African E-Commerce Retailers Say It’s Not So Much About The Competition

African E-Commerce Retailers Say It’s Not So Much About The Competition

From SaudiGazette.

E-commerce is growing fast in sub-Saharan Africa’s sturdier economies and fastest of all in South Africa, where retail resembles that of South East Asian countries with its more developed e-commerce sector, experts said.

But the potential in countries such as Kenya, Uganda, Nigeria, Ghana, Ivory Coast and Senegal is such that online retailers say their main aim is not to beat their competitors so much as to grab a bigger slice of the overall retail market.

The Internet’s contribution to Africa’s gross domestic  product stood at 1.1 percent in 2013, much lower than other emerging markets.

But this could rise to 10 percent, or $300 billion, by 2025, according to a report by consultants McKinsey’s  & Company.

Even in South Africa, the market leader, online retail sales are less than 1 percent of total sales, said Arthur Goldstuck of market research firm World Wide Worx.

In 2014, hedge fund Tiger Global invested $100 million in South African online shopping company Takealot.

The German firm Rocket Internet also ploughed 120 million euro in Nigeria-based online retailer Jumia in November.

Rocket, emerging markets telecoms group Millicom and MTN own Africa Internet Group (AIG), an e-commerce company that operates in 27 countries and has firms that include Jumia and Lamudi, a site to trade real estate.

The newness of the sector creates a scramble for dominance and consumer choice. If a customer wants to trade second hand goods then OLX, owned by South African media and technology giant Naspers, provides an service online.

If it is Western goods, then Mall of Africa facilitates that online in Nigeria as does e-commerce store Konga.

Read more at  SaudiGazette.