The growth of Africa’s middle class has created an increasing demand for high quality products and increase in variety that conventional retailers such as malls are struggling to satisfy due to a shortage of these malls, grinding traffic in many cities and the lack of variety in most of the retail shops. These are some of the many other factors that deters shoppers and are making a huge case for e-commerce in Africa.
The e-commerce sector in Africa is still in its infancy. According to a report by consultants McKinsey’s & Company, the internet’s contribution to Africa’s gross domestic product stood at 1.1 percent in 2013, much lower than other emerging markets. But this could rise to 10 percent, or $300 billion, by 2025.
According to WWWMetrics.com, Nigeria and other African countries have seen a growing generation of young, internet-savvy individuals has embraced new, online technology. The International Telecommunication Union (ITU) has documented an increased internet penetration in sub-Saharan Africa. The numbers of users are still far below the world average of around 30%, but are increasing as Africans become more familiar and proficient with online shopping. E-commerce activities have expanded in Nigeria, South Africa and Kenya both due to the proliferation of mobile phones and availability of faster internet networks.
Even as more and more young Africans go online and start using e-commerce sites, Giants such as Amazon and Chinese e-commerce firm Alibaba are out of reach for most consumers. Thus companies which are able to tailor their service to African markets such as Jumia, Rupu and OLX among others are the ones who stand to gain most from e-commerce in Africa.
So, what are some of the ways to that African Online Merchants can boost their sales?
1. Easy, Fast & Safe Delivery
Orders under Ksh 5,000 on Jumia.co.ke carry a Ksh 200 delivery fees, however after making purchases most customers still think paying for deliveries is unacceptable and expect the firm to incur the delivery costs on its own.
2. Payment options
Online fraud has been the greatest challenge for e-commerce sites world wide. That is what gave rise to services such as verisign, Paypal, bluepay, pesapal and others.
As an e-commerce site in Africa, the payment options you choose to adopt on your site will play a huge role in determining its success or failure.
That is why services like Paypal continue to be the most trusted for online payments world wide, this is because the service adds a layer of security that makes users be more comfortable in paying on your site. Paypal is widely recognised as a safe online payment option and users do not have to submit the credit card details to merchants directly.
According to research findings by Northstar, 34% of PayPal EMEA (Europe, Middle East and North Africa) online buyers would have not made the purchase if PayPal had not been available. 22% of PayPal EMEA online buyers prefer PayPal because it’s convenient and 79% of PayPal EMEA online buyers prefer PayPal because it’s secure.
37% of PayPal EMEA (Europe, Middle East and North Africa) online buyers would have not made the cross border purchase if PayPal had not been available. 46% of PayPal EMEA (Europe, Middle East and North Africa) online buyers would have not made a purchase using their mobile phone if PayPal had not been available.
Its important that your site enables people to pay for goods on your site from any location and have you deliver to the recipient anywhere in the world even if the one purchasing is not the one receiving. This means that Africans in the Diaspora can purchase items on your site and have you deliver them to their relatives here in Africa.
4. Invoicing function & Check out Process
PayPal’s Express checkout offers a shorter check out process then most traditional check outs. By providing an optimized checkout process, a merchant can minimize churn rate. In a study we conducted, we actually found that customers are more than twice as likely to complete their order with PayPal than when using other checkout solutions. (source: PayPal Express Checkout Conversion Study, comScore, 2011)
5. After Sale Service
How you handle your customer after they have purchased from your site especially how complaints are resolved can determine if that customer will use your site again. Its important to have a buyer protection policy that details how customers are handled afterwards.
6. Online Optimization
Your site needs to have a very good Search Engine Optimization profile such that, if a user searches for ‘Maasai Shuka’, your site is among the top 5 results on a Search Engine.
7. Enable Sharing
Make is easy for your site users to share their favorite items on social media. This is over and above your own active presence online.