E-commerce key to driving job creation in Africa

By: Gugu Mjadu, spokesperson for the 2019 Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS

A new report released by Boston Consulting Group (BCG) has found that online marketplaces could create as many as 3 million jobs in Africa over the next six years. Considering the current state of unemployment in many parts of the continent – particularly among the youth – the healthy development of an e-commerce marketplace will prove to be an important contributor to Africa’s economic growth and job creation in the future.

Speaking in light of Africa Day celebrated annually on May 25th, Gugu Mjadu, spokesperson for the 2019 Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS, believes that local entrepreneurs have a vital role to play in driving the additional economic activity that stands to be generated by online marketplaces.

“We know that the world is becoming increasingly digitised, and for Africa to keep up with the global digital revolution, we’ll need people on the ground who are able to drive innovation in this respect. As each African country’s business landscape is unique, entrepreneurs who are familiar with the distinct characteristics of their respective countries will obviously be best positioned to do this.”

The BCG report suggests that the majority (58%) of these new jobs will be in the consumer goods sector. Already, the continent has experienced aggressive mobile growth, and the number of smartphone connections is forecast to double from 315 million in 2015 to 636 million in 2022, according to recent McKinsey research.

“The growth of mobile phones across the African continent has instantly brought the continent into the digital age, creating an increasing demand for online goods and services. The landscape is therefore ripe for e-commerce opportunity and we encourage entrepreneurs to make the most of this opportunity,” says Mjadu.

She offers the following tips on three areas that will prove vital to entrepreneurs looking to embrace e-commerce in Africa:

  • Logistics

Underdeveloped infrastructure and limited market access poses a huge challenge for distribution in parts of Africa. While online marketplaces solve the issue of people having to get to a physical store, entrepreneurs entering the e-commerce space need to have a clear idea of the logistics involved in warehouse construction and product distribution. The sophistication of Zipline’s medicine delivery service via drones in Rwanda provides many lessons for how the technology can be applied in e-commerce in many parts of Africa.

  • Security

Ensure a secure payment option and shipping strategy: Users need to be sure that the e-commerce site is a safe space to input their personal details. A good option is to use an online payment service which allows businesses to accept credit-card transactions and payments safely, whereby buyers can perform payments directly from their bank account.

  • Privacy

As an online business often calls for buyers to input private data, it is essential to develop a privacy policy which is displayed on the website. This privacy policy should include how the site’s users’ data will be stored, collected and used and should comply with national data protection regulations.

Africa Day, Mjadu says, is a day to celebrate the progress that the continent has made, while contemplating how best to overcome the challenges which lie ahead. “Generating employment is one of these challenges, so the economic potential that e-commerce offers Africa cannot be ignored. Creating employment is a vital component of economic growth, and e-commerce holds one of the keys for doing this in Africa,” concludes Mjadu.

Related posts

Africa on the move – Hogan Lovells returns in person for its 9th annual Africa Forum


Sanlam’s Partnership With Allianz Could Strengthen Its Competitive Position In Africa


Sanlam and Allianz join forces to create African insurance giant

AfricaRisk Management

Allianz Global Corporate & Specialty appoints Damien Liebart Regional Head of Allianz Risk Consulting for Mediterranean & Africa Region