A generation of African retailers is exploring how to offer e-shopping and other online services that are often unavailable in traditional retailing, and to get people to shop locally, without relying on an established supply chain.
The trend, spurred by a surge in e-book sales and e-tailing in the past year, is also creating opportunities for African businesses to diversify their business models, boost profits and attract foreign customers, said Nganie Mwende, chief executive officer of e-tailers African e-store, which operates in 17 African countries.
The e-shop, which started as a project by a small group of African entrepreneurs and business leaders, now operates in the capital, Addis Ababa, and is expanding to other cities across the continent, Mwede said.
A growing number of African ecommerce companies have also started to experiment with online shopping, including online pharmacies, travel agencies and online stores.
The number of online-only retailers is on the rise.
“E-commerce is very much an African phenomenon and it is a very big part of the growth story for African companies,” said Erika Cakic, chief operating officer at e-travel agency e-fare.
“This is an opportunity for African retailers and it’s something that has been around for a while.
There is a huge market in Africa and it has become very easy for African consumers to shop online.”
In the coming years, e-retailers hope to expand their business into new markets such as Africa’s booming consumer electronics market and the emerging Southeast Asian market, where e-fitness and health products are selling well.
“We want to do business with people in Africa, but we also want to work with them, especially in the region where ecommerce is booming,” Mwande said.
The challenges include the need to build a robust supply chain and to attract a wide range of potential customers.
But Mwenda says the new e-sellers are also making big strides in attracting African consumers.
“There is an appetite for e-service in Africa right now and the new companies are doing a lot of things to connect people to their product,” she said.
“It’s the most efficient way to do it.”
E-tailer prices and service levels can vary from country to country, with prices at some retailers ranging from as low as $0.10 for a simple cup of coffee to as much as $5 for a bottle of shampoo and conditioner.
And while e-services such as e-health products and ebooks can be expensive, some of the best deals are on e-carts.
“The best way to compare prices is by comparing online prices,” said Tarek Ahmed, a manager at ecommerce consultancy e-market.
“When you go to a store, you get the lowest price possible, and the price is based on how much you can pay with your credit card, and if you can afford it.”
For example, if you go online and spend $300 on a new iPhone X, you could pay $1.50 with a credit card or $2.50 using cash.
That would result in a good deal on the iPhone X. But if you had to pay $300 for a new pair of shoes, you would only pay $15.50 and still be getting a better deal.
“I have seen many times that you need to buy something that is cheap to get the same service, but you also need to get something that you can actually use,” Ahmed said.
But for African etailers, the challenge is in making sure they are offering a competitive price, not just a good price.
“Many African companies do not have the infrastructure to compete with Amazon or eBay,” said Filipe Mendoza, chief marketing officer at online retailer E-commerce store.
“For us, it’s a huge challenge to compete, because we want to offer an even better service and make our products better, better products,” Mendoada said.
“Our business model has changed dramatically.
We need to do things differently and we have to do more business with a higher margin,” she added.
E-tailers are now expanding beyond Africa, offering products in countries such as the U.K., Canada and Spain.
But the e-stores have not yet expanded to the U, U.S., or U.A.E., and their focus is more on expanding their sales through e-mail.
For now, Mwaaba said, they have a lot to do in terms of expanding their business, but they are already seeing signs of success.
“In terms of ecommerce, we are seeing a lot more activity,” she explained.
“Sales have been on a good growth trajectory.
We are seeing the most active customers come from the U., U.R.A., the Caribbean, South Africa, and Australia