It is estimated that there were in 2017 at least 21 million online shoppers in Africa. While this is less than two percent of the world total, the numbers are rising faster than in other world regions. Three countries – Nigeria, South Africa and Kenya – account for almost half of them.
When Jumia launched its operations in Kenya, it quickly took the place of another digital e-commerce platform, OLX Kenya. Within months of operation, it had dealt a major blow in a sector that was at its nascent stage with OLX closing its operation in Kenya and Nigeria, consequently, the landing ground of Jumia.
New entrants like Kilimall and Masoko.com have heightened the competition even shrinking Jumia’s dominance in Kenya and Nigeria. Earlier in the year, Jumia posted its financial results for the year and it was not rosy.
The company posted a Sh 14.9 billion loss before tax and other costs in the year which the loss blamed on the excessive advertising in one of the most aggressive advertisers in Kenya and the region.
Still, Jumia’s sales grew 41.8 percent to Sh 62.95 billion on the back of higher customer numbers. Its total number of orders grew 63.3 per cent to 8.3 million while the customer base increased 46.7 per cent to 2.2 million users.
The environment has changed rapidly over the last month with more people clicking their way to their desired product on the comfort of their homes, offices or just conveniently on their mobile phones.
The digital economy, including electronic commerce(e-commerce), is growing quickly in Africa, creating new opportunities for entrepreneurs and businesses to expand their market access and join value chains.
It is estimated that there were in 2017 at least 21 million online shoppers in Africa. While this is less than two percent of the world total, the numbers are rising faster than in other world regions. The extent to which people and businesses in Africa participate in e-commerce varies considerably, within and between countries. Three countries – Nigeria,South Africa and Kenya – account for almost half of them.
UNCTAD estimates that the B2C e-commerce market in Africa was worth about $5.7 billion in 2017, which corresponds to less than 0.5% of GDP, far below the world average of over 4%.
Although African countries have made significant progress over the past few years to enhance their e-commerce readiness, persistent gaps remain and countries are at different stages of e-commerce development. In some countries, less than 10 per cent of the population use the Internet, and large segments of the population remain un-banked or without a postal address.
There is also significant variation in the readiness of governments in terms of skills and data to adopt and enforce relevant policies,laws and regulations to harness e-commerce and the digital economy for development.
According to the 2018 version of UNCTAD’s B2C E-commerce Index, the African region lags the rest of the world in terms of e-commerce readiness. Mauritius, ranking 55th globally, is the highest ranked African country, while nine of the ten least prepared countries are in Africa.
A new e-commerce document referred to as Nairobi Manifesto points at different gaps and opportunities in e-comerce in Africa which was developed in a high consultative Africa e-commerce week in Nairobi.
“The digital economy, including e-commerce, is proliferating in Africa, creating new opportunities for entrepreneurs and businesses to expand their market access and join value chains,” the manifesto states. “Jobs are being created and new business models are emerging.”
“At the same time, the evolving landscape is creating new risks and challenges,” it adds. “The development gains from e-commerce are not automatic, and the increased use of digital technologies can result in new divides and wider income inequalities.”
The Africa eCommerce Week was convened to examine ways of enhancing the readiness of African countries to engage in and benefit from e-commerce and the evolving digital economy.
More than 2000 people from 60 countries registered for the week, including The President of the Republic of Kenya, Ministers, CEOs, Heads of international organizations and other representatives of the private sector, civil society, academia and international organizations.
The week-long event was organized by the United Nations Conference on Trade and Development, the African Union and the European Union. It was hosted by the Government of Kenya, financially supported by the European Union and Germany, and implemented in collaboration with partners of the e-Trade for all initiative.
“Partner governments are now moving in the right direction, in step with what private actors and civil society put forward, but also producing rigorous regulatory frameworks,” UNCTAD Deputy-Secretary General Isabelle Durant said at the close of the five-day event. “In organizing this event, we have decided to put ourselves on the dynamic side of history by considering the risks of the digital world but also by addressing them,” she said.
Christian Minoungou, senior policy officer in the Department of Infrastructure and Energy of the African Union Commission, said the AU was proud to be part of Africa eCommerce Week and would continue its work to promote the digital economy and foster development in Africa.
“This type of event will really help raise awareness of some of the key policy issues,” Alessandro Tonoli, trade adviser for the EU Delegation to Kenya, said. “A dialogue between stakeholders is essential if we want to achieve any meaningful result. I took part in the panel on women’s empowerment, and it was the most exciting I have ever participated in.”
Peter Njoroge of Kenya’s ministry of industry, trade and cooperatives said: “This forum has been a major milestone event, especially for Kenya. The forum has been informative, and many ideas on e-commerce and the digital economy have been shared.”
While opening the event, President Uhuru Kenyatta reiterated the significance of e-commerce in Africa and its growing economy.
“For Africa to benefit from e-commerce and the digital economy, the policy environment has to be conducive. It is, therefore, of utmost importance,that appropriate attention should be given to this sector. My Administration has been in the frontline in promoting the use of digital technology to enhance delivery of services to our Citizens.”
He said the objective of his administration has been to reduce the cost and time taken by citizens and businesses to get government services. Innovations such as M-pesa mobile money transfer have put Kenya on the global technology map, he said adding that he will therefore continue to promote technology innovations by ensuring conducive policy environment, which balance between innovation and regulation to ensure Kenya remains ahead in ICT.
Source: The Exchange