E-commerce boost expected in Africa

E-commerce boost expected in Africa

Africa’s favorable demographics, with a relatively large number of young people living in urban areas, may provide an important boost to e-commerce on the continent. With Africa’s middle class growing and with the use of smartphones becoming more popular, selling goods online is bound to take off.

According to a report by Seeking Alpha, highlighting research by Brookings Institute, Africa is adopting new technologies and transitioning from an informal network of roadside markets to a more formal model of traditional retail outlets and e-commerce.

Three large Africa corporations are currently operating e-commerce platforms: Jumia Group, Naspers Ltd. (with a majority stake in African e-commerce platform Takealot) and Rocket Internet, a German company with holdings in several African e-commerce companies. Additionally, several global internet and e-commerce companies have units which operate in Africa.

According to the report, there are still challenges to the growth of e-commerce in Africa. “The poor quality of infrastructure tends to impede the transportation of good and drive up costs. Crime and corruption also present challenges. The African continent is made up of many countries with different languages, culture, and regulations for doing business. Localization may be necessary for e-commerce companies to succeed.”

Further reading on seekingalpha.com

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