Challenges of Online Retail in Africa


I love being back on the motherland, but I have to admit that there are things about living abroad that I miss. One of them is definitely online shopping. I loved the arena of choice when it came to the retail stores as well as the simplicity of online payments.

Over the last few years Africa has seen the a significant growth in the online shopping sector, however the continent is still facing several challenges that prevent it from taking off like other areas of the world have.

1) Internet Penetration

As of 2012, the estimated percentage of internet penetration of the entire continent was of 15.6% and only 7% of actual internet users. This means that most commerce in Africa isn’t being conducted online because it would be dealing with a, for a lack of a better word, “niche” market. It does however provide a great opportunity for those who have entered the business to set themselves apart as there is little to no competition.

In English-speaking Africa, great online marketplaces have emerged and have gained success especially in countries like Nigeria, South Africa and Kenya. To name a few, there is Nigeria’s JUMIA (who has recently celebrated its first year), South Africa’s BidorBuy and Kenya’s RupuShops who have been able to rise from competition.

In French-speaking Africa however, the matter is completely different. Though there are several websites that provide classified ads where people may be able to sell and/or buy their cars, there are true online marketplaces.

2) Online Payments and Bank Accounts

Online payments are still a very scary thing to most people mainly because of the scams that often plague the online world but also the simple fact that most people do not actually have bank accounts.

The main reason for the division between French and Englishspeaking African countries comes from the differences in numbers when it comes the penetration of banking services. On average, English-speaking Africans have a banking penetration rate of up to 3 times that of their French-Speaking counterparts (the Nigerian government has taken steps to increase the number of bank accounts in the country, for example). This, however, doesn’t mean that other payment methods aren’t available for those who wish to make a purchase online. In fact, online stores in countries where the majority of the population does not have a bank account have set up a system of paying upon delivery. Though a great alternative, if you happen to be out at your job most of the day, this may not work out for you.

3) Shipping Services

One of the biggest challenges to the growth of online shopping is the lack or deficient post services. While abroad, choosing a post carrier is rather easy because the carriers are well-known and have great service quality. In most African countries, the post services are unreliable or costly so the retailers have to rely on in-house delivery services or small delivery companies to ensure that the orders are complete.

– A.C

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