Lagos leads other African cities in eCommerce order volumes
e-Commerce
• Fashion products record highest sale as mobile phones see 8% order
•Smartphones costliest in Nigeria, other SSA countries
Lagos has emerged top among cities with the highest volume of electronic commerce (eCommerce) orders in Africa. Nigeria’s commercial nerve centre, Lagos, ranked first, with Cairo (Egypt) in second position, followed by Nairobi (Kenya) in third position. Morocco’s Casablanca was fourth; Abidjan (Cote d’ Ivoire) fifth and Giza (Egypt) sixth. Abuja (Nigeria) ranked seventh; Accra (Ghana) eight; Kampala (Uganda) in ninth and Rabat (Morocco) is 10th.
A whitepaper, titled: “Towards a flourishing digital economy for all – a spotlight on Africa,” published by Mobile World Live in partnership with the Department for International Trade and collaboration with the Global System for Mobile telecommunications Association (GSMA), which revealed the eCommerce status of the region, noted that across the continent, a cohort of pioneering businesses are already creating a vibrant market for e-commerce. It stated that they have developed innovative solutions to Africa’s challenges around payment, identity and delivery addresses.
It revealed that fashion, with 21 per cent order volume, has the highest purchase on the Continent. Beauty products at 15 per cent is second; home and leaving 12 per cent; food delivery 12 per cent; digital services 12 per cent; Fast Moving Consumer Goods (FMCG) 10 per cent; phones eight per cent; Electronics seven per cent and others three per cent.
The report further revealed best selling products to include power-bank; body wash; sugar; peas; facemask and rice. In terms of order by destination, it revealed that 51 per cent orders came from primary cities; 27 per cent orders from secondary cities and 22 per cent orders from rural areas. The average order was €30. The report claimed the data were received from Jumia.
The whitepaper noted that eCommerce is booming across Africa, but four nations, Nigeria, Egypt, Kenya and South Africa have made the most progress. Needless to say there are significant differences between these markets.
For example, it noted that Nigeria is home to a thriving content production sector (Nollywood, among others), which is driving a strong market for digital products. Kenya’s market has been shaped by the success of its mobile money platforms. Kenyans now use M-PESA and others to make cashless payments at retail, pay utility bills and buy insurance and savings products.
South Africa is different again. It has a much higher percentage of banked consumers, which has reduced the need for mobile money platforms. Its MNOs are also playing a key role in the evolution of its digital economy.
In terms of mobile connectivity, the whitepaper noted that Africa’s digital future and Internet access depends on the speed, reach and affordability of its cellular networks.
It noted that by the end of 2020, 495 million people in Sub-Saharan Africa had a mobile subscription, which is 46 per cent of the population. According to it, there will be around 120 million new subscribers by 2025, taking the total number to 615 million.
The whitepaper said that’s just subscriptions, noting that the more useful number for the purpose of this analysis is mobile Internet connectivity. It stressed that overall, connectivity has increased sharply across Africa in recent years, though the speed of connection varies greatly from country to country.
According to it, the more advanced regions, the majority of those connected are on 3G. “For example, GSMA Intelligence data for 2020 shows 61 per cent of mobile Internet users in Nigeria are on 3G, and 57 per cent of those in Egypt. Meanwhile 2G connections are still significant in some countries (Kenya: 43 per cent), but 5G is yet to arrive aside from in very small numbers in South Africa.”
Still, for all the progress, Africa remains the least connected region in the world. The GSMA State of Mobile Internet Connectivity 2021 report revealed a third of people in Sub-Saharan Africa will be using mobile Internet by 2022, rising to nearly 40 per cent by 2025.
But as of 2020, one in five people (210m) had no mobile broadband coverage. A key reason for this is that they live in remote and rural locations. However, the whitepaper noted that connecting them is less of a technical challenge and more of an economic one. It stressed that in these settings, the cost of building and maintaining network infrastructure can be double that for urban deployments – while revenues can be 10 times lower.
For smartphone connections, the report noted that in Sub-Saharan Africa (SSA), smartphones account for fewer than half of total mobile connections. It explained that the cost of an Internet-enabled handset is an enduring problem.
It noted that SSA has the least affordable handsets of any region. The global median cost of the cheapest Internet enabled handset, as a percentage of monthly GDP is 19 per cent. In SSA it is 26.5 per cent.
According to the report, one possible solution to this problem is the smart feature phone. It noted that Chinese companies such as Tecno have launched hybrid models, reducing the price of an entry-level Internet enabled handset to $28 in 2020.
“Another workaround is pay-by-instalment. Today, a number of schemes offer this purchase method with the innovation that software in the phone will lock it if the subscriber defaults on a payment. Safaricom’s Lipa Mdogo Mdogo programme is an example of this,” it stated.
Related
Latest
Get the latest news delivered straight to your inbox every day of the week. Stay informed with the Guardian’s leading coverage of Nigerian and world news, business, technology and sports.
0 Comments
We will review and take appropriate action.