In the news

Most Read

  • Telkom CEO Sipho Maseko to step down
    Telkom has announced that its CEO and executive director Sipho Maseko will step down on 30 June 2022. The telecoms company said the process to appoint a successor is well underway and a designated group CEO will be announced in the not too distant future.
  • How cooking oil brought a moment of joy during a dreadful week
    It is possible that cooking oil prevented more looting in South Africa in the last week than the president, the ANC, the intelligence community, the army and the police combined. This, without question, says something about the versatility of the product. It says even more about the state of the state. When you are shown up by canola, you might want to revisit your strategy. By Howard Feldman
  • Park Advertising launches digital performance unit, Lucid Media
    Performance Media across Search, Social and Programmatic platforms is the single fastest growing area of digital media in South Africa. Combine that with the detailed analysis of campaign management, tagging and ad operations, and it becomes apparent that these highly specialist functions require a highly specialised unit.
  • Transnet hit by cyberattack - Operations disrupted nationwide
    The Transnet Port Terminals website has been hacked, implying that all companies under Transnet have been affected. All Transnet websites were down at the time when reporting was done for this SA Trucker article. The publication cited sources who requested to remain anonymous because they are not allowed to speak to the media.
  • #BehindtheBrandManager: Meet Tamsin Darroch of Kellogg's South Africa
    Few food brands have the historical connection with consumers around the world as Kellogg's does, having held meaning at the breakfast table for over a century. By Lauren Hartzenberg
  • Business unusual for small enterprises on the road to recovery
    The Covid-19 pandemic has hit South Africa's small business sector hard and there are grim statistics to bear this out. Those statistics will not be repeated here. After all, if you are a small business owner setting out on the road to recovery, the last thing you probably want is more details of the toll the pandemic has taken on small enterprises. Far more useful would be some good, solid tips on how to build back better after any business setbacks. By Ameen Hassen
Show more
Advertise on Bizcommunity

Subscribe to industry newsletters

SA, Nigeria and Kenya driving e-commerce volumes in Sub-Saharan Africa

The top market contributors to e-commerce in Sub-Saharan Africa (SSA) over the last three years were South Africa, Nigeria and Kenya, with Ghana also showing growth, having replaced Kenya in the top three contributors in 2020. This is according to a recent white paper released by Visa titled 'eCommerce developments across Sub Saharan Africa (SSA)'.

Getty

According to Visa, SSA may be one of the smallest regions of e-commerce globally, but it shows steady growth potential. During lockdown the region saw new e-commerce users rise by 5% when compared to the active base in SSA the previous year.

“The three leading markets in SSA are starting to mature, providing the region with an established foundation and, when twinned with the growing penetration of e-commerce, it offers players in the payment space an opportunity they can capitalise on while helping to further accelerate the expansion of e-commerce in the region,” explains Lineshree Moodley, head of Visa Consulting and Analytics (VCA) in Sub-Saharan Africa.

The Visa report confirmed that as the world becomes increasingly digital, e-commerce has been driving the acceleration of digital commerce. It has experienced phenomenal growth rates around the world, and even recent setbacks as a result of the continuing Covid-19 pandemic haven’t stopped its rise. In fact, according to recent GroupM estimates, e-commerce sales are projected to grow to $7tn across the globe by 2024.

African countries reach tipping point for e-commerce adoption - PayU data

South Africa's m-commerce up 35%, Nigeria is Africa's biggest e-commerce market, and Kenya primed for massive growth...

29 Apr 2021


The Visa research paper found that, in SSA:

• Cross-border transactions make up half of all e-commerce transaction volumes
• E-commerce is driven by retail goods and professional services
• Mobile phones are the main source of digital access
• Payment facilitators are a critical catalyst for digital payments
• Fraud protection is key to maintaining customer trust

In terms of the merchant categories driving e-commerce, for Kenya and Nigeria, there is a steady dedication to service-based merchants with a strong spread across services categories such as professional services, education, government, and business-to-business merchants. In South Africa, professional services and telecom/utilities merchants were the top drivers of e-commerce in 2020.

Payments methods


The most important e-commerce enablers – the ability to access financial services, digital payment channels and digital infrastructure – are starting to take hold across SSA. Although cash may remain the dominant payment instrument in the region for now, there are signs that this will eventually change. In Nigeria, for example, cash is still particularly prevalent, while in Kenya mobile money is most popular and many South Africans choose cards as their main payment methods.

The Covid-19 pandemic has pushed consumers towards digital payments in the key e-commerce markets for SSA. At a primary level of cash versus digital payment instruments, there has been a strong move away from the use of cash across the board. This is due to a shift to e-commerce behaviour that is mostly enabled by digital payments and a reduced preference for face-to-face interactions that involve handling common surfaces, such as cash.

When exploring digital payments usage, the use of cards has increased across the continent, with the highest uptick taking place in Kenya. However, the nature of this usage is interesting. There has been a strong preference for contactless payments, a notable point for enabling safe card payments on delivery, as well as in the use of e-wallet services, as cash is seen as a vector for the virus.)

Why SA's largest grocery consumer market still isn't shopping online

Most South Africans do not shop online due to high levels of poverty, high data costs and poor infrastructure, digital inequality, and the impracticality...

By Semona Pillay 21 May 2021


With these realities, how can payment industry stakeholders and merchants capitalise on these opportunities, to sustain the growth of e-commerce in the region?

Aldo Laubscher, country manager at Visa South Africa, says that it is important that e-commerce platforms are designed with end-to-end mobile enablement in mind, and that online payments provide a strong user experience that is secure and appears seamless to the customer, both for local and cross-border transactions.

“Customers in SSA are making use of a wide range of digital payment instruments, so it is becoming increasingly important that e-commerce offers multi and even omnichannel experiences. At Visa we continue to work with traditional and new financial services companies to develop new products and capabilities that deliver on this.”

Visa notes that as domestic e-commerce provision in SSA is continues to grow, there is an exciting opportunity for SSA to develop its own regional e-commerce platforms and sustain growth, while increasing the continent’s connection to the rest of the world.
Comment

Let's do Biz