What does e-commerce consist of?
With the expansion of digital and internet in Africa, more and more sectors are finding themselves influenced by this trend. From mobile telephony to healthcare to banking services, the commerce sector is no exception. E-commerce or electronic commerce offers transactions for the sale and purchase of products and services on online sales sites via the Internet.
It is possible in e-commerce to target specific customers or to address a larger and more diverse customer base. In the first case, we speak of e-commerce according to the commercial profile. Transactions are business to business, business to consumer, consumer to business, consumer to consumer. In the second case, we speak of e-commerce according to the business model which depends either on the nature of the exchanges between the seller and the buyer or on the income generated. These are online stores that present their own products, platforms that offer the products of other stores, a grouping of several companies that present their products on a common website or a platform that connects suppliers and buyers. .
Some major advantages of electronic commerce
E-commerce has undergone a notorious evolution for Africa. It would be a great asset for the development and economic growth of the continent. By 2025, e-commerce could in particular create up to 3 million new jobs (Cabinet Boston Consulting Group).
In terms of revenue, in 2013, e-commerce covered around 2% of the global market with a value of $ 8 billion. In 2017, according to a report from Statista, the statistical data platform, e-commerce generated $ 16.5 billion in Africa. And by 2025, according to the study by McKinsey & Company, e-commerce could account for 10% of retail sales in Africa’s largest economies, which will amount to US $ 75 billion, for 600 million active consumers. Despite good prospects, e-commerce still faces certain obstacles, especially in Africa.
Factors blocking the emergence of e-commerce in Africa
Only 15 to 20% of the population has a bank account according to studies carried out by IPSOS and BearingPoint, on the CFAO middle classes. Bank cards (and by extension) online payment are used very little. This is also favored by the fact that banking establishments are very scarce in rural areas. They are in fact grouped around the large metropolises. In the practice of e-commerce in Africa, the most used payment method remains cash payment upon receipt of the product.
Poor internet access and the still high cost of mobile data in some countries
Overall, Africans still have low purchasing power. Household spending is on average for food, shelter, transport, health and education. The purchase of non-essential goods remains a luxury for the lower strata of the middle class, an emerging middle class as a consumer class. Although the internet is growing, it is not so accessible to everyone, which makes shopping online difficult.
The products offered come, for the most part, from Europe, Asia and elsewhere in the world. Import services are therefore in demand. The seller must face the constraints and procedures of customs and pay the associated taxes. Once the products have been introduced into the territory of destination, it is necessary to manage their storage, to rent one or more warehouses or then one or more warehouses depending on the volume of the goods.
Problems with the delivery of the order to the customer
The postal delivery system is almost non-existent or limited in Africa. The seller must then call on a company to make his deliveries, which causes additional costs. In addition, there are very few companies specializing in delivery for e-commerce platforms. Added to this is the poor condition of the road infrastructure. In some areas, the roads are not asphalted, only motorcycle couriers can access them and again depending on the volume of delivery.
The predominance of informal trade
African habits of acquiring goods and services still remain a local activity. Traditional marketplaces are still very busy, although habits have evolved considerably in recent years with the proliferation of supermarkets in the African environment (which once again seem to target a little more affluent classes). E-commerce must therefore develop adaptation strategies to this environment specific to Africa.
It is obviously essential to the visibility of products and also serves to attract audiences, convert them into customers and retain those customers. In the case of e-commerce, it is essentially digital, even if some companies have had to resort to traditional displays (case of Jumia). Poor internet access is the main source of slowdown in its establishment and deployment.
Customer confidence in the quality of the product and the reliability of the e-merchant
The photos and descriptions of the items are very attractive and attractive, but sometimes, upon delivery, the customer can very quickly be disappointed.
Thus, the main blocking factors are grouped around the method of payment, delivery and the socio-economic environment specific to the African market.
With the cessation of activity of some e-commerce leaders in countries such as Cameroon where a sometimes strong dynamic is observed around projects of this type, we can wonder if there is not also a problem of deep understanding. different environments of each country, with their specificities. To consider, probably, Africa as a whole instead of seeing each country as quite distinct, despite the similarities observable in other countries, remains a mistake to be avoided.
Leave a Reply