Online Shopping in Africa-Facts and Figures:

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  • 5 years ago
  • Posted: December 2, 2014 at 12:25 am

Online Africa is growing at a very high rate. The number of internet users on the African continent grew at seven times the global average, hitting a 3,600% growth between 2000 and 2012, to a totality of 167 million users according to data from the International World Statistics, actually as I scribe this, there are over 3 billion humans on the internet right now, which only means about 40% of the world today is connected to the internet. Did you know that the first billion in terms of the number of users was achieved in 2005, whilst the second billion in 2010 and in the year 2014, the third billion was reached? 2014 has seen nearly 75 percent, which is 2.1 billion internet users live in the top twenty countries. You are probably wondering where the remaining 25 percent or 0.7 billion is located; well, they are distributed among the other 178 countries, with each representing less than 1% of total users. This year puts Kenya as having more than 16 million internet users, having a 16% growth in one year and a user growth of over two million, not to mention a 36.70% population with internet, whose population share in world population is 0.63% and internet share is 0.57%. Globally, mobile broadband will grow to 32% by end of this year with a 21% penetration in developing countries. Africa leads in mobile broadband growth reaching close to 20% in 2014, up 2% since 2010. By end of 2014, 55% of all mobile broadband are expected to be in the developing world. In Africa, 20% of Africa’s population will be online, up from 10% since 2010. By year’s end, 44% of the world’s households will have internet access at home. Almost a third (31%) of all households in the developing world will be connected to the internet. In Africa, only 1 out of 10 households will be connected to the internet, however, you should note that household internet access in Africa continues to grow at double-digit rates- at 18% in 2014, more than twice the growth of the world average.

What does that mean for Online Shopping and E-Business in Africa and What can they do?

I am a huge fan of online shopping, not because I am lazy, but because I enjoy it, not to mention I get to do it at the seat of my pants. Don’t get me wrong, nothing can replace the actual physical shopping experience. The growth of online shopping in Africa has been partly due to the dissipating fear of using one’s credit cards online, yes, even when online shopping existed a while ago, people feared to use them online, true and justified. The change is due in fact to such events as faster delivery, easier return policies, and many sites offering free shipping have increased the desirability of online shopping, but the security concerns still remains.

Mobile banking in Kenya, South Africa, Nigeria, Tanzania, and Rwanda is supporting a vastly growing M-Commerce sector by enabling mobile transactions, remittances, and payments, especially with Paypal launching its operations in Kenya. Nevertheless, even with the increased availability of technology, recent research depicts that South African shoppers, this is the largest economy in Africa, have several concerns contributing to the lower levels of adoption. These include that consumers are under the impression that if they don’t have a credit card they can’t shop online even if certain sites offer alternative means of payments. There is the belief of lack of security and potential for credit card fraud. Lastly, that the cost of delivery does not justify the convenience of shopping at home.

Moreover, technological solutions can boost confidence in online shopping by providing secure methods of payment and brisk mode of deliveries. Integration of system platforms can provide the requisite functionality to secure and streamline the entirety of the ordering process. How, you might ask. Well, by enabling the automation of business processes and the synchronizing data between the company’s online store front and it back-end systems, including, ERP, CMP, and Warehouse Management as well as across partner, vendor, an supplier systems, with disregard to where they physically reside (on premise or cyber space), order can be fulfilled more accurately, quickly, and securely.

What business can do also is integrate their M-commerce and E-commerce platforms with third-party systems and services, such as credit checks and exchange rates in a bid to streamline the purchasing procedure. Such aspects as Real-Time integration enables customers to have online access to Real-Time inventories, pricing and have the ability to track their own order status including delivery dates, which ultimately translates into a customer-friendly experience; additionally, real time information flows between suppliers and shipping companies with a business enables immediate shipping from the closest warehouse for maximum optimization of the delivery time. No more is this important as during the holidays where timely delivery is a key functionality.

Businesses that use the online model need to learn to scale up for higher volumes of data. The system integration platforms that we have talked about can also provide the necessary scalability to meet the nascent volumes of online purchases. Overloaded systems can lead to poor functionality performance and complete failures result in loss of business. System delays can cause customers to abandon using the site, and businesses built on e-model cannot afford the loss of traffic. On the hand, to accommodate for the possible growth of traffic, systems need to allow for growth quickly and affordably. Smart integration can include the needed computing power to handle peak traffic flows. Technological scaling is directly proportional to traffic flow. This means, as processing requirements increase, the management system can add to the nodes for higher site output.

Businesses need to ensure that they have robust integration platforms that will not only enable a faster integration between all the applications, services and databases regardless of physical location, through process automation across systems and real-time data availability. Furthermore, they should ensure that the entire system performs optimally. This means that orders are fulfilled efficiently, securely and accurately, eventually resulting in increased orders and reputation.

What is your opinion on the topic?
Stefan Wolf
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