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CEO Weekends: New age e-commerce consumers challenge traditional business models

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The rise 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.

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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, there was an increase of 49 percent in query volumes in Nigeria, 37 percent in South Africa and 33 percent in Kenya, during 2014.

Charles Brewer, MD DHL Express Sub Saharan Africa, 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.

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“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 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 percent, but that it shows high potential. This is supported by a recent report by McKinsey & Company, which revealed e-commerce could account for 10 percent 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.

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Caroline Vutagwa
Caroline Vutagwahttps://my.techmoran.com
Minding my own business is not enough for me that's why you will always find me minding Africa's Businesses as well as Technology and of course letting you know about it. Talk to me on [email protected]

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