From Origin

Connecting the dots in Africa

The online retail ecosystem pre- sents an important opportunity to African businesses; however, more must be done to ensure the consumers’ experience is rewarding thus ensuring they will return. Additionally, the importance of securing the e-commerce en- vironment has never been more important than today, with the increase in cybercrime.

With the proliferation of smart mobile devices, the rapid expansion of Africa’s in- ternet connectivity footprint and the rising adoption rates of cloud-based services – digitally savvy consumers across Africa can research products, compare pricing online, watch reviews and ultimately make their purchase more quickly than ever before.

Africans are more connected and are demanding better customer service, more access to a wider range of product and so- lutions and are not afraid to voice their opinions. It is an exciting time to be an e- retailer, as long as you have a plan to avoid the pitfalls and capitalise on the myriad of opportunities.

With the e-commerce market in Africa forecasted to grow to US$ 50 billion by 2018, the true potential of the online environment remains largely untapped on the continent, especially considering that seven of the 10 fastest growing internet populations in the world are in Africa.

Besides connecting more consumers to the global tribe, the online sector is pro- viding entrepreneurs with viable business opportunities that can develop new jobs, reducing the region’s unemployment rate. African products have never been more in demand, and there has never been so much focus on local talent, ideas and start-ups.

Recently Mastercard announced a new e-comm payment solution that will remove the need for courier companies to double up cash handlers; rather, consumers can pay directly on the e-comm portal, funds are put on hold until delivery is made and the consumer is satisfied with their purchase. The funds are then released to the e-retailer, immediately reflecting in their bank ac- count. Simply approach, but the solution is helping to overcome a big challenge.

The solution was developed in partner- ship with NetPlus, a technology start-up based in Nigeria who were handpicked by the Mastercard Start Path initiative to be the very first start-up to benefit from the programme and from the interaction with Mastercard.

Embracing digital solutions

With almost 85 percent of retail transactions worldwide still being done in cash, there is significant opportunity for growth of digital payment solutions. Governments in Africa are eager to partner with the private sector to develop cashless policies and solutions that will meet the growing needs of their citizens – whether a farmer in Nandi Hills who would like to sell their tea crops online or a tech start-up in Lagos.

E-commerce is no longer seen as a plat- form for specialised retailers, it is also open- ing up doors for business owners working across the spectrum. Growth, however, is slow, due to challenges with delivery logis- tics, consumers’ willingness to trust e-com- merce and the general lack of understanding of the true potential from both the consumer and businesses.

Overcoming challenges hampering growth

Broadband connectivity isn’t the only struc- tural challenge facing Africa, with logistics including unreliable postal services and frequent electricity outages also being a major obstacle to overcome.

In Africa, between 65 to 95 percent of all e-commerce payments are still made in cash, this is incredibly inefficient. Cash on delivery causes major headaches for busi- nesses – from cash handling issues to cash flow. Consumers are inconvenienced given that coordinating delivery can be challeng- ing, and holding on to large amounts of cash puts them at risk of theft.

Digital solutions offer the user more control, they can pay the exact amount and do not have to worry about having the correct amount or receiving change back from retailers. Not to mention the layers of protection. Education is needed, consumers in Africa are not savvy enough – they need to welcome technology and not be afraid of integrating it into their lives.

Consumers are still hesitant to pay online with a large drop off at the point of check out. Jumia is working with Mastercard to drive cash out of the online retail sector and provide a more secure and conveni- ent way for consumers to shop online via the Mastercard Payment Gateway Services solution – a tool that will build a stronger, and more intuitive online offering.

Utilising banking trends to expand the e-commerce sector

Mobile banking in Africa has seen more growth than traditional banking, enabling previously unbanked consumers to trans- act in ways never seen before. Consumers are more connected and willing to try new technology solutions, and with mobile pen- etration at over 85 percent and nearly half a billion Africans subscribing to mobile services, it is clear that this platform must be taken seriously by businesses wanting to include an e-commerce platform.

What’s more, mobile services in e-com- merce have the power to remove the need for merchants and consumers to physically in- teract, opening the door for better and easier ways to connect digitally given geographic challenges. This removes the need for physi- cal retail outlets, and also helps expand the possibilities of online services – including e-learning, e-entertainment and so forth.

The opportunities are endless. It is all about framing the challenge differently to identify them.

Boosting the interest in technology, and the link to connecting more Africans

There are millions of prospective e-com- merce consumers and potential employees on the continent who do not benefit from access to digital solutions or services. To overcome this challenge, the African pub- lic and private sectors must invest more resourcing in driving interest among the youth – with specific focus on young girls. A career in technology is something many young African’s do not consider, as they believe it is out of reach.

A stand out initiative by the World Bank is the STEM (science, technology, engineer- ing, and mathematics) initiative driving education across the continent, which is aimed at bridging the skills gap.

Mastercard is working alongside Youth for Technology Foundation in Nigeria to focus on boosting not only financial literacy skills of young women wanting to break into business, but also focuses on training young girls who are eager to explore a career in technology and innovation. Additionally, the Mastercard Girls 4 Technology platform is helping to spike interest in technology around the world, ensuring that there is a healthy flow of talent into the sector.

Without fresh talent, excited to make significant contributions, all aspects of the technology sector will suffer. African lead- ers, consumers, business owners and anyone invested in growing the continent needs to have a long-term view, a vision to ensure efficiency, transparency, connection, talent development and support of new ideas and technology solutions. n






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