With the significant growth of online businesses in Africa, the continent is progressively shaping up to be the next hotbed for internet-based businesses. This growth has been attributed to the high penetration of smartphones and the Internet in the region, which has become prevalent in most African countries. The continent has no doubt become a lucrative market for the e-commerce industry.
Recall that during the covid-19 pandemic, which led to the shut down of so many businesses, most people had to resort to shopping online, which saw a boom in online sales during this period, where industry analysts disclosed that online trade is expected to grow by over half in the next three years.
In Africa, the E-commerce industry is projected to grow by 50% by 2025. In 2020, the market revenue in Africa increased by 52.7 percent, which was estimated to be around 27.97 billion U.S dollars, an increase of over 6 billion since 2019.
In 2021, the E-commerce industry in Africa generated $28 billion in revenue, while in 2022, the industry is predicted to produce $33.3 billion in revenue following an increase of 19%. With the significant increase in E-commerce revenue in Africa, experts disclose that it will continue to increase and will likely reach a value of over 46.1 billion U.S dollars.
In the African continent, there has been a significant increase in the introduction of digital trends in the retail sector, which has effectively enhanced sales, coupled with an increase in customer base. However, before this significant growth of the e-commerce sector in Africa, there were negative reactions that trailed the entry of the e-commerce industry into the African market.
There was so much negativity strong enough to put off timid investors, stating that the continent with over a billion people lacked the necessary exposure for digital-based businesses, with a majority of the people based in the rural settlement, coupled with low internet connectivity. They also cited the lack of quality infrastructure needed to enable a digital-based venture to thrive.
However, it is interesting to note that ten years down the line, the African continent has become a hotbed for E-commerce businesses, as the continent has defied all odds and negative predictions, by proving its viability for digital-based ventures on the continent. These recent achievements in the E-commerce industry have continued to attract investors who are coming in droves to invest in Africa’s E-commerce sector.
The continent was reported to have secured more than $256 million in disclosed funding in 2021. Countries like Nigeria, South Africa, and Kenya continue to dominate the industry in sub-Saharan Africa. With the introduction of E-payment technology, the African continent has continued to witness significant growth in the number of online shoppers.
One amazing thing about the growing e-commerce industry in the region is that they are providing a platform for SMEs to thrive. With partnerships and collaboration with these small businesses, it has continued to improve their business activities and productivity.
The E-commerce industry in Africa has been poised to be a game changer for SMEs. Given the crucial roles that SMEs play in the development of a nation’s economy, the growth of these small and medium-scale businesses will no doubt, greatly impact the economy of nations on the African continent.