Can cross-border transactions unlock Africa's ecommerce space?

December 9, 2020

Renovating African ecommerce


Sustaining ecommerce in Africa's overpopulated areas has thrown several obstacles to hinder today’s retailer’s success. The rudimentary nature of much of African infrastructure, shallow literacy rate, and hindrances in internet connectivity will be the prime obstacles to ecommerce profit. Cyrine Ben Fadhe (2020) analysis of Jumia located in Nigeria reported a year or year revenue downfall of 34%, leading to a massive loss of about $250 million in 2019. This downfall was predicted as the beginning of the end of Jumia, something we are yet to see but could happen. Ecommerce business owners interested in Africa, highlight Africa as a fragile land for ecommerce not by the failure of Jumia alone but also by the downfall of Wabona (2012 - 2015), Mxit (2004 - 2015), and many more African companies. However, the internet has accelerated multiple debates both in favor and against African ecommerce. Several retailers have predicted Africa as an upcoming golden sparrow for ecommerce in this pandemic scenario. 

Many retailers have utilized the African pandemic situations, i.e., Jumia reemerged with 6.7 million customers leading them to millions of profits.

It seems like Nigeria is opening the door for ecommerce in Africa!


The unexpected U-turn! 

The massive upheaval of lifestyle due to Covid-19 has reinforced the Africans to utilize internet accessibility in online shopping and transactions. COVID-19 and E-commerce - UNCTAD's research highlights around 58.60% of Africans with internet access. Out of 233 African respondents of this research, more than 51% agree to shop online and are already utilizing the debit card for their online payments. This unexpected African-ecommerce resurgence is bringing rising fortunes to e-commerce merchants across the continent. Nigeria and many more African countries hope that this switch will lead to improved living standards. 


Mobile phones and ecommerce 

Internet accessibility and control of mobile phones are enabling Africans to participate in digital onboarding transactions. Mobile phones are the full-time partners of each citizen. Global marketing or on-and-cross-border transactions are conducted with just one click. Worldwide use of devices for ecommerce benefits has tremendously increased in a pandemic year. Similarly, African mobile ecommerce has witnessed spontaneous increases, with Nigeria leading the pack, with an average of 38% of customers using mobile for shopping or ecommerce purposes. With the extension of ecommerce categories, 51% of African respondents have confirmed their use of smartphones for online shopping. 

Mobile phones, as pioneers of ecommerce, are a key determinant in whether an ecommerce merchant can make a profit. Africa has wholeheartedly utilized these gadgets in lockdown scenarios in terms of ecommerce. However, further innovations and enthusiastic retailers are required to turn African ecommerce into global brands like China’s Ali Baba. Africa's capacity to embrace technological change is leading the continent to a brighter economic future. Both the retailers and the African customers are interlinked and have high hopes that cross-border transactions will continue to yield synergies to the ecommerce marketplace.

The foreign ecommerce pioneers still require big shifts in customers sentiments towards their offerings, however the Nigerian ecommerce space is prodding such a shift. This change in terms of in-border transactions can be extended to cross-border transactions.


Utilizing the grand swap! 

Africa’s low literacy and technology usage rate are amongst the prime hindrances to African ecommerce’s adoption and proliferation. However, the pandemic is going to leave permanent marks on the lifestyle of African people. The new normal that less crowded shopping malls are now a sign of good covid-19 management marks a sea change in consumer and merchant’s alike’s shopping behavior.. The African generation, after months of ecommerce, tends not to jump back to manual shopping and banking processes. There can be minor u turns, but chronic use of ecommerce eliminates the idea of backbreaking hard work in a shopping mall. This pandemic scenario is the right time to accelerate ecommerce for both retailers and customers' relentless benefits.


Ecommerce globally extends the company's branch and activates worldwide customers. I predict that the globally extended companies are going to manifest a spontaneous increase in their profit. The customers will be provided millions of choices as per their satisfaction and requirement. So why not start boosting African ecommerce to extend customer comfort and options? So this is the right time to accelerate African cross-border ecommerce. Africans are frequently seeking and finding greater exposure to online shopping, transactions, and even financial services like mortgages. Several manual shopkeepers and bankers have extended their branches through ecommerce. Eko hotel, one of the most renowned hotels in Lagos, has inaugurated an online food delivery, to overcome the deficiencies resulting as an outcome of Covid-19. African retailers are moving with a flexible business idea to decipher economic solutions in any scenario.


Ecommerce, with this tremendous progress, seems to grow without a stop. The customers and retailers not availing of this opportunity can be at a significant loss in the future!




Send more than money.