African online retail has been growing fast in recent years and this trend is forecasted to continue. Several factors are contributing to this impressive growth. Africa has the youngest and second largest population in the world. Thus, there is potential for a vast digital audience. In addition, internet penetration has been rising due to the broad expansion of smartphones and mobile devices in general. Indeed, mobile e-commerce dominates the online shopping scene. Various digital payments are becoming more widespread in African countries, which is certainly a key aspect for e-commerce. Credit cards are still quite uncommon. Alternative payment methods such as cash-on-delivery and mobile money are being used by digital buyers.
Africa's most competitive markets
Particular attention should be paid to some of Africa's most competitive markets: Nigeria, South Africa, Kenya, Morocco, and Egypt. These are the largest economies on the continent. In these markets, online retail is booming thanks to several leading companies which operate in many other African countries, e.g. Jumia, Konga, takealot, and Kilimall. Nigeria is the headquarter of two popular online marketplaces in Africa, Jumia and Konga. South Africa is home to takealot.com, the largest e-commerce platform in the country, while Kilimall was founded in Kenya. Since mobile e-commerce plays an important role, a look at the most popular shopping apps can provide a better overview of the main players in these markets. Unsurprisingly, Jumia Online Shopping heads the rankings in Nigeria and Kenya, and is third after Souq and Alibaba in Egypt. Souq.com, renamed Amazon.eg in September 2021, is an Amazon company and the largest e-commerce platform in Arab-speaking countries. Meanwhile, in South Africa, the fashion e-commerce platform SHEIN is the most popular shopping app.
Payment methods and the mobile money revolution
Some other aspects which help to understand e-commerce in Africa are payment methods. As mentioned before, the African landscape of digital payments is quite unique. Data on the transaction volume of selected digital payment platforms in Africa shows that mobile money payments with M-Pesa were much more common than those made with African credit cards. Mostly unknown in advanced economies, mobile money represents a revolution in other markets, making financial services easily accessible throughout the country, including remote rural areas. Mobile money allows customers to receive, store, and spend money using a mobile phone even without internet access. Another common payment method used for e-commerce is cash-on-delivery, which means that users pay for their order on delivery. In economies with low credit card penetration and less trust in digital payments made in advance, cash-on-delivery remains a common payment method.
What African digital shoppers buy
Other characteristics which define online shopping in specific markets are consumer preferences on what to buy online. A survey conducted by Statista in several African countries investigated the items consumers in Nigeria, South Africa, Morocco, Kenya, and Egypt prefer to buy online. In all these countries, digital buyers stated to purchase clothing, shoes, and consumer electronics online. Despite the rapid growth of the e-commerce sector on the continent, online shopping in Africa is still under the global average, even in Africa's driving markets. According to recent data, some 41 percent of internet users in Egypt make online purchases. In South Africa, the share of digital buyers is around 47 percent, while the worldwide average is 58 percent.
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