27 Jul Online Payment Africa: Which Countries in Africa are Ready for eCommerce and Why

African eCommerce is on the up and up, paving the way for multinationals to sell to the growing African consumer market.  African entrepreneurs have the advantage of leapfrogging their European compatriots as a result of their on the ground knowledge and low cost structures.  The fast track growth of eCommerce businesses throughout Africa supported by governments and development organisations is getting consumers used to transacting online and connecting local mobile payment methods.

There are a number of internet businesses including for example in Nigeria with hotels.ng and jovago.com for accommodation bookings and jobberman.com for jobs.  The big growth is with digital services where there is no need for product to be delivered.  

Bandwidth and internet speeds have improved significantly over the past few years which means that local consumers can now shop for international goods and services on international websites.  Interestingly enough the fastest internet speeds are not the usual suspects like Kenya and Nigeria – the best internet speeds based on a comparison by Netindex are found in Madagascar, Namibia and Seychelles.  This does not necessarily match perfectly to the most economically active and sizeable African markets.

When it comes to internet penetration the highest scores in the 70%s are Madagascar, Mali, Malawi, followed by Morocco, Seychelles, and Egypt.  Our eCommerce and mCommerce favourites Kenya and Nigeria are at 46% and 47% respectively.  

eCommerce entrants can use a set of criteria to evaluate where best an eCommerce office could be located:  Internet speed, Internet penetration, Market size and Internet readiness, eCommerce propensity and linked internet and mobile payment methods.  

Top locations in Africa for eCommerce HQ’s could be  . .  

Nigeria which is a very dynamic ecommerce market with some heavyweight, very successful ecommerce businesses like jumia.com and kong.com.  Nigeria has the population, it has spending power, it has connected consumers, who are used to ordering and transacting online (56%).  When it comes to online payment, Nigeria has a simple low fraud local pin-based debit card solution linked to African Payment Solutions payment gateway.

Kenya is good for internet speeds and penetration and internet ready consumers (56%).  eCommerce awareness in Kenya is high and this is a good hub for East African payment.   Another bonus for eCommerce in Kenya is online payment.  Market penetration of M-Pesa as an online payment method is very high and it is linked to African Payment Solutions for multinational eCommerce companies wanting to sell to consumers in Kenya.

For more companies looking to capitalise on African eCommerce opportunities, African Payment Solutions can advise on online payment methods in each target country.

Our thanks to http://africajumpstart.com/2015/02/24/where-to-set-up-your-african-e-commerce-business/ for their content inspiration