Coronavirus: E-commerce businesses emerge huge beneficiaries of lockdowns in Africa

Coronavirus: E-commerce businesses emerge huge beneficiaries of lockdowns in Africa

- E-commerce businesses have taken advantage of lockdowns in Africa to grow their profiles on the continent

- However, they still face limitations in expansion as a number of challenges prevent them from growing as desired

- The challenges include inefficient logistics, informal home addressing systems and uncertainty about the actual size of the addressable market

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A number of African countries adopted lockdowns as one of the strategies to control the spread of the coronavirus.

Lockdowns came with restrictions on human movement as well as the expansion of e-commerce businesses on the continent.

The information available, however, shows that some challenges have mitigated against the growth of the industry.

These include gaps in basic infrastructure, a reluctant customer base, inefficient logistics, informal home addressing systems and uncertainty about the actual size of the addressable market.

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According to a report by qz.com, this often leads to long-term challenges, such as the fate of e-commerce giant, Jumia, in Rwanda, Tanzania and Cameroon over the past year.

Legit.ng gathered that notwithstanding a previous $4 billion valuation as well as support from Goldman Sachs and MasterCard, Jumia continues to struggle to remain on its feet in Africa.

The company reportedly suspended the delivery of all fashion items in South Africa in April 2020.

Meanwhile, lockdowns instituted in Africa are helping to grow preferences for online transactions.

According to Jumia’s Chief Executive Officer, Sacha Poignonnec, the company has, however, reported a spike in both customer and seller interest as demand for groceries and essentials grew four-fold in the first quarter compared to 2019.

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Poignonnec is hopeful that ongoing consumer adoption amid the outbreak “will accelerate the long-term shift to e-commerce” among local users.

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The growth in e-commerce across Africa is not also lost in Nigeria. As Legit.ng reported earlier, in the light of the crash in oil prices, the country has recognized the timely opportunity for a future in the digital economy.

The oil price crash has already forced the federal government to slash the 2020 budget. This made President Muhammadu Buhari charge the minister of communications and digital economy, Isa Pantami and others to develop a policy for Nigeria's digital economy post-COVID-19.

To assist the country in its quest to turn to the digital economy for survival, Microsoft, the American multinational technology company, has listed key recommendations for the Nigerian government.

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Source: Legit.ng

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