Africans purchase many items from the West online, including shoes, watches, cars, furniture, equipment, books, spare parts, computers, electrical devices, apparel, jewelry, food, and other items. One fundamental reason Africans easily purchase goods from the West is our sense of confidence that the goods are of high quality and will undoubtedly be delivered to us on schedule. The majority of the goods that we Africans order online and have delivered to us from nations in Europe, Asia, America, and Oceania are made by small- and medium-sized enterprises (SMEs) and local manufacturers there, many of which we could easily find here in Africa as better or equivalent alternatives if we look inward and harness our own e-commerce potentials as well.
Determining quality in production, processing, packaging, and logistics as well as creating a highly functional e-commerce platform and delivery system that can accommodate all those who have genuine goods to make and sell in Africa is therefore a clarion cry for we Africans. The nearly 1.1 billion Africans are a potential market for a broad range of goods that can be sold online here in Africa, so this is the way to go.
Africa has the potential to engage in e-commerce and do so successfully, as evidenced by the success so far of e-commerce behemoths like African internet Group (Owners of Jumia) in the continent. However, there are many obstacles to be surmounted if we are to successfully implement e-commerce in Africa.
Although the barriers have always existed, their effects are more noticeable when business transactions are performed and completed online. These barriers include mistrust, a lack of accessibility to internet resources (electricity, computers, smartphones, and internet) by the general public who will use e-commerce platforms (this lack of accessibility is either due to the difficulty in accessing the internet or the high cost of purchasing a computer and an internet subscription). ICT technical know-how at the grassroots level is poor, electronic banking services are inadequate to conveniently capture and process payments online, portal systems are inadequate, road networks and transportation systems are bad, there are not enough preservation and storage facilities for warehousing, agricultural extension services are not adequate for the local farmer and there are not enough open markets.
Inadequate funding for small and medium-sized businesses; low literacy rate and preference for traditional methods of transaction; bad government and government policies; war; and extreme poverty at the grassroots, among other factors, and their impact on prices on the e-commerce store. Despite all the obstacles, however, we observe a number of thriving e-commerce companies, which is a sign that despite the obstacles, Africans can market and sell their products online both within Africa and to the rest of the world.
A practical strategy for positioning micro, small, and medium-sized businesses (MSMEs) in Africa to take advantage of e-commerce’s potential is to build a system that can support anyone who is eager to thrive in e-commerce, regardless of their financial situation. The system’s foundation will be a high-quality product, superb storage, preservation, and packaging, as well as an effective delivery system. The trust and security of money and financial information will be properly handled by this system, which will act as a conduit between buyers and sellers. The system may be applicable to various product groups or just a small niche market. The system may be applicable to various product groups or just a small niche market. A province, a state, a portion of a country, the complete country, a portion of the continent, or the entire continent are all covered by the system.
Such system will consist of mechanisms that will produce and carry out:
- a method for obtaining, packaging, and storing goods from nearby MSMEs, producers, and manufacturers
- a safe and convenient payment method that is available to everyone. Consider a payment system in Africa that is comparable to PayPal.
- a door-to-door delivery method that is effective for a variety of product categories over a range of distances.
THE ROLE OF GOVERNMENT IN AFRICA IN ECOMMERCE DEVELOPMENT ACROSS THE CONTINENT
Additionally, the governments in existence in African nations must be sincere in their efforts to facilitate trade in their respective nations and regions. Micro, small, and medium-sized businesses (MSMEs) require enabling economic policies in order to launch and operate effectively. These MSMEs have the potential to produce the majority of the daily necessities that we use in Africa and other parts of the world, creating more employment, lowering prices, lowering the cost of adopting e-commerce, and many other things as a result. In a nutshell, one of the best ways for African governments to contribute to the betterment of their citizens’ lives is by trying to create an environment that encourages e-commerce to flourish. The government of the nations in Africa need to consult widely to develop systems that will help MSMEs and e-commerce to thrive in their various countries rather than spending large sums of money on palliative measures. Additionally, private investors must understand that there has never been a better moment to invest in developing the systems and solutions that will advance e-commerce in Africa. A common electronic payment system that all African citizens can use, regardless of where they live, is one of the most pressing requirements of the continent’s e-commerce sector right now. This payment system must also be compatible with the majority of local banks in Africa. Africa will benefit greatly from being able to create and sell any goods and services online by significantly reducing its unemployment and poverty rates.
