By 2025, ecommerce in Africa is expect to represent as much as 10% of all retail sales in the continent’s largest economies. Couple this with a rapid increase in mobile penetration and desire for more product range, Africa could present a fantastic opportunity for retailers looking to capitalise on first mover advantage in the region.
Having grown by 30 million people in 2015 alone, Africa’s population has surpassed the 1.2 billion mark. Expected to grow further and reach 2.4 billion people by 2050, Africa represents a huge and underpenetrated consumer market that can be immediately addressed.
Nigeria is currently the most populous country on the continent, and it is also projected to become the seventh most populous country in the world by 2017.
African consumers are more informed, deal savvy and are becoming increasingly confident when purchasing online. It’s no surprise then that online marketplaces are becoming the preferred sales channels for the majority of African online shoppers.
Although online shopping on the continent is at a very early stage, Africa offers retailers a surprisingly large number of marketplaces available locally. Currently, the leading marketplaces across the continent are Konga, Jumia, Kaymu and bidorbuy.
Internet connectivity is growing rapidly across all African countries, with 50% of the continent expected to have access to the internet by 2025. Online shopping could account for 10% of all retail sales in Africa, reaching $75bn over the next 10 years.
Africa is all about mobile, with 80% mobile penetration across the region. In Nigeria alone, 42% of internet users access the internet with their smart phones rather than PCs, so when selling to African consumers, take advantage of making mobile purchases as simple as possible.
With strong levels of confidence in African economy and growing purchasing power, Africa’s middle class is quickly rising, expected to grow more than 50% over the next 10 to 20 years. Currently, more than a third of the continent spends between $4 and $20 a day, and an increasing portion of this spending is happening online.
As African consumers becoming increasingly connected, they are also demanding a wider range of products and all time availability.
The low variety of products available at physical stores domestically and the competitive prices offered online make African consumers more and more open to purchasing via web stores and online marketplaces.
With physical infrastructure limited, and even the largest cities lacking brick-and-mortar locations, online retail is becoming an increasingly attractive option to overcome the supply bottleneck across all regions on the continent.
Currently, more than half of the people in rural areas get access to retail for the first time, which combined with the underdeveloped offline retail, drives the online opportunity in Africa even further.
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