COVID-19: Report shows lockdowns in Africa are growing e-commerce businesses

COVID-19: Report shows lockdowns in Africa are growing e-commerce businesses

- 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.

Information available however shows that some challenges have mitigated against the growth of the industry.

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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.

Per 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.

YEN.com.gh understands 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.

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

In other news, Jumia has offered the support of its integrated ecosystem which includes a marketplace, logistics and online payments to governments in Ghana and other countries in Africa, as part of the global action against the COVID-19.

“We are proud to partner with relevant authorities to help fight against COVID-19 and support our communities which continue to support us. E-commerce platforms like ours, with e-payment and last mile delivery capabilities, are uniquely positioned to be part of Africa’s response strategy to this pandemic and we are swiftly taking actions. Our Jumia Heroes - delivery and warehouse operations staff - are at the frontlines taking all necessary precautions to ensure our customers receive their orders safely”, said Diana Owusu-Kyereko, CEO of Jumia-Ghana

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