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Africa well positioned to exploit ecommerce growth

Africa well positioned to exploit ecommerce growth

Steve Burd, Vice President of Sales for DHL Express Sub-Saharan Africa, believes the rapid rise of e-commerce globally offers African businesses a clear opportunity.

The provider of international courier, parcel and express mail services, DHL, recently predicted that cross-border retail volumes will increase at an annual average rate of 25% between 2015 and 2020 (from US$300 billion to US$900 billion), twice the pace of domestic e-commerce growth.

Burd urges more businesses in the continent to embrace the disruptive technology.

International online payment company, PayPal has stated that this is already a reality amongst African consumers.

The firm's General Manager for Russia, Turkey, Middle East & Africa, Efi Dahan, recently told ITWeb Africa that the continent's e-commerce is growing much faster than a lot of mature markets.

According to a recent KPMG report, The Truth About Online Consumers 2018, the African/Middle Eastern markets import 50% of all online purchases from other regions, making them the number one online importer worldwide.

Data-privacy concerns

According to Dahan, e-commerce is the future as mobile is also more secure than carrying cash/ cards, and payment platforms are more in tune with the behaviour of users.

However, concerns about data-privacy have resulted in more resistance in many adult online consumers, however, Stephan Fetsch, Head of Retail at KPMG Germany agrees that the future brings an opportunity.

"The older consumers are very concerned about data privacy and hence trust in the companies they buy from and share information with is important. On the other hand, younger consumers are less concerned about privacy. As long as they can gain a benefit from sharing their information, they will do it. This trait will become mainstream in the future."

Dahan adds that South Africa is one of the main e-commerce markets globally, as mobile penetration has seen more consumers using their mobile devices as wallets. The country is expected to spend about R63 billion online, from R37 billion two years ago.

A recent report by Disrupt Africa found that the African e-commerce space is growing at an exceptional pace, with the number of start-ups entering the market growing year-on-year to reach a total of 264 ventures operating continent-wide.

The firm said Nigeria emerged as a stand-out leader for e-commerce on the continent, with 40% of Africa's e-commerce ventures located in the country. "South Africa - whose start-ups compete with their Nigerian rivals for fundraising capabilities - and Kenya also have developed e-commerce markets."

Internet, mobile penetration

With rising mobile penetration and internet access, the continent's e-commerce is expected to rise significantly. At the moment, internet penetration in the African markets is 16% and is set increase by 50% in 2025, according to FarEye, a carrier agnostic SaaS platform that digitalises logistics.

There are 57 million people who have smartphones in Africa and there will be 360 million in 2025, the firm notes in a statement. Kushal Nahata, Co-founder & CEO of FarEye, says, "e-commerce logistics companies of the region must adapt to new technologies in order to support their delivery infrastructure."

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