Analysis of current situation and development resistance of African e-commerce market
There are 57 countries and regions in Africa. In 2021, Africa’s population will be around 1.28 billion, and the number of e-commerce users will be 334 million. As the leader of African economies, Nigeria has 78 million e-commerce users in 2021, followed by South Africa with 24.7 million e-commerce users. The penetration rate of Africa’s overall e-commerce market is 27.9%, which is less than 1/1 of China’s. The African e-commerce market in 2021 will be US$37.83 billion.
Main e-commerce markets
- Nigeria
- South Africa
Consumption characteristics
90% of local products in Africa come from China, and African consumers are still distrustful of the security of Internet payments. Cash on delivery is a very common payment method in online shopping. Africa’s infrastructure and logistics network are not yet fully developed, and the available logistics methods are very limited. This is also a major problem faced by e-commerce. Consumers in Nigeria, Egypt, and Kenya buy most electronic products (such as TVs, smartphones) online, followed by clothes, shoes, and household equipment.
Development resistance
(1) Poor infrastructure
It is a well-known fact that Africa’s infrastructure is weak. Although it is improving, it is still a major bottleneck for Africa’s development. Imperfect infrastructure makes it difficult to build a logistics supply chain, which fundamentally limits the development of local e-commerce and is also the most important reason for poor logistics timeliness in Africa.
(2) The political situation is turbulent and people lack trust
Due to the long-term impact of war, the political situation in most countries in Africa is very unstable. It is difficult for many African people to build trust in the invisible and intangible online shopping behavior. Rich people with spending power will also worry about security issues and be unwilling to fill in true information. The poor are more worried about being cheated, so they resist mobile payments without physical goods, and prefer cash on delivery.
(3) Low education level
The education in most African countries is very backward, with low education levels of the people and many people illiterate. For example, the basic education coverage rate for Nigerian youth is less than 20%. Low educational level increases e-commerce operating costs and labor training costs to a certain extent.
(4) High broadband cost
In Africa, the cost of mobile Internet broadband is very high. In some African countries, the cost of Internet access at 256KB per second is as high as $100 per second, while in European countries such as France, the cost of Internet access at 20MB per second is only $40 per month.
Development advantages
(1) Mobile Internet users are growing rapidly
Global Internet data released by We Are Social and Hootsuite in 2018 showed that in 2017, Internet users in Africa increased by more than 20% year-on-year. Moreover, nearly 280 million people in Africa use mobile payments, and interestingly, the number of people with bank accounts there is only one-third of the number of people who use mobile payments. With the growth of mobile users and the popularity of mobile payments, online services have become more popular, and online shopping has gained momentum.
(2) The industry is weak and the demand for imported products is large
For a long time, Africa’s industrial level has been extremely backward, and basically all economic production needs and people’s daily necessities have been dependent on imports. The African region, with a total population of more than 1.2 billion, has an increasing demand for textiles, light industry, watches, clothing, hardware, home appliances, bedding and electronic products. In addition, the mobile Internet is gradually popularized in African countries, which has promoted the development of e-commerce platforms in African countries. Development provides opportunities.
(3) People do not have the habit of saving
Compared with other parts of the world, people in many countries in Africa have long been accustomed to “low-quality” living conditions, and rich people will not laugh at the poverty of others. Therefore, they will not think of improving their quality of life by saving money. Because there is no concept of saving money, Africans like to buy daily necessities immediately after their salary is paid. Therefore, in the African retail industry, sales at the beginning of the month are generally significantly higher than in the middle of the month, and consumption enthusiasm on weekdays is significantly higher than on weekends. It can be seen that the consumption power of the African people is actually not low.
(4) Few offline retail options and high prices
Yang Tao, the founder of Kilimall, a well-known cross-border e-commerce platform in Africa, once said that a big reason why he founded Kilimall is that offline shopping in Africa is not only troublesome but also expensive. In Africa, apart from e-commerce platforms, people have only two choices for shopping. One is to go to supermarkets and large shopping malls, and the other is rural markets similar to China. This is the place where Africans go most often. There are two problems here. Most of the items in supermarkets are imported from abroad. There are few choices and the prices are very expensive. The retail price of the same products in many African countries is almost 3 to 10 times that of China, which is very high. exaggerate.
Conclusion
In Africa, known as the “last virgin land”, the stories of Chinese gold diggers have never stopped. Starting from aiding construction in Africa in the 1960s and 1970s, the first generation of Chinese helped the African people build infrastructure. Many Chinese workers were sacrificed for the Tanzania-Zambia Railway. Starting in the 1980s and 1990s, the second generation of Chinese began to make their way into Africa and brought Chinese goods to Africa. Entering the 21st century, the third generation of Chinese, represented by basic communication service providers such as Huawei and ZTE, has woven a “communication network” towards modernization on the ancient African continent. Then the Chinese sold Chinese mobile phones to Africa. Today, the mobile phones most used by Africans come from a Chinese company – Transsion. At present, the Chinese are standing on the shoulders of previous generations of Chinese “African invaders” and using basic projects such as roads and bridges, China-Africa trade, mobile Internet and mobile phones to begin to provide Internet services to the African people.