Africa is a diverse and interesting e-commerce market estimated to reach $50 billion by 2018. With huge potential, it’s definitely in the early stages of growth. Today, we’ve got a roundup of the latest news and African e-commerce developments on our radar.
TheNextWeb profiles a collection of African tech companies in the news in August. Ventureburn looks at the South African tech and e-commerce ecosystem and finds strong activity. With 93% of Africans having access to mobile phones, Internet Retailer looks at the opportunities for e-commerce growth. Research says only 10% of Africa access the Internet from fixed connections while mobile is booming.
An estimated 65% of Nigeria’s 50 million Internet users have shopped online, making that country Africa’s leading e-commerce market. Dressmeoutlet.com, a fashion, beauty and homeware e-commerce startup is already making its mark in Nigeria. African e-commerce may be less than 1% of the active population, but Nigeria e-commerce is already worth more than $8 billion. Etisalat Nigeria and YuuZoo Singapore have launched an e-commerce platform, SME Arena.
Although the South African e-commerce market is estimated at less than $500 million, e-commerce marketplace startup Good Buy Jo hopes to grow quickly. Facebook is helping South African business build e-commerce growth and connect with business around the world. It estimates 40 million international people are connected to businesses in Africa. not all of the e-commerce growth and investment is in Africa, evident in Net 1 UEPS’s $40 million investment in e-wallet service MobiKwik in India.
The dawn of an African e-commerce gold rush may be a false one
This year, Africa Internet Group (AIG), the parent company to e-commerce brands such as general retailer Jumia and travel site Jovago, became the first venture capital-backed business in Africa to be valued at $1 billion after sizable rounds from the likes of insurance giant AXA and French mobile network operator Orange.
AIG is not the only e-commerce focused business to have received large amounts of funding over the last few years, with Nigerian online retailer Konga and South African e-commerce firm Takealot also taking on significant investment.
Yet, behind the scenes, all is not as rosy. Within weeks of the AIG funding announcement, Jumia laid off dozens of staff. Konga and DealDey have had to do the same. Takealot was forced to merge with its closest competitor, Kalahari. For all the excitement, Africa’s highly funded e-commerce companies are simply fighting to stay afloat now.
There are a number of reasons why e-commerce is taking its time to take off. PwC says online retail sales in South Africa, for example, will rise to $770 million, while Frost & Sullivan believes the African e-commerce market will be worth $50 billion, both by 2018. Yet the current viability is minimal. Via qz.com
August in Africa: All the tech news you shouldn’t miss from last month
Yet more funds for African tech companies over the course of the month, making it the biggest month for investment in 2016 thus far.
South African fintech company Zoona was the biggest raiser, taking in $15 million. South African transport tech startup WhereIsMyTransport – which has expanded to the UK and launched a new commuter platform – and Egyptian taxi app Ousta also raised sizeable rounds.
Elsewhere, there was funding for Kenyan mobile voting platform mSurvey, while South African company Custos Media Technologies, which employs bitcoin bounties to cut down on digital piracy, raised follow-on funding.
Other startups to secure investment were Nigerian venue-booking platform OgaVenue and location marketing startup ProximityID. Via thenextweb.com
Everything you need to know about the South African startup ecosystem [2016 Update]
This article is the most comprehensive guide for anyone who wants to get involved with, or have a better understanding of, the country’s fast-growing startup space. It is a part of a series of articles we will pilot, which will also include the West African and East African startup space.
We have scoured South Africa’s entrepreneurial landscape and hand-picked some of the top players to get you started, looking at all sectors from education, investment (angel, venture capital, private equity), government, accelerators and incubators to media players (print and online).
Bookmark this one. The intention is for this article to be a living thing, which will grow into the ultimate resource for South African tech startups and entrepreneurs. Also, with your comments and suggestions we hope to create a clear overview of the people and organisations that influence and shape South Africa’s tech venture space. Via ventureburn.com
Africa’s untapped e-commerce potential
While only 63% of Africa’s group population have access to piped water, a staggering 93% have cell phones.
