STARTING AN E-COMMERCE BUSINESS IN AFRICA, ASK YOURSELF THESE 2 QUESTIONS

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alf of the world’s population will be using mobile devices to access the internet by 2020, according to GSMA intelligence. This enormous growth is driven by developing countries in the Sub-Sahara Africa where only 17 per cent of the population are currently mobile internet subscribers which is forecast to increase to 37 per cent by 2020. It has never been a better time to start an e-commerce platform in Africa; however, per my discussion with Awa Caba on Africans Building Africa Podcast Episode 3 you should ask yourself the following questions.

  1. How will I collect payments?

According to a Paypal study, of the 54 countries in Africa Nigeria, Kenya, and South Africa are the top 3 leading digital trade routes. Lot of startup payment processing companies such as InterswitchInternetPay, Cashenvoy, and SimplePay are entering the market. However, the main hurdle is business trust and fraud prevention. Because of the legitimate phishing attacks, African consumers are hesitant to put their sensitive information on the internet. Which is one of the main reason why Sooretul.com, an ecommerce platform in Senegal, is currently collecting payments at delivery.

  1. How will I deliver my products to consumers?

E-Commerce companies in the United States or Europe can easily deliver their products from point A to point B. However, that is not the case in Africa. But, it does depend on which country you decide to start your business. For instance, there is a huge difference in navigation infrastructure between South Africa and Senegal. As South Africans adopt Waze, the world’s largest community-based traffic and navigation app, people in Senegal are still navigating the old way. So, imagine the amount of money and time Sooretul.com have to spend to get their products to consumers.

There is no lack of consumer interested in eCommerce in Africa. As startups continue to innovate and enter the market, we’ll see a huge amelioration on our infrastructures (postal services, broadband, and transportation networks) that will support the operations of eCommerce businesses. Hence, now it’s the time to establish a brand and build loyal customers.

Author: Amadou Hanne

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Showing 3 comments
  • Mohamed
    Reply

    Thank you amdou , i have started eCommerce Company in Mogadishu Somalia, we exactly facing these challenges, how do you think we can improve our business beside these challenges.

  • Austin
    Reply

    Thank you Amadou for your sound advice. I reside in America and I’m working toward starting an ecommerce business that targets Nigeria and Kenya, primarily. At the present stage, I am in search of finding suppliers for drop shipping and it’s proven to be more difficult than I imagined. I’ve found that South Africa has gotten on board with the drop shipping process but I am not finding any solid companies to seek out there. Do you have any insight on this matter and what country would be ideal to drop ship from? I appreciate your time, Thanks…

    • amadou
      Reply

      Austin – My initial suggestion is to take a trip to these countries, scan the market as well meet with potential suppliers. Being in America, it’ll be hard to find these suppliers not along identify the best one.
      Shoot me an email at amahanne@gmail.com and we’ll chat more about how to identify the best country.

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