E-Commerce Activity In Africa Still Low Compared To Other Regions – GSMA Report

The recent report by the GSM Association (GSMA) and the UK’s Department for Business and Trade sheds light on the impact of e-commerce on micro, small, and medium enterprises (MSMEs) in Africa. While the potential for growth is evident, the continent lags in fully leveraging the e-commerce opportunity. The report, launched during MWC Kigali, unveils insights from interviews with MSMEs and experts across various African countries.

Challenges and Opportunities

Limited Adoption and Connectivity

Despite improvements in connectivity and mobile technology adoption, only 400 million out of 1.4 billion Africans used e-commerce services in 2022. The sector faces challenges such as limited smartphone penetration, low digital literacy, and concerns about online product quality.

Barriers to Growth

  1. Financial and Digital Skills: MSMEs struggle with limited financial resources and digital skills.
  2. Regulatory Gaps: Regulatory challenges hinder the growth of the e-commerce sector.
  3. Digital Payments: Low uptake of digital payments poses a barrier to e-commerce expansion.
  4. Logistics Challenges: Challenging logistics and delivery impact the efficiency of e-commerce.

Recommendations for Boosting E-Commerce

The report presents actionable recommendations to overcome these challenges and boost e-commerce in Africa:

  1. Financial Support: Provide financial products and reskilling initiatives to help MSMEs adopt e-commerce.
  2. Connectivity Improvement: Enhance quality connectivity, especially in rural areas, to reach a wider audience.
  3. Affordable Smartphones: Implement interventions to make smartphones more affordable for wider adoption.
  4. Policy Reviews: Review policies and laws to offer better protection to consumers and clarity to businesses.
  5. Shift to Digital Payments: Encourage a shift from cash on delivery to digital payments for more efficient transactions.
  6. Reliable Delivery Systems: Develop more reliable and affordable delivery and transport systems.

Empowering Women in E-Commerce

The report emphasizes the role of targeted interventions, including upskilling, to support women entrepreneurs who often rely on social media for business promotion.

Advertisement

Insights from the Industry

Daniele Tricarico, Senior Director, Central Insights and M&E

“E-commerce adoption is growing, and market forecasts suggest that there will be almost 600 million online shoppers in Africa by 2027. Our objective was to understand pain points and opportunities through an MSME lens. We also wanted to highlight how MSMEs can be supported in adopting e-commerce as a key driver for operational efficiency and business growth.”

Jamila Saidi, Head of Digital Commerce at the UK’s Business and Trade Department

“Africa continues to harness the power of technology and drive digital transformation; it will undoubtedly contribute to the advancement of e-commerce, cross-border trade, and digital entrepreneurship on a global scale. We’re excited to be partnering with the GSMA on this important research that sheds light on the e-commerce opportunities for female entrepreneurs and MSMEs on the continent as well as the challenges they face and how some of the key barriers can be addressed.”

Advertisement

Philip Lucky, CIO of the Rwanda Development Board

“Technology and services are at the heart of Rwanda’s ambitious drive to reach upper-middle-income status by 2050. Over the past two years, we have passed 19 laws to strengthen the regulatory environment, enabling, among other things, companies to set up here in any form they’d like.”

Conclusion

As Africa embraces technology, digital transformation, and digital entrepreneurship, the potential for e-commerce growth becomes evident. The recommendations provided in the report offer a roadmap for overcoming challenges and unlocking the full potential of e-commerce, contributing to the economic advancement of the continent. Download the full report here.

Also Read: AfricArena Tunisia Summit Celebrates Technological Advancements