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How Important Is Social Commerce In African Business Model?
Social commerce refers to the use of social media platforms like Instagram, Facebook and Twitter to sell products and services. The concept of social commerce first began in November 2005 when consumer marketing promotions first appeared on Yahoo. Since then, social commerce has been present for meeting the needs of online shoppers. Since social media marketing became popular, social commerce grew with it across the globe including Africa. A study by Caribou Data and the Partnership for Finance indicated that 92% of small and medium enterprises in Kenya use social commerce for running their business to reach a large audience.
How Social Commerce Has Proved To Be Beneficial For Africa?
Social commerce blurs the line that exists between online shopping and social interaction. It is particularly useful for small companies to formalise their business and run it. Currently, Africa is seeing a boom in eCommerce markets and therefore, social commerce has become so important for the continent. It is particularly beneficial for underserved merchants and customers. It is because it provides a way for small businesses to mark their online process without spending a fortune and another complex process. For anyone starting an online business, social commerce has proven to be the easiest way to reach customers. For instance, many small business owners prefer to showcase their products in their WhatsApp Status and put the brand logo as their Whatsapp Dp while running an online business on WhatsApp. This aspect of social commerce has particularly benefited many African countries.
African Businesses Are Accepting Social Commerce
With improved internet connectivity in the African countries, the region has established itself as a potential hub for e-commerce and hence, social commerce has become important in Africa. The United Nations Conference on Trade and Development has reported that from 2014 to 2018, Africa saw a huge growth in online shopping. The increase of online shoppers has grown on average by 18% annually against the global average of 12% indicating that not only the business owners but the customers are also embracing e-commerce and social commerce in the region. The Covid pandemic also acted as a catalyst for this growth.
With a penetration rate of 45% in 2019, social media platforms have become an indispensable tool for many businesses. As a result of improved internet connectivity and social media penetration, the e-Commerce scenario is improving globally, particularly in the Middle East and Africa. Social commerce is an important tool that not only helps the small merchants to formalise the business but also helps them to manage them well. Social commerce that acts as a branch of e-Commerce contributes hugely to online commerce activities that take place in African countries.
Social commerce is popular in Africa because one does not need sophisticated tech knowledge to engage in social commerce. This makes it easier for everyone to engage in social commerce to run their business. Further, most of the sales that take place in different African countries are carried out using informal channels. This issue is addressed by social commerce for most businesses.
Obstacles Of Social Commerce
The key driver of social commerce in Africa is mobile technology. It is because most African citizens use smartphones to access the internet and the social commerce transactions take place in a similar way. This is the reason why the largest obstacle to social commerce is the low connectivity of the mobile internet. During the recent outage of WhatsApp, Instagram and Facebook, almost all the social businesses of Africa faced the wrath of heavy dependency on the internet. Many small businesses from all over the globe who had their presence marked only in these social media platforms faced temporary shutdown. The recent outage however also forced many businesses to consider other social media platforms to survive from future problems if the outage takes place again. This is much-required advancement in social commerce to ensure that the business owners are not caught off-guard.
It is therefore advised that in addition to employing social commerce for running a business, it is important to have their own eCommerce store to survive in the coming years. Social media should be used as touch points but not the main arena of business. It is recently noted that once a certain number of sales are done, many businesses while still employing social commerce prefer to have their own website and e-store to look more sophisticated and formal.