The Aquarian Age is upon us, and not surprisingly, the global economy is solidly in the digital space.  What was once a brick and mortar world, particularly in the sale of goods and services, is now increasingly functioning and delivering through the ether of the Internet.  While the western world has been an early adopter and capitalized on the commercialization of online capacity, its markets have reached a near peak and saturation. Other countries are just now revving their digital engines and this means the potential for unprecedented growth for local and global companies.  This is becoming even truer in Africa as the continent is hot on the heels of ramping up ecommerce activity and welcomes world participation.

All of the indicators are there for greater global digital engagement, but sometimes the on-the-ground experience can be different – and daunting.  It’s true there are more basic structural issues that Africa must contend with – and the main problems revolve around the R word. Reliability. Whether it’s access to the Internet, transparency of financial institutions and payments, postal services and delivery, reliability is often the missing ingredient to a well-oiled machine.  This is where technology and digital solutions have emerged as winners, with the continent’s ability to innovate and apply advancing at a feverish pace. 

Incredible Growth Opportunity

McKinsey & Co has called Africa one of “the 21st century’s great growth opportunities,” reporting that it has the second-largest digitally connected population in the world after China.  This means it has the capacity and means, mainly through mobile, cloud technology and automation to accelerate online business expansion in unique ways.  That coupled with mobile payment services like M-Pesa (which predated Apple Pay, by the way), makes doing business electronically very accessible and relatively easy.  M-Pesa is a money transfer, financing and micro-financing service launched in 2007 in Kenya and Tanzania by Vodafone for the locally marketed Safaricom and Vodacom. To address one of the key concerns of reliability of eCommerce payments, M-Pesa provides a novel solution – it is, in essence, a branchless banking service where people store, transfer and spend money all through their mobile devices.  The service has since expanded into Afghanistan, India, South Africa, Romania and Albania.  

Online Marketplaces

So this brings us to online marketplaces – we’ve shared more recently that Jumia and Konga are the two largest eCommerce platforms in Africa.  They too have solved one of the key structural issues of unreliable postal service by integrating shipment and delivery into their brand and operations.  In addition, the big players are also active in most African countries – this includes eBay, Amazon, AliBaba and Spain’s Grovo. Here are some of the other leading eCommerce platforms by region, highlighting a sophisticated African digital consumer.  

Of course, digital trade is often anchored in broader international trade policy.  To that end, a colleague in Nairobi, Kenya emphasizes that “the policy environment is right in Africa” for more global companies to enter via eCommerce. Kiringai Kamau specializes in the application of ICT in the agribusiness sector and serves, among other things, as Africa Lead for the Global Open Data for Agriculture and Nutrition (GODAN) initiative – a multinational effort to build high-level policy, and public-private institutional support for open data.  He points out that Kenya and the U.S. continue to have a healthy trade relationship and that greater Africa is an open marketplace to the West.

Also important to note that all the major global players, such as Google, IBM, Microsoft and Amazon, have a presence on the continent, signaling that a more global ecosystem is being created that allows American and other companies to leverage Africa’s online markets. And with the introduction of the African Continental Free Trade Area in 2018, it has become the world’s largest trading zone with 52 countries participating.  This means a single, competitive market that encourages the integration of the continent and aids in the growth of its economic development.  

Exciting Opportunties & Benefits

For small and medium-size companies around the world, including in California, this means access to a huge marketplace that they may not have yet considered – with the benefits of social entrepreneurship.  The industries that tend to offer the most opportunities are agribusiness, supply chain and logistics, cloud technologies and textiles. So, if a company makes items that can aid and make more effective local knowledge, manufacturing, production and output, there is even more access to doing business in Africa. 

As an example, cost-effective machinery and parts would be highly valued as many of those currently in use are dated from colonial times and in poor condition. Of course, one must keep in mind that each country and region will have specific industries and sectors that are more accessible than others depending on the makeup of their economies and consumers.

As always, having local partners or consulting with country and trade specialists before market entry is recommended.  Most importantly, and perhaps more so than platforms and processes, is quality. There is a resounding agreement that while the standard of living and purchasing power is still strengthening in Africa, quality and safety of cost-effective goods and services is paramount.  Like in other markets around the world, understanding and engaging the consumer, creating a relationship and providing quality products is essential for ecommerce success in this burgeoning and rapidly developing part of the world.

Kuntal Warwick
Kuntal Warwick

Global marketing and business professional with senior-level experience across industries, including higher education, arts/culture, healthcare/biotech, cleantech, and with a focus on innovation.