According to a report by World Bank, a 10% increase in broadband has correlated to a 1.38% in GDP growth explaining why investors are a-buzz overcountries like Kenya and Nigeria, within the African continent, whose internet penetration is constantly on the rise.
According to Peter Allerstorfer co founder of Silvertree Capital internet penetration brings e-commerce which will soon open up a new shopping experience for Africa’s growing middle class and Allerstorfer states that, by 2025, online retail could account for 10% of retail sales within the continent’s largest economies, which will translate into some USD 75bn in annual revenue.
Despite these exciting prospects, however, many e-commerce Sites are finding it tough to operate within the African online climate. The following five points offer reasons, according to Peter, as to why retailers struggle to move online and one of these is
1. The Right Resources because 72% of consumers state that if Website performance is poor, they are unlikely to complete their transaction. Among these are source of products, Quality control, a studio and warehouse, Online marketing, An online shop, picking and packing, third-party logistics provider, Customer care.
2.Lack Strategic Gaps These have been found to appear in implementation, content management, and transactional processes. In general, there seems to be a poor awareness of best practices when it comes to Website strategy.
3. Walking Out A good customer experience, within e-commerce, is absolutely vital. This is due to the fact that it is so easy and convenient for viewers/users to ‘leave’ – as opposed to walking out . “68% of consumers say that if a Website performs badly or does not match their expectations, they will use an alternative Site.”
4. Inability to Monitor Data Many online retail companies lack knowledge on how to monitor the data available that tracks the behaviour of their customers. They struggle to make this information meaningful in order to bring about improvement. In line with this, retailers are unable to pinpoint problems, solve them quickly, and proactively manage their online service.
5. Lack of Competition Many retailers do not see a priority to move online due to the lack of competition in the online retail market. Merchandisers, in Africa, could not be bothered to go to all the effort of setting up shop online, when their storefront shop is performing perfectly well and the return on investment is more predictable.
This is expected to change soon, however, as online retail competition increases due to the likes of TakeALot.com, Zando, and potential players, like Amazon, entering the market with local distribution. “Although 15% of the world’s population lives in Sub-Saharan Africa, only 6% of the world’s internet users do.”