Africa, with its diverse 1.4 billion population staggered across 54 countries has been described as the next e-commerce frontier. Numerous reports from reputable international research consultancies attest to this. Global consultancy, Mckinsey is predicting that will grow by about $75 billion by the year 2025.
The research firm Statistica, was even more optimistic in its report. It is predicting that African e-commerce, which from its estimates generated $27 billion in 2017, will gross $29 billion by the year 2022. However, it must be emphasized e-commerce in Africa still has long way to go, if its volume and the profitability of its transaction must match international comparisons.
Research firm Statistica, revealed that the value of African E-commerce in the year 2017 which stood at an estimated $27billion , is just 1.1% of total global value of e-commerce which stood at $2.3 trillion as at 2017. It can be safely assumed that Africa is yet to attain its full potentials in e-commerce, especially when its population of 1.6 billion roughly equal to 1.6667 billion customers that generated the global e-commerce sales volume of $2.3 trillion in the year 2017.
In addition to this conversation, not only is the value and volume of e-commerce still low in Africa, e-commerce in Africa is still largely unprofitable. Disrupt Africa, an e-commerce research consultancy in its 2017 report titled “African shopping: exploring the African e-commerce ecosystem” reported that about 75% of Africa’s e-commerce start-ups are unprofitable.
This reinforces the fact the imperativeness of putting in proactive policy initiatives and visionary action plans if Africa is to be able to successfully take its giant leap forward in e-commerce, thereby achieving its full potentials.
Africa’s E-Commerce: The Potential And The Promise Of Growth
Africa is home to about 1.25 billion people inhabiting 54 countries. The exponential growth in the use of mobile telephony has contributed a great deal to the development e-commerce in Africa. In fact, Africa has been described as a mobile e-commerce market.
E-commerce in Africa is dominated by three (3) countries namely: Nigeria with a population of 195 million people and an internet penetration of 48%; Kenya with a population of 48.5 million and an internet penetration of 75% and South Africa with a population of 55 million and an internet penetration of 54%. The research firm STASTICA estimated that African e-commerce generated an estimated revenue of $16.5 billion in the year 2017. The research firm is predicting that revenue from e-commerce in Africa will reach by the year 2022.