Understanding e-commerce in Africa: Launch of the Africa Marketplace Explorer at UNCTAD eWeek, 29 April 2020

Opening remarks by Ms. Dorothy Tembo, acting Executive Director, International Trade Centre

There will be much that we as a global community, and indeed us here at the International Trade Centre, will learn from this ongoing COVID-19 crisis. One of the key elements has been that all micro, small and medium-sized enterprises (MSMEs) have been dramatically affected by shortened and disrupted supply chains and drops in demand. But those with a digital footprint have been able to weather the onslaught slightly better.

Before the COVID 19 pandemic, e-commerce was set to reach over $27 billion this year and directly provide over 3 million new jobs in Africa by 2025.  Is this still possible after the crisis? how can e-commerce play a role in the recovery for small and medium sized firms??

This confirms that our work in the recovery period will have to continue to help MSMEs in Africa get onto this digital highway.

This is why today’s session is so important. It is about launching a tool that provides transparency and a one-stop shop for small businesses to better understand and connect to online marketplaces.

Online marketplaces play an important role:

• they are aggregators of demand
• providers of payment solutions
• and facilitators of logistics services

These marketplaces have the power to open the world of e-commerce to the smallest of online traders. There are many success stories of businesses starting in garages finding online success around the world: but Africa has by comparison relatively few and is thought to represent far less than 1% of the world’s e-commerce. Even though I can tell you from direct experience that Africa is one of the most innovative continents with one of the most innovative populations − especially the women!

We want to better understand and support the development of marketplaces small and big (including Africa’s own Jumia represented in this discussion), and to ensure that small businesses are readily able to access opportunities across the continent and beyond.

A couple of recent examples illustrate the entrepreneurial spirit of Africans engaged in e-commerce:

• Samia Ben Abdalla, founder of AwA Bags and jewellery in Tunisia, has sought to address the collapse of sales in her local partner outlets, by shifting her activities online. By reacting quickly enough with promotions, she has generated demand through social media channels from local consumers, keen to purchase gift items for loved ones. She would like to find suitable marketplaces locally and regionally to replace the lost demand from Europe.

• Esthy Asanthe, founder of trading group and online platform OTI in Ghana is witnessing a boom in online demand for personal hygiene products and basic foodstuffs: items that she sources locally and markets online nationally and internationally. Listed on partner marketplaces in and outside Africa, Esthy is highly positive about the potential for e-commerce after the crisis.

But despite these positive recent experiences of some entrepreneurs − most are suffering.

Research firm Statista indicates that e-commerce in Africa has declined in large markets such as Nigeria during the pandemic: neither the general population nor the online marketplaces were sufficiently ready and the immediate economic impact is larger than any boom in online sales.

Data and analysis on local marketplaces is hard to come by or highly incomplete. For entrepreneurs in Africa it is not obvious how to find information on how to sell goods online in a regional or neighbouring country, which marketplaces exist, whether they allow foreign firms and what the access requirements are.

Today we at ITC are launching the Africa Market Explorer that will help businesses find and connect to marketplaces in Africa, provide data to the research community and contribute substance to related policy debates on e-commerce − both at the World Trade Organizaion and at the level of the African Continental Free Trade Area.

In partnership with the Amsterdam University of Applied Sciences and the research team at the Centre for Market Insights we have built a tool, the Africa Marketplace Explorer, that profiles 630 marketplaces in 58 African countries.

This comprehensive set of data – together with a forthcoming publication that adds insights on marketplace accessibility – provides an important contribution for understanding how the development of e-commerce can be supported in Africa.

The Africa Marketplace Explorer is complemented by other tools within ITC’s ecomconnect Programme to equip enterprises with insights into profitable strategies toward e-commerce. The recently launched online network and learning platform, ecomconnect.org, aims to build a significant community of entrepreneurs engaged in e-commerce in developing and least developed countries.

We encourage you to study these tools, provide us with your feedback and even more importantly work with us to build stronger and more inclusive participation in e-commerce in Africa, and beyond.

Thank you very much for your kind attention.

Original Source : ITC News