Business
5 reasons why Africa is ripe for e-commerce growth
3. Growing Buying power of Middle Class
While Nigeria leads the pack in terms of countries witnessing high economic growth, closely followed by South Africa, even lesser known countries like Morocco, Senegal, Kenya and Mozambique are making their presence felt on the economic map of Africa.
The rapidly growing middle class in these countries has more spending power and wants better products and services with shorter delivery periods. They see e-commerce as a great way of satisfying their needs and requirements in this regard. Hence Africa is witnessing a surge in online shopping.
The Central Bank of Nigeria is encouraging people to adopt the cashless route while making purchases. The aim is to reduce cash-based transactions and e-commerce is playing a big role here. The growth of the African middle class and its subsequent impact is being felt across Africa. With the growing middle class seeking better shopping experience and price control, the stage is set for big players and startups to improve their services and tap the huge opportunity that lies in the e-commerce sector in Africa.
4. Overcomes the problem of Physical Store Accessibility
E-commerce offers a fantastic opportunity to people living in far-flung areas or regions where physical access to a good brick and mortar store is a big challenge. In this scenario, domestic and international e-commerce websites offer to deliver high quality local and international products, to the doorsteps of consumers. This is another huge benefit that is fueling the growth of e-commerce in Africa.
Consumers are quickly realizing that they have access to the best products and services online. They do not have to live with the fact that there is no good brick and mortar store in their neighborhood that is selling the kind of products they want. They can go the online route to buy these products.
5. People with Deep pockets are Investing in Africa
The African growth story has caught the imagination of big players in the world of internet and e-commerce. According to AT Kearny’s 2014 African retail development index, sub-Saharan Africa, with over one billion people has one of the fastest urbanization rates and mobile adoption rates in the world.
As a result, e-commerce giants like Kaymu and Jumia have opened shop, funded by the deep pockets of Africa Internet Group (AIG). Recently Jumia announced a fresh round of investments worth US$150 million.
It is predicted that the e-commerce market in Africa will grow to US$75 billion – according to a report by the McKinsey Global Institute.
Source: Africa News Wire
