Smartphones could help expand Africa’s e-commerce market to reach a projected US$75 billion within the next decade.
This is according to a recently published report by the Economist Intelligence Unit (EIU) ‘How technology is driving retail in Africa,’ which also says e-commerce sales in Africa could reach between US$50bn and US$75 billion per year within the next five-to-ten years.
The report highlights countries and metro regions in Africa with the biggest potential for e-commerce growth, as well as the trends and developments in the market.
It was carried out in collaboration with analysts to show how smartphone adoption and usage is helping to shape Africa’s retail sector.
According to the report, the continent’s e-commerce sector is growing strongly, largely on the back of increased smartphone take-up among African consumers, who are using mobiles to access a variety of e-commerce shopping platforms.
The GSMA mobile economy report 2017 notes that the Sub-Saharan region alone accounts for nearly a tenth of the global mobile subscriber base and is expected to grow faster than every other region in Africa over the next five years.
According to GSMA, the region will have more than half a billion unique mobile subscribers by 2020, by which time around half the population will subscribe to a mobile service.
The EIU notes, “Estimates as to the potential value of Africa’s e-commerce vary, but it could be worth as much as US$75bn per year within the next decade.
“However, several obstacles to e-commerce growth remain, including fear of fraud among African consumers, a logistics network beset by problems, the fragmented nature of African retail markets, a pressing need to improve telecoms network infrastructure and the entrenched problem of illiteracy among a significant proportion of the African population.”
Among the EIU report’s key findings, Nigeria is in pole position to take advantage of e-commerce potential, based on its high business environment opportunity potential. EIU found that smartphones are a gateway tool to the internet for Africans, especially in Nigeria, where the mobile penetration rate is forecast to rise from 103 per 100 in 2016 to 122 per 100 by 2021.
Jumia and Konga are two of the biggest e-commerce companies in the continent, and in Nigeria, nearly three-quarters of users access the Jumia platform via their mobile phones.
Despite the opportunities, fear of fraud, poor transport and mobile infrastructure, supply-chain barriers and the fragmented nature of retail markets in Africa will hold back e-commerce growth in the continent.
The post was syndicated from itwebafrica.