African consumers are increasingly searching online platforms with commercial intent
CAPE-TOWN, South-Africa,
February 26, 2015/ — Therise of e-commerce on the African continent is changing the face of the
traditional consumer, and brands need to adapt their business models
and strategies in order to remain relevant amongst consumers and avoid a
drop in market share.
Photo Charles Brewer: http://www.p
hotos.apo-opa.com/
African
consumers are increasingly searching online platforms with commercial
intent, which include querying prices of goods, and researching where
products or services can be purchased. According to research by Google
South Africa(1), there was an increase of 49% in query volumes in
Nigeria, 37% in South Africa and 33% in Kenya, during 2014.
Charles Brewer, Managing Director of DHL Express Sub Saharan Africa (http://www.dpdhl.com),
says that understanding your consumer, knowing how to target
communications to them and ultimately deliver what they want, when they
want it, is key to the ongoing success of e-commerce in the region.
“Africa’s
growing middle class is driving consumer demand and in turn, the
e-commerce industry on the continent. As a result, retailers need to ask
themselves if they are ready for this ‘new’ and evolving client base.
Logistically and operationally speaking, businesses will need to shift
from a business-to-business approach to a more business-to-consumer
approach as retailers will now have to meet the demand of transporting
products to individual clients. New structures will need to be
implemented to ensure that the company’s supply chain is agile enough to
respond quickly and effectively to the increased demand.”
Brewer
adds that while there is huge potential for e-commerce in the region,
compared to emerging markets, e-retailing in Africa is still in its
infancy. A recent retailing study(2) conducted by Urban Studies on
behalf of South African Council of Shopping Centres (SACSC), revealed
that Africa and the Middle East’s share of global e-commerce in 2015 is
just 2%, but that it shows high potential. This is supported by a recent
report by McKinsey & Company, which revealed e-commerce could
account for 10% of retail sales in Africa’s largest economies by 2025.
Google also predicts that a massive e-commerce market will emerge in
Africa by 2017 as the continent becomes more familiar with technological
advances.
As
e-commerce gains momentum, it once again highlights the potential for
local retailers and entrepreneurs. A great success story is that of
Bethlehem Tilahun Alemu, who founded soleRebels, a footwear company in
Addis Ababa, Ethiopia in 2005. Within less than a decade, she has been
able to grow her business from an organization of just five people,
producing for her local market, to a global organization of over 300
employees with eight stand-alone stores, serving over 50 countries. The
key to her success in a fiercely competitive retail environment was a
combination of traditional African artisan skills and technologies,
innovative use of local (often recycled) materials, personal drive and
energy, and a global vision.
“This
is just one example of the many opportunities that we are seeing in the
region. In this developing market, the needs of the emerging e-commerce
players have played a key role in our aggressive expansion strategy in
Africa,” concludes Brewer.