A recent report jointly released by the GSM Association (GSMA) and the UK’s Department for Business and Trade has shed light on the growing impact of e-commerce on micro, small, and medium enterprises (MSMEs) across Africa.
The report, unveiled at the Mobile World Congress in Kigali, emphasizes the potential of e-commerce to boost new markets, profitability, and resilience for MSMEs.
Despite the continent’s progress in improving connectivity and mobile technology adoption among both businesses and consumers, online retail in Africa still accounts for a lower proportion of total retail sales compared to other regions globally.
The report highlights that while the number of online shoppers in Africa is on the rise, there is immense room for growth. In 2022, only an estimated 400 million out of 1.4 billion people on the continent used e-commerce services.
However, market forecasts indicate a promising future with an expected surge in online shoppers to 600 million by 2027 in Africa.
To better understand the dynamics, the report is based on interviews with 1,500 MSMEs engaged in e-commerce in countries such as Egypt, Ethiopia, Ghana, Kenya, Nigeria, and South Africa. The findings also incorporate insights from experts in these countries, as well as Rwanda, Senegal, and Tanzania.
The research aims to provide a comprehensive understanding of the market to help MSMEs harness the digital opportunity while assisting donors and development partners in designing more effective interventions to support MSMEs in Africa.
Among the challenges identified in the report are limited financial resources, a shortage of digital skills, regulatory gaps, underdeveloped legislation, low adoption of digital payments, and logistical complexities, including unreliable delivery systems.
Smartphone penetration remains limited in some areas, contributing to low digital literacy and trust issues in online purchases.
As a response, the report suggests various recommendations to boost e-commerce in Africa, such as offering financial products and reskilling support for MSMEs, improving connectivity, making smartphones more affordable, reviewing and clarifying policies and laws, shifting towards digital payments, and enhancing reliable and affordable delivery and transport systems.
The report also highlights the role of women in e-commerce and suggests targeted interventions to further support their businesses.
Overall, the report underscores the potential of e-commerce to drive digital transformation, cross-border trade, and entrepreneurship in Africa and calls for collaborative efforts to address challenges and promote growth in this sector.
