- E-commerce businesses have taken advantage of lockdowns in Africa to grow their profiles on the continent
- However, they still face limitations in expansion as a number of challenges prevent them from growing
- The challenges include inefficient logistics, informal home addressing systems and uncertainty about the actual size of the addressable market
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A number of African countries adopted lockdowns as one of the strategies to control the spread of the coronavirus.
Lockdowns came with restrictions on human movement as well as the movement of other goods. This led to the expansion of e-commerce businesses on the continent.
Briefly.co.za learned that despite the boom there remain some significant challenges facing the sector in Africa.
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These include gaps in basic infrastructure, a reluctant customer base, inefficient logistics, informal home addressing systems and uncertainty about the actual size of the addressable market.
As per a report by qz.com, this often leads to long-term challenge such as the fate of e-commerce giant, Jumia, in Rwanda, Tanzania and Cameroon over the past year.
Despite a previous $4 billion valuation and support from Goldman Sachs and MasterCard, Jumia continues to struggle to remain on its feet in Africa.
The company reportedly suspended the delivery of all fashion items in South Africa in April 2020.
Meanwhile, lockdowns instituted in Africa are helping to grow preferences for online transactions.
According to Jumia’s Chief Executive Officer, Sacha Poignonnec, the company has reported a spike in both customer and seller interest as demand for groceries and essentials grew four-fold in the first quarter compared to 2019.
Poignonnec is hopeful that ongoing consumer adoption amid the outbreak “will accelerate the long-term shift to e-commerce” among local users.
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