Nigeria, SA, Kenya top sub-Saharan Africa’s e-commerce –Report
The top market contributors to e-commerce in sub-Saharan Africa over the last three years are South Africa, Nigeria and Kenya, Visa said in a report on Sunday.
The report, titled ‘Visa research reveals SA, Nigeria and Kenya are top drivers of e-commerce volumes in SSA’, said Ghana was also showing growth, having replaced Kenya in the top three contributors in 2020.
It said the region might be one of the smallest regions of e-commerce globally, but it showed steady growth potential.
During the lockdown, the region saw new e-commerce users rise by five per cent when compared to the active base in SSA the previous year, it stated.
The Head of Visa Consulting and Analytics in Sub-Saharan Africa, Lineshree Moodley, said, “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.”
According to the statement, Visa’s white paper, entitled e-commerce developments across sub-Saharan Africa, confirmed that as the world became increasingly digital, e-commerce had been driving the acceleration of digital commerce.
It had experienced phenomenal growth rates around the world, and even recent setbacks as a result of the continuing COVID-19 pandemic had not stopped its rise, it stated.
The research paper found that in SSA, cross-border transactions made up half of all ecommerce transaction volumes; e-commerce was driven by retail goods and professional services; mobile phones were the main source of digital access; payment facilitators were a critical catalyst for digital payments; and fraud protection was key to maintaining customer trust.
The statement said that in terms of the merchant categories driving e-commerce, for Kenya and Nigeria, there was 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.
It said in South Africa, professional services and telecom/utilities merchants were the top drivers of e-commerce in 2020.
The report said, “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 had pushed consumers towards digital payments in the key e-commerce markets for SSA, it stated.
It said at a primary level of cash versus digital payment instruments, there had been a strong move away from the use of cash across the board.
The report said this was due to a shift to e-commerce behaviour that was mostly enabled by digital payments and a reduced preference for face-to-face interactions that involve handling common surfaces, such as cash.