Alibaba, “the largest online and mobile commerce company in the world in terms of gross merchandise volume in 2013”, prides itself for making it easy for small and medium enterprises (SMEs) to do business anywhere.
The Chinese ecommerce behemoth delivered 5 billion packages through its logistics partners from transactions generated on its marketplaces – 0.7 billion more packages than UPS delivered globally in the same period.
In Africa, the battle to win the continent’s promising ecommerce marketplace will be fought from West Africa; the most populous region on the continent is home to Nigeria, the largest economy and most populated country in Africa.
Annual ecommerce sales in Africa are projected to hit $75 billion by 2025, according to McKinsey Global Institute.
Companies looking to capture market share will target Africa’s growing urban middle class wielding smartphones. West Africa, the region with the most number of coastal countries, offers access for trade, distribution and internet connection.
In a sample of the African footprint of retail and consumer product companies in Africa, Ernst & Young (E&Y), a consultancy, found that companies such as Nestle, Unilever, Pick ‘n’ Pay, Shoprite, Nakumatt, Tiger Brands and Massmart had a “largely Anglophone bias”.
This “Anglophone bias” is further confirmed by AT Kearney, a consulting firm – 8 of the top 10 African countries on its 2014 African Retail Development Index are English-speaking countries: Rwanda, Nigeria, Namibia, Tanzania, Ghana, South Africa, Botswana and Ethiopia.
AT Kearney, however, notes that capturing these markets will demand patience, hard work and some ingenuity. The opportunities these markets present are up against roadblocks such as regulation, availability of land, distributor and supplier capabilities and ease of imports. This is where ecommerce companies have an advantage over brick and mortar retailers.
In Nigeria, the offline retail market is informal but the retail landscape is fast evolving. Amid the underdeveloped physical infrastructure to support retail, malls and shopping centres are springing up. Online retailers are leapfrogging infrastructural inconveniences offering consumers the opportunity to shop using their smartphones. Nigerians are increasingly buying clothes, shoes, accessories, TVs and iPads online.
Entrepreneurial (and tech savvy) wholesalers and retailers, buyers and sellers can use this ecosystem to trade their goods and services. Though still embryonic, ecommerce in Nigeria is likely to catalyse a nationwide logistics network, opening a route to market for SMEs.
Tayo Fagbule
