E-commerce in Africa: payment trends and top opportunities for this market!

Africa’s e-commerce sector is booming, with a massive consumer market of over 1.3 billion people and growing internet access. Join us in our blog post as we delve into Africa’s e-commerce landscape, uncover industry challenges, explore payment trends, and reveal top opportunities for cross-border e-commerce platforms looking to expand in this dynamic market.

João Paulo Notini
June 19, 2023
6 min read
e-commerce in africa solutions

The African continent has witnessed significant growth in the e-commerce sector in recent years, particularly in the context of e-commerce in Africa. With over 1.3 billion people and increasing internet penetration, e-commerce in Africa presents immense opportunities for businesses to tap into a growing consumer market. 

In this blog post, we will explore the e-commerce landscape in Africa, discuss the challenges faced by the industry, highlight the key trends in payment methods, and identify the top opportunities for cross-border e-commerce platforms willing to start operating or expand their current operations there. 

Sit back and enjoy the reading.

It is time for e-commerce in Africa!

Africa’s e-commerce market is experiencing remarkable growth, reflecting the continent’s rising consumer demand and expanding digital infrastructure. Some key insights about the e-commerce market in Africa include:

  • Successful local e-commerce platforms in Africa include Jumia, Konga, Kilimall, and Takealot. On the other hand, Amazon, AliExpress, and e-Bay are examples of popular foreign e-commerce operating in the continent. 
  • The electronics, fashion, beauty, and groceries sectors drive African e-commerce.
  • Challenges such as limited logistics infrastructure, low financial inclusion, and trust issues pose obstacles to the growth of e-commerce in Africa.

How’s the African online consumer?

Understanding local consumer behavior is critical to any company expanding in the burgeoning African e-commerce market. So, here are some insights that you shouldn’t overlook: 

  • Mobile-first approach: Africa has leapfrogged traditional PC-based internet access and embraced mobile technology, making mobile-friendly e-commerce platforms essential for e-commerce growth in Africa.
  • Price sensitivity: African consumers are price-sensitive and seek affordable products, making competitive pricing and discounts attractive in the African e-commerce market.
  • Local language and cultural relevance: Tailoring marketing strategies and product offerings to local languages and cultural preferences is essential for engaging African consumers in e-commerce companies operating there.
  • Trust and security concerns: Building trust and ensuring secure transactions are crucial for African consumers. Offering secure payment options and robust fraud prevention measures can help alleviate concerns and boost consumer confidence.

Here’s what to expect for the coming years in Africa…

As internet penetration continues to increase and technological advancements unfold, the e-commerce landscape in Africa will evolve and expand further. Some key factors shaping the future of e-commerce in Africa include the following:

  • Mobile commerce: With the growing popularity of mobile devices in Africa, mobile commerce is expected to play a significant role in the future of e-commerce. Mobile-friendly platforms, mobile payment solutions, and innovative mobile-based shopping experiences will drive the growth of mobile commerce.
  • Tech-enabled solutions: Using technology, such as artificial intelligence (AI), machine learning, and data analytics, will enable personalized shopping experiences, efficient supply chain management, and improved customer service in the African e-commerce market.
  • Continued innovation: E-commerce companies in Africa and payment providers will continue to innovate and adapt to the unique needs and challenges of the African market. This includes developing localized solutions, exploring alternative payment methods, and expanding access to e-commerce in underserved regions.

The Opportunity for Cross-border E-commerce in Africa

Despite challenges, the African e-commerce market presents numerous opportunities for cross-border trade. As local infrastructure develops and local consumer income rises, global e-commerce platforms have everything to keep arriving and contributing to this burgeoning market. 

Another key factor contributing to this phenomenon is the African Continental Free Trade Area (AfCFTA) agreement. This agreement creates a single market for goods and services in Africa, so businesses can leverage e-commerce to expand their reach across borders and tap into new countries.

Talking about cross-border trade is worthless if we don’t delve into payments, a serious problem in Africa’s commerce. Considering that 97% of the African population doesn’t have a credit card, as reported by the World Bank, offering alternative payment methods is crucial to B2C and B2B sales there.

Local and alternative payment methods play a vital role in the success of e-commerce in Africa and other emerging markets, such as Latin America. So, here’s what is trending:

  • Mobile money: Mobile money transfers are The most popular payment method in Africa’s digital commerce. Africa accounts for nearly 70% of the volume and more than half of mobile money users worldwide. With one of the highest smartphone penetration rates worldwide, successful mobile money and real-time payment method examples in Africa include OZOW and RTC in South Africa, NIBSS in Nigeria, Pesalink in Kenya, and GHIPSS in Ghana. 

Source: Beyond Borders 2022-2023 study

  • Digital wallets: Digital wallets are also gaining traction in e-commerce in Africa, allowing users to store payment information securely. Some of them are also considered mobile money options. Yet, here are popular digital wallet platform examples: Flutterwave in Nigeria, Cellulant in multiple African countries, and Zoona in Malawi and Zambia

Payment Solutions for e-Commerce Platforms in Africa

As you have seen, alternative payment methods are linked to cross-border trade to promote Africa’s e-commerce market. Global brands can prosper by understanding consumer behavior, addressing challenges, and leveraging innovative payment solutions. 

Yet, doing all that alone is challenging, especially regarding payments. A successful business depends on a top-performance payments partner, and EBANX has what it takes to drive your growth in Africa and other emerging markets.

EBANX’s all-in-one payments platform can onboard sellers internationally, and you can choose your preferred settlement format. You can also establish payouts to your vendors, provide single hybrid transactions, and increase your revenue by enabling a smooth purchase experience for your customers.

Our cross-border model supports multiple African currencies and reduces transaction costs, benefiting businesses and customers. So, here’s a glimpse of what we offer:

  • +100 payment methods: available across 18 countries in Latin America and Africa, including alternative payment methods such as mobile money, instant payments, and digital wallets.
  • Single Transaction: an exclusive end-to-end solution for multiple and mixed operational models. It combines pay-in and payout into one integration and payment processing with domestic and international funds settlement in the same unified transaction.
  • Local support: first-class support to your business 24/7 and in different time zones, and an end-user payment support
  • Payouts: single and mass payouts, including support to micropayments, to pay your suppliers, partners, sellers, etc.

And much more!

It is time for your e-commerce business in Africa with EBANX

Learn more about EBANX solutions for e-commerce

Discover EBANX payment solutions in Africa

Central America: A guide to expand your business

Unlock your sales potential in Central America: the fastest growing region for e-commerce in LatAm
João Paulo Notini
João Paulo Notini
Senior Content Marketing | Cross-Border operations at EBANX

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Our annual study is out! Beyond Borders 2022-2023

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