There’s an enormous opportunity brewing in the world’s second-largest and second most populous continent that outweighs the risks of a region pocked by violence and instability. With the International Monetary Fund (IMF) ranking Ethiopia, Cote d’Ivoire and the Democratic Republic of Congo as some of the world’s fastest growing economies, Africa is demonstrating it is ripe for an unprecedented economic opportunity that, if tapped smartly, could lead to billions of dollars in online sales for major global brands with a strong presence in other areas of the world.
Africa has many unique factors that will contribute to the huge consumer spending opportunity that smart e-commerce companies can take advantage of: Via internetretailer.com
Gains to be made from rapid growth of African digital economy
Yet conventional wisdom would dictate that the current lack of legacy Information and Communication Technology (ICT) infrastructure in Africa is a barrier to realising this enormous digital growth. While mobile internet access on the continent has been increasing rapidly, a recent report stated that fixed internet connections account for only about 10% of all internet connections in most African nations.
And although recent years have seen advances in internet accessibility (such as undersea cabling connecting Africa to the rest of the world), there are still many parts of the continent that have no internet access whatsoever.
However, instead of a barrier, IT providers entering African markets should instead see this as a significant opportunity. Many governments are recognising the important role that ICT infrastructure plays in economic growth and are explicitly promising to harness the power of modern technologies, such as high-speed internet access, to empower their citizens and boost their economies Via bizcommunity.com
Nigeria Is Africa’s Leading Ecommerce Market
Online shopping in Africa has blossomed in recent times, riding on the back of improved broadband access. Nigeria, Africa’s largest economy, is leading the way in e-commerce growth, with 65 percent of the country’s 50 million internet users having at one time or the other shopped online.
This is according to a recent study conducted in Nigeria by Ipsos, a global market research company, on behalf of PayPal. Those who have not shopped online, making up 24 percent of the country’s total internet users expect to do so in the future.
The results of the study confirm Nigeria as Africa’s leading e-commerce nation in the amount of potential and existing online shoppers, which is at 89 percent, compared to South Africa’s 70 percent and Kenya’s 60 percent.
Drivers of Growth
There are several key drivers that would encourage even more e-commerce in Nigeria. Out of the 500 adults involved in the survey, 53 percent of those who have shopped online in the past said faster delivery of goods would encourage them to shop online more often. 40 percent indicated that safer ways to pay was a key driver while 31 percent indicated lower product costs as a driver to do more shopping online. Via venturesafrica.com
From Wall Street to e-commerce in Nigeria
So says Nigerian Olatorera Oniru. Last year, she left a corporate career spanning years of experience at the Fortune 500 companies Bank of America (Merrill Lynch) and General Electric, as well as Ericsson, the Central Bank of Nigeria and MTN. Why? To head into the less-predictable world of online shopping in Nigeria.
“And I haven’t been happier.”
Oniru’s venture is Dressmeoutlet.com, a fashion, beauty and homeware e-commerce platform that is promoting goods made in Africa. Since Oniru used her personal savings to launch the site in January, the company has grown to 20 full-time employees. About 80% of sales are currently from Nigeria, with an increasing number of customers coming from the US and other African markets. Via howwemadeitinafrica.com
African e-commerce: A market up for grabs…
With its fast-growing youth population, expanding middle class and entrepreneurial culture, Africa’s consumer spending is forecast to reach more than $1 trillion by 2020. African and international e-commerce players are betting on a large portion of that spend shifting to online platforms.
Some reports have boldly stated that e-commerce spending in Nigeria, Africa’s second largest economy, will reach an impressive $8 billion by 2025. Yet many analysts remain sceptical, and argue that although there is massive potential, African e-commerce is still in its infancy.
“There are many numbers which have been published by consulting companies and research institutions [around African e-commerce], and most of the numbers are overly optimistic,” says Dr Ndubuisi Ekekwe, founder of the African Institution of Technology, and a regular contributor to the Harvard Business Review. “The most reliable adoption numbers are the ones coming from the e-commerce companies … and unfortunately, they rarely share with the public.” Via moneyweb.co.za
Nigeria: Etisalat and YuuZoo launch SME e-commerce portal
Etisalat Nigeria and YuuZoo Singapore have launched an e-commerce platform, SME Arena, to facilitate the growth of Small and Medium Enterprises (SMEs) in Nigeria. It allows SMEs to converge, network, collaborate, showcase their products and interact with customers and business partners in the digital segment, thereby enhancing efficiency, productivity and profit optimisation.
