Across the world, there is undoubtedly a boom in e-commerce. More interestingly, there is significant growth in e-commerce volumes across Africa too. It goes without saying that the COVID-19 pandemic and the related lockdowns and work-from-home arrangements have played an important role in spurring e-commerce activity across the continent.
What has been interesting to observe as well is some countries that are not the “usual suspects” (e.g. Zambia) featuring among the list of countries with significant e-commerce volumes (as per Visa data). Even more interesting are some of the highlights and features of e-commerce across Africa.
Beyond just growth in economic activity and the growth of the e-commerce marketplaces, this spike in e-commerce growth has some second-order effects along the supply chain. There are many organizations and people that benefit when there is a growth in e-commerce activity, however, the two more significant beneficiaries are last-mile delivery operators as well as digital payments companies.
Given a lack of infrastructure as far as national post offices and their delivery capabilities go, we have observed a significant investment in last-mile delivery services by various companies and even the e-commerce platforms themselves. With technology solutions (e.g. requiring a GPS location and not an address, integration of mobile money as a payment option) and the right transportation solutions, it is possible to enable e-commerce across the continent and help the industry grow.
The other important beneficiaries are digital payments companies and fintech startups. We are already seeing them benefit as they continue to report record profits or raising significant amounts in Venture Capital investments. We can only hope that with new digital payment solutions being born, we will start seeing real financial inclusion as they make previously inaccessible goods and services accessible to everyone across Africa.
🤑 E-commerce is experiencing quite the boom. This is not only so across the world but across Africa too. It’s pretty obvious that the COVID-19 pandemic and its related lockdowns have resulted in consumer behavior changes and more people shopping online. What’s also interesting is seeing countries such as Zambia and Ghana being counted among the top six e-commerce countries across Africa (excluding the North Africa region). The good thing about the growth in e-commerce is that it not only is convenient for the consumers but it is good for African merchants who have generally experienced a drop in sales as more people were forced to stay home. Link
🏢 Plans for a new business and residential complex on land in Cape Town have been approved by the City of Cape Town’s authorities. With Amazon (yes, Jeff Bezos’ Amazon) as an anchor tenant as it plans to set up its Africa headquarters in these offices, the project appears on paper to be promising thousands of jobs. However, there’s one glitch, the land on which the complex is set to be built is sacred to the Khoi and San communities. Specifically, the Khoi and San have argued the land is of spiritual significance as it was a battlefield on which the Khoi defended the territory from Portuguese colonizers in 1510. Link
💳 According to the Visa COVID-19 CEMEA Impact Tracker, contactless payments and eCommerce shopping grew exponentially, with merchants and consumers showing a sustained preference for digital payments. Adoption of digital payments has increased in the past 12 months; the rapid change was experienced during the pandemic where consumers stayed at home due to various lockdown restrictions and merchants were challenged to find new ways of operating. However, across Africa, e-commerce trade remains small and regulations have not kept pace with digital developments. It becomes important for intra-regional trade to fulfill its promise of spurring economic growth. Link
⚖️ According to South Africa’s new Cybercrimes Act, which President Cyril Ramaphosa has signed into law, South African Internet Service Providers are required to report their clients if they commit any cybercrime using their networks. This includes things such as pirating music and movies and any other copyrighted content. South Africa’s Cybercrimes Act also explicitly mentions that theft of non-physical or virtual property must be treated the same as theft of physical property. What is interesting is that this is tantamount to ISPs in South Africa spying on their customers and reporting any “suspicious” activities back to government authorities. Link
☀️ The Government of Kenya recently appointed a task force to look into the contracts of Independent Power Producers (IPPs). This followed a public outcry that the IPPs who run thermal power plants were unnecessarily contributing to the high cost of power. A look at the cost of electricity from different sources in Kenya shows that thermal power plants are expensive. Data from the Energy and Petroleum Regulatory Authority (EPRA) shows that a single unit of electricity from hydropower costs KShs 3.2, while that from thermal power plants costs KShs 18. Link
Thought of the Day
Over and above the e-commerce platforms, the two significant beneficiaries of the spike in e-commerce across Africa are last-mile delivery operators and digital payments companies. (Tweet this | Share on WhatsApp)
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