Emerging Markets Offer Highest Growth for e-Commerce, Says Report

By Emma Okonji

A report ‘Shop the World’, released by DHL sub-Saharan Africa, has indicated that  emerging markets in Africa offer enormous growth potential for e-retailers, despite the fact that online shopping is in its infancy in the region.

Analysing the report,  Head of Marketing for DHL Express sub-Saharan Africa, Sumesh Rahavendra,  said,  although global e-retailer Amazon celebrated its 20th anniversary in July, this year, eCommerce companies in Africa are only now beginning to mark and accelerate their presence in the marketplace. “An example is Nigeria online retailer, Jumia, which despite being founded only two years ago, is quickly gaining market share within the country which reiterates the region’s potential,"  he said.

According to Rahavendra, a recent report by McKinsey & Company, also revealed that eCommerce could account for 10 per cent of retail sales in the African continent’s largest economies by 2025. In comparison, online retail in the US already accounts for around 9 per cent of total retail sales.

“Globally, it took over 2,000 years for a formal monetary system to evolve and over 600 years for a formal banking system to be implemented. It has taken over 50 years for credit and debit cards to be introduced and still not every person has a bank account. With all these milestones that have taken place in the evolution of commerce, it goes to show that how we shop online, is still in its infancy”, Rahavendra said.

He cited a recent Jana survey conducted in the continent’s largest economy, Nigeria, which revealed that close to a quarter of respondents, amounting to 23.55 per cent, cited  lack of security as the largest obstacle for buying products online, while 38.81 per cent of respondents prefer the use of cash, compared to 29.52 per cent who believe in credit cards as the payment mechanism they would prefer to use when purchasing goods and services online.
“This highlights that consumers on the continent are still familiarising themselves with the online payment methods,” Rahavendra added.
The DHL Shop the World report revealed that Asia Pacific took centre stage in the global eCommerce market, which is largely attributed to increased access to internet.

“Technology on the African continent is a hindrance in terms of connectivity, but we are noticing a rising trend in retailers growing significantly due to advances in this area,” the report said.
The International Telecommunications Union (ITU) had said in its previous report on Africa,  that 16 per cent of the African population have internet access, up from 10 per cent in 2010.

The 2014 Mobile Media Consumption report by InMobi, which includes data from 14,000 users across 14 countries, including Nigeria, Kenya and South Africa, predicted that 83 per cent of consumers plan to conduct mobile commerce in the next 12 months, which is up 15 per cent from the current figure.
“As technology continues to evolve in the respective African countries, as will the levels of online shopping. It is of our opinion that many African businesses will start to skip the traditional ‘bricks and mortar’ formal retail environment, and instead move straight into online shopping space due to the rise in mobile and internet services within Africa," Rahavendra said.

Culled from: http://www.thisdaylive.com