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South African Countries See Rise In Retail Spending On Mobile Apps

Visa Consulting and Analytics recently reported that e-commerce in the Sub-Saharan African region has been seeing an eCommerce boom in the last three years. The growth has been significant especially in Kenya, Nigeria and South Africa. As a result of the penetration of the internet in these regions, e-commerce is booming like never before in the region. This has reportedly made this region a hub for many companies to use the region as an opportunity to capitalize on their products which further will result in the expansion of eCommerce in the African region. 

COVID-19 Restrictions Acted Like A Catalyst

In order to prevent the spreading of the virus, many countries from across the globe enforced lockdown including African countries. When many retail shops were shut down, eCommerce platforms saw high importance to keep the market running. In addition to that, digital commerce was widely accepted as mobile apps became of prime importance. Covid pandemic acted as a catalyst for the world to embrace digital commerce quickly and the impact of the same was visible in consumer behaviors too. 

African Mobile Market Apps Is Showing A Growth

After the Covid pandemic lockdown was over, a study indicated that there is a positive strong growth of the mobile app market in Africa and many Africans are using these apps to access goods and services. The installation of the app increased up to 55% for Android users and 32% for iOS users in 2021. As a result, many eCommerce companies are working towards mobile apps as part of their marketing strategy to ensure that the users have a smooth experience while using their mobile apps. 

According to a report of McKinsey Global Institute, by 2025, the internet penetration in Africa will be 50% with 600 million internet users and 360 million smartphones. This will result in $75 billion in annual eCommerce sales and the internet contribution to the GDP will be approximately $300 billion. The internet penetration will not only result in positive growth in retail sectors but also other important sectors like financial services, health, education, education and government. 

eCommerce has opened up new shopping experiences for the middle class of Africa. Right from the comfort of the home, one can order products that are swiftly delivered at the doorstep with the help of services like YunExpress, ePacket and other logistics partners of eCommerce companies. eCommerce has provided the African citizens with more choice and convenience at lower prices. It is expected that by 2025, eCommerce will contribute to ten percent of all the retail sales that take place in Africa. 

eCommerce Is On Drastic Rise In Africa 

With the usage of cards, there has been confidence in contactless payment to avoid Covid-19. Many eCommerce platforms are considering end-to-end mobility with online payment for users. The United Nations Conference on Trade and Development shared that from 2014 to 2018, the global average of online shoppers was 12% but in Africa, the number was 18% annually which indicated that Africa had the potential to be a huge hub for potential consumers. Currently, more than 264 eCommerce start-ups are functioning in Africa and the number is continuously increasing. However, the entrepreneurs are facing a large share of challenges in the form of ICT, cyber-crime, logistical infrastructure, digital literacy and low internet penetration. 

Many eCommerce companies in Africa are embracing social consumers to interact with the millennials for buying their products and this is actually proving beneficial for them. The same is visible in the form of increased sales even during the pandemic period. Africa has the potential to be a marketplace for eCommerce, and for that to happen it is important to ensure reliable and fast internet connectivity and digital education. 

Online retailers should grab the current opportunity to deliver better products and more choices to the users at a reasonable price to enhance the shopping experience of the users to grow. The launching pad for the small and medium enterprises are ready, thanks to the power of the internet without having the need to spend more for starting a business. eCommerce which is relatively new in the region has the potential to grow at an exponential rate provided that the business owners change the way of doing business by embracing digital business to meet the modern needs of the African people.

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