The partnership gives YuuZoo prime access to the booming e-Commerce and social networking market in Nigeria, with a specific focus on the huge SME market. YuuZoo’s business strategy is to provide complete turnkey platforms that offer e-Commerce, social networking and entertainment to partners with large customer bases. YuuZoo gains access to Etisalat’s 24 million Nigerian subscribers, and the Nigerian population is 182 million.
The Nigerian e-Commerce and social networking market had about 82.19 mobile subscriptions per 100 people in 2015. The total number of mobile subscriptions in Nigeria is put at 150.83 million and the country had the highest mobile internet traffic against total web traffic ratio in the world, at 82 percent in the first quarter. Via itnewsafrica.com
Growth of ecommerce in SA still exceptionally high
This is according to the Online Retail in South Africa 2016 report, released earlier this year by technology consultancy World Wide Worx. Notably, the report indicated that online retail continues to grow at a rapid rate in South Africa, having maintained a growth rate of above 20% since the turn of the century. In 2015, the rate of growth was 26%, taking online retail to the R7.5 billion mark.
Although the rate is expected to drop off slightly in 2016 to 20%, growth in rand terms is expected to remain the same as in 2015 – taking the total to over R9 billion. Via moneyweb.co.za
South Africa: New startup plugs into e-commerce boom
According to uAfrica.com, online shopping is still relatively small compared to the UK and the US, with annual sales values of between R6-7 billion ($468.6 million – $495.7 million), however it is growing at a rate of between 25 and 35% year-on-year – which presents a huge opportunity for retailers. Good Buy Jo, a curated website of some of South Africa’s leading online retailers, aims to partner with ecommerce owners to take advantage of this boom with a risk free advertising solution.
Good Buy Jo offers consumers a place where they can search for things they want across multiple online stores in one location. It is where customers begin their online shopping journey where they have choice, browsing power in one central place and access to deals and promotions, based on their unique interests.
Good_Buy_Jo“Our retail partners are already enjoying a new customer base,” remarks Good Buy Jo co-founder, Pierre Dorfling. “Shoppers are being driven through targeted traffic to the point of purchase, which means we don’t take any sales or traffic away from existing online stores. We enhance their customers’ experience and offer shoppers a ‘sales alert’ feature where they can get notified about sales as they happen across multiple stores, on brands they like. Via itnewsafrica.com
Facebook unveils new resources to help SA companies expand globally
Facebook is supporting South African businesses that want to grow internationally by providing them with powerful new tools and resources that enable them to connect with people in new countries. These new solutions help small businesses become large and local businesses become global.
More than 1 billion people on Facebook are connected to at least one business in a foreign country and 1.57 billion people visit Facebook each month on mobile devices.
In South Africa, 52% of people on Facebook are connected to a business in a foreign country and 63% are connected to a South African company. Via biznisafrica.co.za
South African payment firm Net1 to invest $40 mn in Mobikwik
NASDAQ-listed South African payment solutions and transaction processing company Net 1 UEPS Technologies Inc. has signed a subscription agreement with India’s digital wallet firm MobiKwik. As part of the partnership, Net1 will invest $40 million in MobiKwik, and will integrate its Virtual Card technology across MobiKwik wallets.
“Our strategic investment in MobiKwik provides us with meaningful participation in one of the largest and fastest growing digital payment markets globally,” said Serge Belamant, chairman and CEO of Net1.
“We are excited to partner with one of India’s most utilised digital platforms, through which we can introduce our products and services. Many of our solutions, most notably Universal Electronic Payment System (UEPS)/EMV, are tailor-made to provide multiple financial and other services, increase accessibility, eliminate fraud and reduce cash,” Belamant said. Via techcircle.vccircle.com
That’s it for this week. Enjoy your weekend and we’ll be back Monday with more news you can use.