Does the mobile trend drive B2C E-Commerce adoption in Africa?

Posted on: B2C E-Commerce | Blog on May 27, 2016

Africa has the smallest Internet penetration rate among the world’s regions. And yet, over the past five years, the number of Internet users in this continent nearly tripled. What is spurring the Internet adoption in this emerging region? The answer is – mobile. Mobile Internet subscriptions have surged in Africa and presently account for more than 90% of Internet connections in countries such as Tunisia, Kenya and South Africa, according to local Telecommunication Regulatory Authorities. A 2015 survey revealed that more than two thirds of the populations of South Africa, Nigeria, Kenya, Senegal, Tanzania and other African countries now have a mobile phone, and smartphone penetration is growing, though is still limited to low percentage shares.

Mobile technology is Africa’s answer not only to low Internet connectivity, but also to the financial inclusion problem. According to the World Bank’s 2014 data, just above one-third of individuals above 15 years old in Sub-Saharan Africa had an account at a formal financial institution.  With banking penetration remaining low and mobile phone ownership growing, mobile money services have thrived. Kenya is one example: mobile money accounts there outnumbered the total for credit and debit cards by a factor of three, as of early 2016.

What does the mobile trend mean for B2C E-Commerce in Africa? As the number of people gaining access to the Internet increases, so does the potential client base of online retailers. But surveys show that online shopping remains a marginal activity among Internet users in Africa, barely touching a two-digit percentage number in some countries. It follows that although the mobile technology assists the development of online retail in Africa through increasing the number of Internet users and distant payment means, there are many other challenges to overcome, weak logistics and online payment infrastructures among them.

For more information about the emerging B2C E-Commerce markets in Africa, see our report “Africa B2C E-Commerce Market 2016” and “South Africa B2C E-Commerce Market 2016”.

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