E-commerce in Africa is at the tipping point and ready for massive growth. This is according to a recent report titled E-commerce Like Never Before conducted by Dentsu advertising agency. The report brings to light the industry’s growth with insights and trends into the African landscape.
The African Internet economy is one of the most overlooked commercial and impactful developmental opportunities of the past decade. The mobile internet is transforming life in Africa; it’s supported by growing local connectivity and mobility, and a dynamic, young urban population. With a 28.5% compound annual growth rate of the African internet population since 2000, the internet economy is becoming even more critical to reaching and supporting the continent’s 1.3 billion people. And this number will continue to grow!
Scramble to Own the Third Shelf
The population growth projected between 2020 and 2050 will rise to 87% growth in Africa. This presents brands with an extremely unique opportunity to tap into the consumer base that is already engaging. However, brands will need to examine their present strategy and adapt it for the future as the scramble to own the third shelf intensifies.
Now more than ever, brands need a guide from Industry specialists on e-commerce marred with the wisdom and potential to improve the customer experiences, increase sales, future-proof their businesses and navigate through these murky waters.
Joel Rao, CEO Dentsu Digital Brands
COVID-19 Accelerated E-commerce Growth & Adoption
2020 saw economies and businesses worldwide having to adapt to online services due to difficult all the conditions that were arising. This was probably the much needed nudge for the African enterprises to venture into e-commerce. With access to physical retail restricted partially or entirely, businesses and consumers had no other option but to explore online channels that quite probably pushed years of e-commerce penetration in a single quarter.
However, despite this growth, the next step for many businesses is to provide commercial fulfilment and retain customer/consumer relationship to ensure proper e-commerce utilization. The aforementioned report highlights how retailers and companies should not only focus on the growth of technology but also how to use the existing technology for consumer good and to solve consumer need. A much better question for brands to ponder therefore is; How do you maintain personalized relation to the consumer while offering value at the same time?
Breaking Down the “TRUST Barrier”
The report further looks at the evolution of the democratization of e-commerce and how brick & mortar businesses are merging through different online platforms as well as social media channels. To make this uptake successful, Dentsu opines that four pillars underpin the success of e-commerce in Africa: convenience, relevance, value and TRUST. Trust between consumers and suppliers is often a bigger issue online than it is offline since online, there is a limit to both physical interaction with the product and the opportunity to test them out. However, Dawn Rolands CEO Dentsu SSA is quick to note that the trust barrier is slowly coming down.
Growing needs for convinience and safety have been the mother of Invention and have helped us to overcome the “trust barrier”
Dawn Rolands, Dentsu, SSA
Previously, Dentsu has ventured into publishing report mainly focusing on e-commerce growth globally. But with the recent boom in technology penetration, innovative startup community, and market demand for e-commerce, this report comes at an opportune time when the potential for the African market growth is at its peak.
How much do people actually spend on e-commerce?
China and the USA dominate the e-commerce Industry worldwide, with China averaging Annual online sales of $ 672B while the latter averages $340B. In Africa, South Africa, Ghana, Egypt, and Nigeria, they are topping the list about the average amount of money spent on e-commerce.
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