E-commerce, the buying, selling and exchanging of goods and services online, is experiencing a boom in Africa. A number of players have emerged all over the continent, such as South Africa’s TakeALot, which sells approximately 9 million products and Rocket Internet's Jumia, which is currently operating in 13 countries.
Snapshot of Afrika's E-Commerce Players
The potential user base is also growing as more people are getting online on the continent. In January 2016, We Are Social reported that there were 26.8 million internet users in South Africa, which amounts to 49% of the population.
Africa’s internet penetration is at 9.8%, which is quite low. Only one in ten people on the continent is online, compared to nine in ten (90.2%) in developed countries.
As a result of this imbalance, ecommerce and online retailing have taken a while to become established in Africa compared to first world nations.
The e-commerce business model removes the need for interaction at every step of the transaction between buyer and seller, which may work in developed economies, but it may face challenges in the African context.
The biggest change that e-commerce presents is the departure from the African culture of doing business, which involves price negotiations and handshakes. Buying things online requires little to no physical contact with the merchant, and products are in most cases delivered to your door.
Technology often fails to account for customs, lifestyles and values, seeing them as unnecessary barriers to the transaction. There is no room for negotiations, and the price you see is the price you pay.
We are accustomed to a certain way of doing things. You don't just go into a retail store, find a pair of jeans your size and head to the till. Once you find a pair, you, try them on, check if they really fit you, and you repeat the process until you find the right pair. As you grew older your parents stopped buying clothes in your absence, or else they weren’t going to be the right fit.
Introducing a system where you pick one size from a screen and hope for the best does not sit well with the average South African joe. Even with the option to return in 14 days, it’s just not the same.
Another barrier is language. According to Web Technology Survey, 53.2% of all websites use the English language for their content. Less than 0.1% use African languages.
Bear in mind that South Africa has 11 official languages. Only 9.6% speak English as their home language. The most spoken language, isiZulu, has 11.6 million speakers, followed by isiXhosa (8.15 million) and Afrikaans (6.85 million) according to census data collected in 2011 by the SA government.
The language barrier limits how people interact online, especially in countries where English is not a first nor a second language.
Another challenge is payment. The first e-commerce ventures in Africa focused on payment by credit card, meaning that those without accounts missed out. The transaction requires a lot of trust, and typing your personal banking details into a website is not an option. However, operators are becoming much more flexible. You can now pay with mobile money, and cash on delivery is also an option.
E-commerce site owners need to consider the environment of which they operate in. Language use and societal norms that societies have need to be taken into consideration when creating an online platform. Potential internet users are being excluded from participating in the emerging digital age. Addressing these barriers could potentially increase e-commerce activity as well as internet penetration in Africa.