About 21 million people shopped online in Africa, in 2017, according to a new report (PDF) from United Nations Conference on Trade and Development (UNCTAD). In a continent of 1.2 billion people, that is certainly small. Nigeria, Kenya and South Africa make up 50% of the market.
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. Jobs are being created and new business models are emerging. At the same time, the
evolving landscape is creating new risks and challenges. The gains from e-commerce are not
automatic, and the increased use of digital technologies can result in new divides and wider income
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%.
Digital entrepreneurship is growing in Africa, but at different speed in different countries. While
comprehensive data are lacking on the extent to which African businesses are selling online, anecdotal
evidence of more e-commerce activity in the enterprises sector is starting to emerge. More and more
micro, small and medium sized enterprises (MSMEs) recognize the importance of digitalization to
participate in domestic and international value chains
Yet, even with this below-par performance, Africa is the highest growing ecommerce market globally accounting for 18% surge since 2014, compared to the world average of 12%, Guardian summarizes.
“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,” the report noted.
Largely, looking at the report, the strategy is thus: continue to invest in offline commerce [it will pay today’s bills] even as you deepen capabilities for online which remains severely small but growing. Simply – have a hybrid commerce strategy to hedge the transition.
Click to join Tekedia Capital and build Next Africa with min of $10,000 co-investment in startups.