McKinsey, a global consulting company, published a report last year on the role of Internet in Africa. The company predicted that the ecommerce market in Africa will grow to $75 billion by 2025.
As ecommerce in Africa is such a hot topic, we have approached Remo Giovanni Abbondandolo, CMO at Africa Internet Accelerator (a start-up incubator) to share his knowledge of the African ecommerce landscape with us.
In this interview, Remo identifies the main challenges for ecommerce businesses in Africa, emerging trends, the role of UX and more.
PH: Hi Remo, thank you for taking the time to have a chat with us about the ecommerce landscape in Africa.
You and your team have been working on launching various ecommerce stores in South Africa. Having South Africa as a starting point, what would you say are the main challenges for ecommerce businesses in Africa?
RG: There are many opportunities in the ecommerce space in Africa, however there are also a few challenges that need to be taken into account.
First of all, it is very hard to find people with the right skills and expertise necessary to work in the online space, in particular for specific positions such as IT, Business Intelligence, Online Marketing and UX.
Second, the internet penetration –even though growing it’s still very low, as well as data in Africa are still relative expensive compare to other countries in the world.
Third, the typical ecommerce challenges are even more relevant in Africa. Users are afraid to shop online as they don’t trust the websites easily, as well as they don’t feel safe to do an electronic transaction e.g. with credit card prior the delivery of the goods.
Moreover, access to products can also be challenging in countries where there is insufficient product selection as the import duties are very high.
Last, but not least, the lack of infrastructure has impact on business operations, such as logistics and delivery as ensuring timely delivery in every area it’s not easy, especially if we consider the distribution of the population, which in Africa is concentrated in a few cities/countries.
PH: We all heard of the common theme of ‘Africa is not a country’ and this saying definitely applies when we are talking about ecommerce trends in Africa. The differences in shopping preferences, cultures etc are a trademark of the African ecommerce landscape.
With Nigeria and South Africa leading the ecommerce growth in Africa, some ecommerce trends have started to emerge such as the rise of mobile commerce, the adoption of various payment options such as ‘pay on delivery’, ‘buy now, pay later’ etc. What are your thoughts on these emerging trends – do they have the potential to become trendsetters for ecommerce in Africa?
RG: I think that South Africa is the most mature country when we talk about ecommerce in Africa. Nigeria, instead, is likely the one with the highest potential: just looking at the size of the market and the undeveloped retail industry.
However the users behavior in those countries are quite different: in Nigeria for example different payment options such as Cash on Delivery are keys for ecommerce, in South Africa, instead, even though important, it’s not the most used payment method.
On the other hand, I think South Africa and Nigeria, as well as all other African countries share the same trends in terms of mobile: more and more users can afford a smartphone rather than a feature phone, and in most of the cases this is also the only way for them to go online.
PH: We mentioned briefly a few trends emerging in the African ecommerce scene. In your opinion, what other developments are taking place in Africa?
RG: I think that Mobile (including payments) is clearly the most important trends to watch in the ecommerce space in Africa.
PH: In your opinion, what are the most important elements that ecommerce businesses should invest in order to deliver a sustainable online shopping experience for the consumers in Africa?
- Customer satisfaction, in particular ensuring that the delivery will happen on time and the return process is not painful
- Products availability, giving the users the opportunity to choose among different products/size/configurations
- Safe, secure and multiple payment options
- Mobile, ensuring in particular that the website is correctly optimized for each different screen, as users tend to browse on mobile but they do not necessarily make a purchase
- Targeted marketing campaigns, online and offline, ensuring that the users reached are the ones looking for the online shopping experience that the business can deliver
PH: What role is User Experience Research & Design currently playing when developing new ecommerce platforms in Africa?
RG: I think that UX should play a crucial role in any ecommerce platform: it’s crucial to understand each single step that an user does on the website, what is looking for, where is getting lost, and optimize the site not based on what the company thinks, but on what the user wants.
This should be even more important in countries such as South Africa where users are not used to make transactions online.