A straightforward e-commerce model that succeeds in developed nations like the USA and the UK involves taking online payments from customers, sending the purchased item to the post office, and waiting for the postal system to transport it to the customer’s door at the appointed time. Only a few African nations can take pride in having a strong postal infrastructure. E-commerce in Africa will be much simpler if the postal network on the region is efficient and connected. MSMEs in Africa need the government’s assistance in this field more than anything else. MSMEs at the local level will use the postal service every single day to deliver goods both within and across national borders, generating income for the government as well.
ELECTRONIC PAYMENT SYSTEM
For e-commerce to take off in Africa at the grassroots level, the continent requires an electronic payment system that functions similarly to PayPal. With a PayPal account linked to your bank account, for instance, the security of account information and refunds in the event of a dispute in a transaction is well covered. As a result, you can make online payments directly from your account as well as receive payments into your bank account from your website with just your email address. With such an online account, any African business owner can connect their online account to their neighborhood bank and use their e-commerce website to easily and safely send and receive payments online. To help advance e-commerce, banks in Africa must step up their dedication to offering effective e-payment systems. If such an electronic payment system is in place in Africa, people can easily set up a mini website to showcase and sell their goods at a low cost even in the absence of a centralized e-commerce system. Individuals and business owners who offer services can also market their products if they have the assurance that they will be paid after the service has been rendered, as is the case with www.fiverr.com. PayPal may have plans to launch a service specifically for Africa, but even if they don’t, the region urgently needs such a project for e-commerce to succeed.
THE ETHOPIAN COMMODITY EXCHANGE (ECX)
The Ethiopia Commodity Exchange, located online at www.ecx.com.et, is a great example of a case study. The Ethiopia commodity exchange is supported by the Ethiopia commodity exchange administration which is further supported by the Ethiopian government. It functions as a warehouse for coffee, grains, and other agricultural products produced by Ethiopian farmers. After that, these goods are handled and kept in accordance with international inventory management standards. From there, buyers of high-quality farm products and those who export them can be sure that their products will arrive in excellent condition. The local farmer in Ethiopia only needs to find the ECX warehouse that is nearest to them and sell their farm products there. This promotes increased regional output, makes the farmers make good profit and thrive.
This system makes it simple and possible for someone to purchase the farmer’s produce from the comfort of his own home without ever needing to encounter the farmer in person. This enables local farmers to ship their products from Ethiopia with little effort on their part. This method is first-rate. Practically speaking, this leads to growth in rural farming communities. To increase e-commerce in Africa, we need to create and support more strategies like this. Eleni Gebre Medhin established the Ethiopia Commodity Exchange in 2012; its website is located at www.ecx.com.et.
AgriProFocus is similar to ECX.
Despite not being a pure e-commerce platform, this company’s primary service includes an online platform with member profiles and resource databases that allow you to access online agricultural product inventories. They serve as a conduit between producers and consumers. Agri-profocus is operating in 13 countries in Africa and South-East Asia as of the time this article was published.
TRAINING AFRICAN BUSINESSES ON E-COMMERCE BUSINESS MODELS
Of course, in order for the entrepreneurs of micro, small, and medium-sized businesses in the different African countries to benefit from e-commerce, they will need practical training and consulting services. In order to educate and support MSMEs on e-commerce, the YEMIPIDAN & CO team aims to collaborate with international organizations, governments, corporations, and individual business owners throughout Africa.