Mckinsey’s Lions go Digital report predicts that, online shopping in Africa could account up to 10% of retail sales, with a value of around $75 billion by 2025. The reason for this rise according to ForFive is as a direct result of the increasing internet penetration in Africa.
Online shopping is a form of eCommerce which is the act of commercial transactions conducted electronically on the Internet.
Afri-Commerce is eCommerce in an African context. It is impossible to believe that eCommerce as practised in the rest of world will work in the Africa market.
The African market is a very different market that faces many challenges, it is therefore imperative for African businesses operating in the Afri-Commerce space to find innovative ways to overcome these challenges in order to serve their market.
My top 7 Afri-commerce challenges and possible ways of overcoming them:
1. A large segment of the African population is unbanked: Instead of just relying on online payments, Alternative ways of making payments need to be included such as mobile money and cash on delivery (COD).
2. Online fraud: As we all know there are many scammers out there in the wide web, therefore Afri-Commerce stores need to ensure that they online security systems are vigorous, they should look for reputable payment solutions that will ensure safety of consumer information such as personal and financial information.
3. Expensive internet: This is a major challenge which can be changed through putting pressure to change national policy lower internet costs. Alternatively, you can send potential customers catalogues and enable them to buy via text (SMS) and pay using mobile money or COD.
4. High delivery costs: These can be overcome by trying alternatives methods of delivery such as drone delivery or crowd-sourced delivery services which is basically using method of fulfilment that leverages networks of local, non-professional couriers to deliver packages to customers’ doors. Companies such as Jumia have in sourced their delivery function to lower costs.
5. Consumer knowledge and awareness: In Africa online shopping is mostly popular in the growing middle class consumers, some lower class consumers lack awareness of online shopping and may be hesitant shop and make online payments. Afri-commerce stores need to build awareness of their online channels, through physical pop-ups at markets and malls. Companies such as Jumia and Zando go as far as establishing a physical sales force with tablets that will walk consumers through the online experience, even identifying items to order later by text message or phone. In essence Afri-commerce stores should follow the phygital were they have both presence in the digital and physical space.
6. Supplier professionalism: Most Afri-commerce stores sell on behalf of suppliers mostly those in the informal sector, some of these suppliers are not knowledgeable on how to run a professional business. One of the ways to overcome this is to start from the top to bottom. What does this mean? Start by listing the top end suppliers, then get funding and start listing the informal traders. However, it is important to remember that you need to simultaneously put in considerable time into training and empowering them to become professional.
7. Abundance of Markets: There are many markets selling products at different prices and quality. Afri-commerce need to differentiate themselves based on their customer service, quality and social impact. Nothing beats quality service.
Lets do Afri-Commerce and give our customers the best African experience. Remember to buy African brands to boost the African economy.