Online shopping ‘vital to African boom’



JULY 03 2013

E-COMMERCE in Africa has grown dramatically over the past year, and is poised to support the massive consumer boom on the continent, according to Robin Philip of payment services provider PayGate.

Online shopping is a global consumer trend and it is anticipated that affordable tablets and smartphones would accelerate the uptake of services in markets where the group had a presence.

Media and internet group Naspers has identified the e-commerce sector as one of its growth areas and said last month it would focus on growing its existing e-commerce business through bolt-on acquisitions and organic growth.

While SA is ahead of some African countries, the e-commerce market is still far from mature but growing rapidly with between 30% and 35% growth during last year, said Brendan Peo, chief operating officer at Vaimo.

But the growth in internet connection and users will also boost Africa’s e-commerce growth. SA’s internet economy has been growing over the years, in part because of the surge in online shopping.

“A year ago we said e-commerce in Africa wasn’t ready for take-off yet, largely because there weren’t enough acquiring banks to make the ecosystem work. The lack of business infrastructure was a real brake on development. But things have changed very fast,” said Mr Phillip.

Established banks in many African countries now have a much better understanding of e-commerce, and an appetite for it, he said. “There are now many more acquiring banks in key African countries than there were a year ago, especially in Nigeria, Kenya, Mozambique, Tanzania, Rwanda and Namibia.

“A year ago it was about which banks were going to take the lead when it came to accepting online payments, and whether the returns were going to be worth the costs. But we have learned how to make a clear business case for these markets, and the links are coming. Once a bank is open for e-commerce business, they can attract a lot of business.”

Mr Peo said for e-commerce to flourish, internet access should be more accessible, more affordable and faster. “Since a very large portion of South African internet users mainly access the internet and sites on their mobile devices, a few things around mobile need to be done and promoted to encourage more online purchases on mobile devices.”

He said bigger brands and established retailers need to make sure their mobile strategy is in place, that they offer a great user experience, and that the mobile payment methods are secure.

“Any business websites should and will eventually offer some type of commerce. This type of thinking should be taught at classroom level across all web-development courses,” he said.

A study published recently by MasterCard showed 91% of South Africans who shop online are happy with their overall experience, a four-percentage-point rise from the 87% who said the same thing in last year’s survey.

“This bodes well for small to medium enterprises entering the online market, as an increase in internet users will not just benefit the larger online stores, but ultimately spill over into smaller e-commerce sites as well,” said PayU CEO Mark Chirnside.

Link to the article:

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s