The increase in social media use in our day-to-day lives has both its benefits and shortcomings. The main area affected major is the e-commerce industry following the adoption of social media platforms. This has contributed to the consistent growth of e-commerce in the continent.
The E-commerce bubble
Before the COVID-19 pandemic, e-commerce was not that popular. Online merchants faced many challenges such as customers being stuck on traditional banking systems and low trust among customers. Even though the COVID pandemic adversely affected our social lives the impact on e-commerce was quite unexpected. The shift to cashless purchases led to the emergence of e-commerce.
E-commerce is expected to skyrocket in the future year due to the availability of low-cost smartphones and excellent internet access. Analysts predict that the market will be worth $75 billion by 2025, with more than half a billion users across Africa. This has resulted in numerous developments in the attempt to promote the expansion of e-commerce. Such industries are:
- Fintech, which includes a couple of businesses that promote smooth cross-border transactions, shortens the time it takes traditional banks to execute online payments.
- Courier services are rapidly expanding to support e-commerce platforms in Kenya, including Jumia, Jiji, and Kilimall.
Customer Base Expansion
According to statistics, African customers prefer eCommerce transactions over traditional purchasing. The emotion is mutual throughout the continent, indicating that the countries with exponential growth are:
- Nigeria: 81%
- Kenya: 79%
- Ghana 78%
- Egypt 72%
- Tanzania: 72%
- South Africa: 68%
- Ivory Coast: 68%.
This analysis found that growth is evenly dispersed across the continent, indicating a lot of promise for e-commerce growth and expansion.
The Future of E-Commerce
The future of e-commerce in Africa looks promising, thanks to low-cost technology and reliable internet connectivity. Trends in improving commerce in the business are already beginning to emerge. The biggest trends to watch in terms of growth and the best places to invest include:
Augmented reality
Virtual playgrounds are getting increasingly popular in the computer world. Augmented reality is currently being widely employed in games and creating virtual rooms for commercial meetings. However, some firms are attempting to leverage this technology to generate a virtual feel for things before they are purchased. This technology seeks to provide customers with additional information about the goods and, in turn, help generate more sales by making them more comfortable with what they are purchasing.
Blockchain technology
Blockchain is currently on the rise. With Bitcoin, the first currency token, set to undergo a major event in its lifecycle, the Bitcoin halving. Blockchain technology is most known for its capacity to store permanent data. This ledger has the potential to significantly improve the logistics industry and reduce transportation-related losses. Using blockchain as a ledger will help to keep cargo data safe. This will boost the business’s integrity. As a result, more clients will trust logistics companies, lowering risk while increasing supply and driving up sales.
Big Data Analytics
Big data is being utilized to develop more targeted advertising, which increases the sales per capital spent on marketing. Big data is also being utilized to improve e-commerce companies’ loyalty programs. These programs try to create a win-win situation between the customer and the firm, with the customer receiving rewards for frequent purchases. Platforms that have used similar approaches have observed an increase in sales, particularly among returning consumers, to profit from the loyalty program.
Finally, e-commerce has grown significantly in Africa in recent years, and this trend is projected to continue in the future. The industry’s expansion has been spurred by the availability of cheap smartphones and reliable internet, as well as the shift in trends and companies. The Africa Unicorn Summit aims to provide a venue for firms to promote their offerings to peers and investors. This is intended to encourage collaboration and expand the capital pool through investments from interested parties. With the Year of Return Africa upon us, and e-commerce on the rise, success and growth are imminent.
