We are living in exciting times and the “Africa Rising” narrative seems much closer than ever. KPMG reports that in seven of the 48 countries in sub-Saharan Africa, e-Commerce constitutes one to three percent of total GDP. This is predicted to grow to 10% of total retail sales by 2025, with an expected 40% annual growth over the next 10 years.
So what are some of the contributing factors to this projected growth? In Africa, a large amount of investment has been dedicated to improving and growing the communications infrastructure, evident when one looks at the fibre-optic cables along the coastline, terrestrially and the 4G networks which have been rolling out. The African continent well known for its high levels of mobile penetration is now also growing in terms of its smartphone market, which has been described as one which is growing rapidly. This increase in smartphone ownership allows an increasing portion of the population to use those networks to their full capacity. This translates to growing e-Commerce and the Digital Economy in Africa.
The Millennials, the first generation to be raised during the Internet age, are known to be highly competitive, yearn to be noticed and generally have a disruptive mindset. Pair this combination with this enabling environment and it could only mean prosperity for Africa.
The mindset of the Millennials and this robust environment have already begun to benefit the Continent positively with various countries within Africa claiming to be the drivers of the continent’s digital boom. In Nigeria alone, a number of e-Commerce start-ups aimed at servicing the Nigerian market have attracted huge venture capital backing. Some of the e-Commerce giants to emerge from this region include Jumia, Konga and Mall for Africa, which made $17 million in sales last year. Ghana is also after the title of being the continent’s leader in the digital economy and the country is attempting to attain this title through the creation of innovation hotspots. Kenya has made a huge contribution to the digital economy by establishing themselves as the leaders on the continent when it comes to mobile money, which has become a global phenomenon! Another growth market is the Ivory Coast with the IMF forecasting its economic growth at 8,5%. This coupled with the mobile penetration there, which is currently at 90%, accompanied by the booming creative economy emerging in Abidjan in suburbs like Plateau and Cocody translate into a promising future for the country. Two of the e-Commerce start-ups to emerge from here are Airshop, which is a duty-free pre-ordering app from Abidjan. The app allows consumers to pre-order their duty-free items and then pick them up as they board their flight out of the country. There is also Wasiri.com which is a platform specialising in local and international brands which are not easy to come across at physical shops in the country.
These are truly exciting times and the Fourth Industrial Revolution, as this era has been affectionately termed, present great opportunities for the continent. A lot of work will have to be put in and mindsets may have to change in creating enabling environments but I truly believe there is nothing standing in the way of Africa taking the lead in this era.