How COVID-19 led to a surge in eCommerce in Africa

It’s been a year since the world responded to an onslaught of a deadly coronavirus, which we all came to know as COVID-19, by shutting down international borders and placing restrictions on movement and activities. 

Lockdown and quarantine meant that people had to adapt to a whole new way of life. We worked differently, entertained ourselves differently, and learned differently. As the world’s brightest minds and scientists worked round the clock to create a vaccine for the virus that had now thrown the world into turmoil, the rest of humanity had to also go about figuring out how to continue one of the world’s oldest activities, trade.

eCommerce in Africa

In 2020, The United Nations Conference on Trade and Development (UNCTAD) reported that the number of online shoppers in Africa has increased annually by an average of 18% since 2014. One of the factors responsible for this increase is internet penetration with smartphones over the past decade becoming readily available and affordable for the lower middle class, leading to a growth of eCommerce activities in Africa.

Giant strides made by payment technology companies also helped increase the level of trust in eCommerce, thereby accelerating the rate of activities in the sector. Logistics and supply chains also witnessed a big boom.

On the continent, companies such as Jumia, Konga, Takealot, Kilimall, Souq, Bidorbuy gained widespread popularity, opening markets to millions of people for retailers and shoppers, providing them with merchandise from thousands of retailers, changing the landscape of how shopping is done on the continent. Many may argue however that this is only notable in big cities in the region while the less populous cities haven’t made much headway in eCommerce. 

However, with improvements in logistics, eCommerce companies have created more inroads, expanding the market even farther than readily available in the big cities. Moreover, a peer-to-peer model of eCommerce has grown tremendously over the last couple of years with entrepreneurs using tools like Facebook, Whatsapp, and Instagram to sell products and services while having no presence on eCommerce platforms. For these entrepreneurs, their social media space is also their marketplace. 

Covid-19 and the New Normal.

We spoke to Chinenye, a lady in her mid-20s who said she lost her job as an administrative officer during the pandemic. “My company could no longer continue to pay us as a business for them was slow, so they sacked everyone and left only the MD’s nephew. Before then, I combined my 9-5 with a side hustle I did selling jewellery and fashion accessories as well as bed sheets, duvet, and wallpaper.”

The lay-off made Chinenye take her business more seriously. Rent was almost due and like most adult first children, there were mounting bills at home that she was responsible for. 

“Luckily for me, I had restocked just before I lost my job, and there was a severance package that came with it, I doubled down and bought more items to sell. By this time markets were not allowed to open. Even getting my goods in was challenging and I experienced several delays. But by the time my goods came in, I was selling out very fast.”

Chinenye tells us that her customers were stockpiling the products, paying for them but keeping them with her till a later date, as deliveries weren’t possible because of the lockdown and restrictions.

“My space was getting crowded and choked up, but I didn’t mind. I was selling my goods but I still had to keep them in storage because of the lockdown restrictions. Eventually, when I started sending them out it was cheaper for me. I dispatched in bulk to certain locations at once.”

Another businesswoman we spoke to told us how in light of COVID-19 her idea of business and the marketplace changed altogether.

“My mother left her shop to me when she was going out of the business. She imported and sold textile materials of different kinds. Because of the lockdown, we had to close down the shop for months. At first, I wondered how we will survive without sales. But I belong to a WhatsApp group and a Telegram group and we share secrets and helpful tips on how to make sales and go about our business. It is in one of those groups that I heard of selling online through eCommerce.”

Anike tells us that, when the government eased lockdown to allow markets to open three times a week, she was already so used to selling online and practically selling from the comfort of her bed, that waking up to go to the market was now such a chore.

“When it was remaining 6 months for my rent to expire, the complex sent a letter that they are increasing the rent to 14 million naira for two years. It didn’t make sense to pay that much money for rent when I was getting used to selling online. I told my family I was leaving the complex, but they didn’t like it. Many of my relatives also do business there, and for them, it is a thing of pride to own a shop there, a status symbol. They thought my business was failing because I was leaving the plaza.”

If anything is clear, the pandemic has led people who have shunned technology previously, to embrace it and those already familiar with the depth of opportunities to explore it further.

The number of new businesses registered in the United Kingdom during the pandemic increased by over 2000 from the previous year as reported by the BBC, highlighting a global trend.

High rent costs, an alternative to the traditional marketplace, COVID-19 restrictions, these factors have come together, albeit unwittingly to provide merchants in Africa a new way of doing business. A fertile ground for technological growth that has seen financial technological companies, eCommerce companies, and companies all blossom and grows at a steady pace on the continent is a testament to Africa’s reawakening. By reimagining its marketplace and conducting trade and businesses, Africa is sowing the seed of development in other spheres of its affairs.