalese Internet users bought products or services online.
In Uganda, m-commerce has a high potential due to popularity of mobile Internet and payment.
In Zimbabwe, launch of a nationwide online payment system in September is expected to have a positive effect on e-commerce as is the growing Internet penetration.
