Huge potential for e-commerce growth in African markets

Durban-According to a PayU report, although South Africa, Nigeria and Kenya have the highest Internet penetration rates on the African continent, e-commerce penetration rates are less than 40%. 

The Internet penetration rate is the highest at 56%, while Nigeria and Kenya have 46% and 31% respectively. However, the e-commerce penetration rate of Nigeria and South Africa is 37%, and that of Kenya is 25%. According to a report from Prosus financial technology and payment company PayU, this highlights the huge growth potential of e-commerce in these markets. 

Data shows that Nigeria is by far the largest e-commerce market in Africa in terms of the number of shoppers and income, and consumer spending is expected to be several times that of South Africa and Kenya combined. In terms of e-commerce, it is expected that by the end of this year, the digital goods industry will grow by 94% from 2019 levels, while the fashion and heroic industries are expected to grow by 160%. In 2021, the e-commerce industry is in high demand. The B2B e-commerce boom has just begun: DHLAFI has opened a new e-commerce store for African designers. 

In South Africa, the market is embracing digitalization and e-commerce, and there are abundant opportunities in all fields. Especially distributors of professional beauty, cosmetics, fashion and heroism. 

According to Karen Nadasen, CEO of PayU South Africa, 2020 is a hot year for online payments in South Africa. The transformation of e-commerce will bring huge economic pressure at the same time. “Our mainland is getting more and more attention, and large international brands and payment platforms are investing more and more. Retailers have quickly adapted in the past year. Although unnecessary purchases were banned in the early days, we have seen significant growth in e-commerce. 

More and more transactions are being completed on mobile devices. In South Africa, for example, it is 35% higher than the level in 2019. Naderson said. It is said that online and omnichannel merchants are getting more opportunities because a variety of factors have combined African countries are pushing towards a tipping point for e-commerce adoption.

This is especially true for retailers of fashion, beauty, education, and digital products. PayU data shows that from 2019 to 2020, South Africa’s online spending in the beauty and cosmetics category increased by 140 year-on-year %. In the third quarter of last year, it increased by 229% compared to the same period in 2019. It is expected to grow by 69% by the end of 2021, reaching US$169 million (2.4 billion rand).

 In Nigeria, it is expected to grow to 255 million U.S. dollars by the end of this year, and to Kenya’s 29 million U.S. dollars within the same time frame. Between 2019 and 2020, South African consumers’ spending on fashion and heroism through the PayU platform has increased by 180%. 

The average transaction value increased by $11. In Nigeria, expenditures in this area are expected to grow to US$2.27 billion by the end of 2019. Kenya is expected to reach US$504 million in 2021, which is an expected growth of 160% compared to 2019; Africa is expected to grow between 2019 and the end of 2021 46%, total expenditure reached 336 million U.S. dollars. 

The strong growth of 69% last year significantly supports this, as people consume more digital media while spending time at home. In Nigeria, the sector is expected to grow to US$811 million by the end of this year and to US$70 million in Kenya. Compared to the 2019 results in 2020, both markets have increased by 94% as people seek to improve skills Been at home for a long time. 

PayU data shows that last year’s spending increased 67% year-on-year, and the average transaction value increased from US$136 to US$404. Most of the increase came from the third quarter of last year, when spending increased by 134%. It is said that this evolution has witnessed the emergence of more digital-savvy buyers, their demand for goods and services purchased globally is strong, and the disposable income of some populations has increased. 

These factors make Nigeria, Kenya and South Africa particularly interested in emerging e-commerce leaders outside of these markets. According to the United Nations Conference on Trade and Development, the share of e-commerce in global retail has increased from 14% in 2019 to approximately 17%. The percentage is last. year.

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