E-commerce growth creating opportunties for SA exporters

Business to consumer (B2C) online sales in West Africa are expected to experience double-digit growth over the next three years, with Nigeria leading the market in the region. This prediction is made by yStats.com, which earlier this year released a report which states that Africa is considered a “late entrant” into the global e-commerce scene due to a combination of low Internet penetration, underdeveloped logistics and limited cashless payments infrastructure, along with high poverty rates and low income. “However, recent signs of improvement have led to forecasts of B2C e-commerce sales in the region growing at high rates,” it says. According to the International Communications Union, around 16% of the African population has internet access, up from 10% in 2010. This is reflected in Nigeria reporting 38% growth in online sales in 2013, Senegal 21% and Ghana 12%. The leader on the African west coast is Morocco with 56% growth – ahead of South Africa’s 49%, according to yStats.com. The figures support a report released by McKinsey & Company which predicts that e-commerce could account for 10% of retail sales in Africa’s largest economies by 2025. Opportunities are being opened up for smaller exporters by the trend towards e-commerce. “It is no longer just the larger corporations that need to make use of logistics and delivery services, but individual consumers and small businesses too,” says Charles Brewer, Managing Director of DHL Express SSA (sub Saharan Africa). He cites the Economic Community of West African States (ECOWAS) as one of the successful trade blocs in Africa. Exporters based in South Africa have ready access to the West African markets through regular shipping and airfreight services. According to a recently published study conducted by Ipsos on behalf of PayPal and FNB, South African e-commerce sites are already popular with Nigerian shoppers. The study found that 30% of Nigerian cross-border shoppers (online shoppers who have made purchases online from another country) have purchased goods from South Africa in the past 12 months. Nigeria has the largest number of potential online shoppers in Africa, according to Ipsos.