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Emerging middle class drives African online shopping
16
Dec '13
Secondary market research publisher yStats.com has released findings in its “Africa B2C E-Commerce Report – 2013” indicating that the growing Internet penetration, the spread of mobile technology and improvement of payment and delivery infrastructure are factors that can boost E-Commerce on the continent.

yStats.com CEO Yücel Yelken states “E-Commerce has a high potential in Africa as the growing middle class seeks more convenient shopping and better price quality, driving local and international Internet merchants to operate in the region.”

Several strong local players have already emerged, such as South Africa’s online fashion retailer Zando, and Nigeria’s online mass merchants Jumia and Konga. B2C E-Commerce sales were less than EUR 1 billion in 2012, but annual growth of around 40% is forecasted in the next ten years. The main obstacles to overcome on the way to B2C E-Commerce boom are poor logistics in rural areas, low banking penetration and limited consumer awareness.

M-Commerce and mobile payment especially have a high potential on the continent, where mobile phones are more widespread than computers, a significant proportion of the population has no banking relationship and the most common type of Internet access is through a mobile device. Moreover, over 10% of active Internet users in Africa shopped on mobile in 2013. In mobile shopper penetration, Nigeria, Egypt and Morocco are ahead of South Africa.

South Africa is the current regional leader in online shopping

Over a half of Internet users in South Africa who go online at least weekly make purchases over the Internet. South Africa also is home to some of the largest merchants on the continent, such as online merchant of books and electronics Kalahari and online fashion retailer Zando.

However, other countries with high potential might overtake the leader in the future. Egypt, Morocco, Nigeria and Kenya follow South Africa in terms of online shopper penetration, but some of them lead in terms of Internet penetration and mobile usage.

Online shopping growth in South Africa is driven by increasing Internet penetration and improving payment infrastructure, especially through mobile payment paths. B2C E-Commerce sales in South Africa are expected to grow by a quarter in 2013, to reach less than half a billion EUR. The number of active Internet users in South Africa grows at small double-digit growth rates, with the leading type of connection being mobile.

Among the prominent players on the South African E-Commerce market are local online retailers and auctions website, as well as international sites. The market leader is online merchant Kalahari. Event and travel tickets, books, hotel reservations, video and music were the most purchased product categories.

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