FEATURE Many rivers to cross Multiple barriers to more widespread e-commerce adoption remain, including: <strong>The</strong> cost of broadband; logistical difficulties; competition from street markets; and inadequate literacy rates. <strong>The</strong>se barriers are having a palpable effect – while Konga has faded following the aforementioned acquisition, its former rival, Jumia, is also showing signs of struggle. Towards the end of 2019, it withdrew from Cameroon, Tanzania, and Rwanda, and now has operations in only eleven countries – less than half of its peak. “It’s a continuity of recent changes,” observed a stoic Sacha Poignonnec, Jumia’s co-founder and co-CEO, in the Financial Times. “Sometimes we make decisions to change the scope of countries or categories.” “It is in the normal life of a company to adjust the focus, but the strategy remains very much the same.” Affordability presents one of the highest hurdles for e-commerce, even in a consumer market that is showing the growth detailed last issue. Quartz’s Yomi Kazeem notes that “shoppers in Africa’s developing markets typically have less disposable income for online purchases,” citing data from Hootsuite showing that in South Africa (the continent’s biggest online spenders) the average spend is “nearly $400 (€350) lower than the global average.” A massive part of the problem is trust. “<strong>The</strong>re are lots of security concerns about buying things on the internet and keeping data via the internet,” the Uptime Institute’s Lilia Severina told African Enterprise. As a result of these concerns, many shoppers refuse to pay for items until they have been delivered – and in some cases, opened, plugged in and tested. Some sources even report consumers ordering goods they have no intention of paying for – just to see if they’ll actually be delivered. For many, this distrust is the legacy of historic phishing scams, but for others it is due to failings of the traders themselves. “I don’t think the businesses place enough emphasis on trust and ensuring customers get value,” Odunayo Eweniyi, co-founder Multiple barriers to more widespread e-commerce adoption remain, including: <strong>The</strong> cost of broadband; logistical difficulties; competition from street markets; and inadequate literacy rates. FEATURED A R TIC L E of Nigerian savings app Piggybank told Quartz. “I order things from abroad constantly and they almost always arrive before the estimated delivery date but in Nigeria, they treat estimated delivery dates like a suggestion.” It is not entirely the fault of businesses though; many shoppers simply don’t have sufficient faith in Africa’s logistics infrastructure to make e-commerce a viable reality. Kazeem writes that spending levels currently reflect “question marks lingering around logistics and last mile delivery problems”, particularly highlighting Jumia’s struggles to overcome “several fragmented markets that remain largely underdeveloped with respect to digital payments, delivery, and logistical infrastructure.” “Logistics is obviously a big challenge for whoever knows Africa,” conceded Poignonnec in a 2019 McKinsey interview. “In Africa, there’s no address system in most of the cities. For example, if you say in a city in Africa, ‘I live in the third street by the church with the blue door’, that’s the address.” <strong>The</strong> lack of addresses becomes more of an issue the further out of Africa’s main cities you go, which lends credence to the work of companies like Copia Global in overcoming this problem however possible. Meanwhile, various e-commerce businesses have been working on solutions to another challenge – payments; in 2019, according to Nicolas Goldstein, 90% of online purchases were paid in cash. “A significant share of the African population remains unbanked, as affirmed by the International Monetary Fund’s estimate that only 20% of the population have a bank account” wrote <strong>The</strong> Asian Banker’s Faith Masekesa. “In developed countries, a large proportion of payments for online purchases are done using bank cards but this payment channel is not optimal for Africa.” Kazeem corroborates this, explaining that many early attempts to process payments online resulted in error messages and glitches – a frustration that “occurred frequently in the early days of Nigerian e-commerce” and “helped fuel scepticism in a society already distrustful of internetbased business.” 8 <strong>Issue</strong> <strong>333</strong> August 2020
You can contact <strong>The</strong> <strong>Recycler</strong> via Twitter at @<strong>Recycler</strong>Media GOGREEN! REACH READY 20 05/20 <strong>Issue</strong> <strong>333</strong> August 2020 9