E-commerce is really young in sub-Saharan Africa yet it is showing enough potential as the growing young population are getting comfortable with ordering products online than going to a physical shop.
The e-commerce sector in Africa generated $16.5bn in revenue in 2017 according to Statista. The research firm currently predicts that revenue in the sector will reach $27.7bn in 2020 and rise to $47bn by 2024.
The main driver for ecommerce in Africa is fashion and cosmetics. According to Statista, ecommerce revenue grew at $8.3bn in 2020 and at a rate of 14.2% between 2020 and 2024.
This will be a great time to create an online store for your business if you do not have one. See below some recommendations I will make for first time founders planning to build an ecommerce store.
1. Operating an all exclusive online shop in Africa has many challenges as clients will mostly ask to see the product. There is a general lack of trust on the continent that you are not likely to get what you ordered for, which to me is very unfortunate. In order to avoid this problem, get a physical shop or agree with a shop owner to display your products in his or shop. The plan will be to gradually onboard people to your online platform. At this point, you would have already built trust as more people will begin to know your kind of product and therefore would not need to physically see a product before buying. These customers will be your first marketers. Use them to capture the attention of other customers. Use their reviews in many formats on your online store.
2. Another way to get physical presence for your products is to get them in third party retail shops such as shopping malls, businesses related to your type of products like selling snacks in a food restaurants. You are doing this to create trust that your products are the same as people see on your online shop. Your ultimate plan is to generate enough revenue to create your own shop or to use reviews from previous customers to transition to a full ecommerce business.
3. Open a shop on a marketplace. Please!!! do not shy away from this even though you have to carefully choose which platform. Look for a third party website operating in the market you want to go and make sure to gather enough data to help you build your own website.
4. If your goal is to learn through the process, then you may have to research and decide to sell goods which naturally move very fast. Some products do faster than others. Products like hair, tea, food, fashion, etc do faster than others like home decor. To be successful, you need to choose fast moving products. From what I have learnt over the years, I know that the type of product matters a lot.
5. Choose a developer who knows and understand ecommerce. Let him or her show you what was done previously. Ask questions about what can go wrong. This type of relationship will help you avoid a lot of mistakes.
6. If you have to do this yourself, then you have to include a mentor. You need to look for someone who successfully runs an ecommerce website and is doing quite well. Involve him or her in your decisions to receive guidelines esp if you are new. Selah.