Alongside the growing middle class is deeper penetration of the internet with half of the continent expected to be connected to the web by 2025.
Even so, the current number of people accessing the web do so for many reasons including shopping on various websites. The rise in shopping of products online has seen an increase in e-commerce sites that are responding to the needs of African shoppers.
Benefits of e-commerce in Africa
E-commerce technology has been present in western continents for decades and is now taking over Africa resulting in the re-shaping of the business landscape. The growth of e-commerce brings with it many advantages for small and large businesses on the continent. Some of these benefits include:
Minimal setup costs
Although Africa is growing economically, setting up a business is quite expensive for many of its residents. However, with e-commerce which is mainly done online, the expenses are less costly with the majority of the profits going back to the pockets of entrepreneurs.
Also, the significant investment is on a website that is designed for online selling which you can build on your own or hire a professional. Fortunately, there are many website builders available online that offer a step by step guide on designing different types of sites, with one of the most popular ones highlighted in this wix ecommercereview.
Engagement with modern markets
In earlier times, trading across different continents was restricted to traditional trading avenues, but with e-commerce, everything has changed. African entrepreneurs can now easily connect with clients all over the world without leaving their hometown. Payments for products ordered can also be made online making trading more comfortable and less costly for those living in Africa. It does not matter whether trading is done between individuals or companies, the opening up of e-commerce has brought with it easier engagement across markets that would not have been achieved otherwise.
Plug-in to existing e-commerce framework
The advancement in e-commerce across the world gives Africans a chance to plug into the existing infrastructure and earn money quickly. The online selling sector is not controlled by anyone making it easier to get on board and earn revenue from the first day. In most cases, African e-commerce sites leapfrog into the future and enjoy the immediate benefits of selling stuff online without having to build a framework from scratch.
Availability of payment gateways
Getting paid when selling goods through e-commerce sites is one thing that Africans using the internet to make money do not have to worry about. Fortunately, portals that are designed to receive money from e-commerce sites are available with the majority being used by large multinationals as well as small businesses. The gateways are secure and allow for integration with a majority of domestic systems that have been set up in African countries.
How to cash in on the African e-commerce revolution
The growth of e-commerce in Africa is only set to rise with many entrepreneurs seeking to have a piece of the pie. However, setting up an e-commerce business in Africa comes with its unique opportunities and challenges that need to be understood by those seeking to venture into the continent. Some of the things to consider when looking to make money through these sites are listed below.
Use of mobile-based payments
Most people that enjoy shopping online in Africa are always afraid of getting conned or being sent substandard goods. It is for this reason that many e-commerce sites operate on a Cash On Delivery contract. However, with the emergence of mobile money applications, many have switched to such platforms to avoid incidences of theft, as a third party handles the money on their behalf. E-commerce sites that allow payment through mobile money have a higher chance of success in Africa.
Delivery of goods
The one advantage of buying items online is having them delivered to your home, office or another preferred location. However, post office services are almost non-existent in African resulting in the need to look for alternatives to deliver goods. Majority of e-commerce sites ask for information on the actual location of a customer and send purchased products using motorbikes or office vans. In some cases, delivery is done to the closest location possible if the actual area is inaccessible.
Competition from brick and mortar stores
E-commerce companies have to contend with other traditional businesses that sell the same wares that they have on display online. These stores have built a customer base over time and are the go-to businesses for clients seeking particular goods. In most cases, their costs are affordable requiring better incentives for them to shop online. One of the ways, online shopping websites can tackle such situations is by offering substantial discounts while buying in bulk to avoid losses and also offering quality products at all times.
Educating customers about online shopping
Majority of Africans interact with e-commerce sites at a minimal with many being skeptical about their use. Also, low literacy rates make it impossible for some to shop online for goods they need regularly. To counter such situations, entrepreneurs seeking to grow e-commerce sites can invest in education for their clients. Some examples include integration of useful tips as part of an advertising or the building of sites that have more images and less text making it user-friendly.
Ultimately, the e-commerce boom in Africa is expanding with more companies focusing on making the best of the current situation. Entrepreneurs that will enjoy the fruits that come alongside the revolution will be those that have a deep understanding of Africa’s economic growth and the best ways to capitalize on it.
Fortunately, the growth pattern is clear for all to see and the opportunities for the e-commerce sector to thrive in the continent is open to both local and international investors