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Monday, February 2, 2015

The Rise of the African Online Sector





The rise of the African online sector

Whilst the digital revolution may have profound effects in terms of its democratizing potential, its influence is still far from equal. Despite the promise of offering information for all, the benefits of the online world still remain in the hands of the privileged few.

However, there are a few signs that this is slowly changing. And none more so than the rise of the African online sector.

At the turn of the century only 0.5% of the sub-Saharan population used the internet. But this figure has leapt to 10.6% this year according to statistics released by the International Telecommunication Union.

Smartphone revolution


One key reason as to why there has been such a jump in internet usage will be the proliferation of smartphones and tablets. Just looking at Nigeria’s mobile phone statistics will illustrate this turn around with only 30,000 users in 2000 compared to 87 million just ten years later.

With smartphones allowing not just one-to-one communication but the power to engage with the internet, this has led to some great African online innovations.

From simple, but highly user-friendly classified listings such as Nigeria’s OLX site to South Africa’s popular Yebo Yes online gaming resource, it’s refreshing to see African brands taking on the local markets with their own locally sourced pools of talent.

E-commerce




And one area that has really taken off in the past few years is e-commerce. Whilst multinational companies such as Amazon have yet to make a presence in these massive emerging markets, there have been some innovative African companies that are keen to take the lead.

Jumia started in Nigeria in 2012 with only three employees but is already one of the largest e-commerce sites in West Africa with a subscriber base of over one million customers.

Such companies are able to respond quickly to the needs of the local market, and offer a convenient way for buyers and sellers to complete transactions with just a click of a button. And with the massive growth of smartphones, it is expected that internet commerce could account for as much as 10% of the region’s GDP by 2025.

Limitations



However, as this emergent technology is still in its infancy, there still remains a few obstacles to overcome.

Key issues amongst these will be government tax policies, cross border regulations, as well as relatively high internet costs and slow connection speeds.

But as these obstacles get ironed out, and developers reach agreement on a convenient and reliable way to pay for goods online, it looks like there is no stopping the African online revolution!

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1 comment:

Alex Sovgir said...

Tried to place my goods on olx and to be honest I liked to jiji.ng much more + more shoppers there =)