The report uses a new International Trade Centre database of online marketplaces across Africa to examine the extent of e-commerce on the continent.
The report finds ten countries are responsible for 94% of all online business in Africa.
The report recommends countries develop modern, technologically and commercially advanced marketplaces and take steps to “promote innovation, attract investment and encourage competition”.
The International Trade Centre (ICT) has released a report that analyzes opportunities for integrating online marketplaces in Africa with African economies. The report finds an increase in Africa’s use of digital trade in response to COVID-19 restrictions, and emphasizes the “vast untapped potential” of online marketplaces in Africa.
The publication titled, ‘Business and Policy Insights: Mapping e-Marketplaces in Africa,’ uses a new ITC database of online marketplaces across Africa to examine the extent of e-commerce on the continent. Overall, Africa has 631 online marketplaces, which recorded 2.2 billion visits in 2019. In 2019, the total traffic for African marketplaces made up less than 10% of the traffic on Amazon.com. Ten countries are responsible for 94% of all online business in Africa. South Africa, Egypt, Nigeria, Algeria, and Kenya together account for 78% of total marketplace traffic.
Women must have more access to payment solutions for e-commerce to develop in Africa.
The top challenge in accessing a marketplace is that it is often available only to sellers in certain locations, the report notes. The largest and most active sites are typically only present in the most advanced, biggest economies, rather than being widely available. The report finds, for instance, that only three of the ten international marketplaces analyzed are open to sellers from over 50 Africa countries.
Other challenges for online marketplaces include limited internet access in rural areas, differing business environments from county to country, and the small size of African marketplaces by global standards. In 2017, for example, only 30% of Africans could go online. Further, 60% of Africans use cell phones to get online, and online payments typically require bank accounts and trust. In addition, women are typically the primary purchasers in their households but they are less likely to have a bank account or access to credit cards and mobile money. The report emphasizes women must have more access to payment solutions for e-commerce to develop in Africa.
ITC Executive-Director, Pamela Coke-Hamilton, said the report “helps confirm the vast untapped potential of African e-commerce.” She emphasized the potential for online marketplaces to provide opportunities to invigorate trade across Africa and promote small enterprises. Cole-Hamilton said “negotiations on e-commerce and digital trade under the African Continental Free Trade Agreement have been fast-tracked,” and expressed support for making e-commerce in Africa inclusive and accessible.
For e-commerce to advance in Africa, the report recommends countries develop modern, technologically and commercially advanced marketplaces. The report suggests countries take steps to “promote innovation, attract investment and encourage competition,” and upgrade the quality and reach of e-commerce by improving internet access, commercial infrastructure, and financial systems. The report recommends policymakers invest in technology and help develop cross-border e-commerce. It further recommends e-marketplaces help African entrepreneurs attain the know-how to participate in the marketplaces, including through classroom-based training and online courses to teach entrepreneurs how to use their services. [Publication: Business and Policy Insights: Mapping e-Marketplaces in Africa] [Report Landing Page] [ITC Press Release]