Start-ups, entrepreneurs, anyone with a business on mind is constantly keeping a watch for opportunities and with the recent economic growth rates and rising youth population in Africa, it is no less than a whale in the ocean, everyone is interested to catch.
With the eCommerce giant Amazon paying no interest in the African market, a lot of eCommerce beginners are rising to take Africa by storm. But there are some limitations why eCommerce in Africa appears to be a bit risky like the lack of infrastructure, logistics barrier, illiteracy, poverty, lower internet penetration etc. That doesn’t stop Africa from hoping for the best. They are taking interest in eCommerce and are searching for good and quality products online that they can get at a fair price, just like consumers in other countries. In short, they are expecting more eCommerce multi-vendor marketplaces to emerge that can make their needs met.
Hence, eyeing Africa for your brand-new e-commerce multi-vendor marketplace is not a bad idea but, there are certain challenges that you may have to deal with on your journey to Africa. Let’s see what are they?
Lack of Logistics – eCommerce heavily depends on the postal system to serve their customers and Africa has a major drawback in terms of that. The non-functioning postal systems make it difficult for an online product to reach the customers, due to which you would have to hire a logistics company that can make the delivery possible that too on motorbikes, why? because Africa still lacks paved roads in some areas where only bicycles or motorbikes can reach. Thus, you have to take care of the logistics along with your business in Africa, which means an additional cost.
Trust Issues – Although a developing nation, Africans are yet to be well-versed with the world of the internet. As beginners in online shopping, the people of Africa have trust issues in buying things online. Since Nigeria witnessed a rise in online phishing, people are sceptical about putting their credentials online. Due to online fraud, they fear to make online payments which is why cash-on-delivery is still a preferable method in Africa. Also, the logistics issue makes them doubt whether they will ever get their ordered item or not, hence all the trust issues.
Right Stock and Right Pricing – Don’t ever think that anything will sell in Africa just because there is a lack of eCommerce site and access. You must study the market first before getting started with your multi-seller marketplace idea in Africa as then only you will be able to provide them with what they actually need. Also, keep in mind the pricing, research about the GDP of Africa and how much people spend on an average.
Open and Fragmented Market – One thing that you will find anywhere and everywhere in Africa is a market. In front of the master’s home or a shop, roadsides, supermarkets, open markets, traffic stops, people sell all the time. So, you can guess how competitive is the selling business in Africa. Plus, there are vast differences between its countries in terms of payments, languages, cultural differences, and other factors so the e-commerce multi-vendor marketplace you are planning must be built considering all of those.
Literacy Rates – To access your eCommerce site, the viewer must be literate enough to understand, shop, buy and make payment. Unfortunately, there are certain countries in Africa that have less than 30% literacy rate. Hence, there are very few countries where you can target and expect eCommerce sales.
Broadband Cost – Mobile access is more in Africa compared to desktop or laptop usage. Check whether your site is taking up a lot of data usage or not as the high cost of bandwidth can cost you, customers.
In a Nutshell
eCommerce in Africa may seem a risky or loss business but after all, it is a developing nation and the sooner the infrastructures like the postal system, broadband, and transportation networks get better, the more your e-commerce multi-vendor marketplace will start reaping benefits, the only thing it requires is time and effort.