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Will e-commerce bounce back in Africa?

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 (3 minutes read)

·        Everyone in Africa swears by e-commerce: but the booming
e-retailing, world over run on the back of technology, lacks basic
infrastructure in Africa due to technology gaps and inadequate
consumer base.

·        Africa’s most digitally sound  entity –Nigeria’s Jumia – is a
classic example:  it is the largest e-commerce operator across Africa,
but had to close down operations in Rwanda, Tanzania and Cameroon over
the past year

Everyone in Africa swears by e-commerce. But the booming e-retailing
world over,  run on the back of technology, lacks basic infrastructure
in Africa due to technology gaps and inadequate consumer base.

Africa’s most digitally sound  entity –Nigeria’s Jumia – is a classic
example.  It is the largest e-commerce operator across Africa, but had
to close down operations in Rwanda, Tanzania and Cameroon over the
past year. But now everyone is betting on the new environment dictated
by Covid-19 and is basic stipulations like social distancing, cashless
transactions through digital money to avoid contacts with paper money,
which many fear  would be a conduit for getting infections, may bring
succor to the e-commerce in the continet.

Many predicted e-commerce taking over Africa sooner than expected
thanks to its smartphone penetration. Jumia was ecstatic when
Goldman Sachs and MasterCard have backed its operations.  Riding on
that illusion,  it was valued at over US$4 billion by enthusiastic
investors soon after its successful one billion dollar  IPO. But the
dream did not last long. Soon it realized how difficult it is to hold
on to business in a set up marked by underdeveloped markets across the
continent. Enthusiasm of  a few in the younger age group and some
fashion driven people could not  sustain a business. There should be
mass support and base for the spread of online businesses.

It is reported that some of the e-commerce companies including Jumia
have  witnessed a spurt in online trading thanks to the pandemic. But
experts say, it is too soon to come to a conclusion. The  question is
how long the e-commerce companies wait in the wings to fly in the
continent, which boasts a population of 1.3 billion and a large number
of upwardly-mobile population.

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