According to a report by ResearchAndMarkets.com, the Africa and Middle East (AME) B2C eCommerce market has seen a significant growth rate of 18% year-on-year (YoY) during the past two years. The market size reached $24.3bn in 2017 and is projected to increase to $48.6bn by 2022. The report analyses the drivers and restraints of the market, as well as focusing on key trends in the industry, both regionally and in individual countries.
The key drivers of the market include growing internet and smartphone penetration, increased disposable incomes, improvements in logistics and the emergence of fintech solutions. Improved internet and smartphone penetration in AME has allowed more consumers access to eCommerce marketplaces. Moreover, with rising incomes, consumers now have more disposable income to spend on online shopping. In terms of logistics, we have seen the growth of new delivery services who specialize in eCommerce fulfillment and offer same-day delivery services in certain areas. Fintech solutions are also driving the market, with digital payment platforms like M-Pesa and Paystack developing to meet the demand for mobile payments.
However, the market faces several challenges, including low levels of financial inclusion and security concerns. Despite the growing use of digital payments, many consumers in AME still remain underbanked, meaning that cash-on-delivery remains a preferred option for many eCommerce transactions. In terms of security concerns, a lack of trust in online transactions and low credit card penetration rates in the region have slowed eCommerce growth.
The report further explores the opportunities in individual countries within the AME region. Some of the largest markets are expected to be Egypt, Nigeria, and South Africa. Egypt has seen a significant growth rate in eCommerce, with consumers increasingly shopping online. The country has a large population of 100 million people, many of whom are becoming more tech-savvy. Nigeria has also seen eCommerce growth, with young, tech-savvy consumers adopting online shopping as a way to access a wider range of goods. South Africa, on the other hand, has a more established eCommerce market, with several major players like Takealot and Superbalist operating in the country.
Overall, the report indicates that the B2C eCommerce market in AME is one of opportunity, with growing technology infrastructure and rising incomes creating favorable conditions for eCommerce growth. However, challenges like low levels of financial inclusion and security concerns remain, and will require continued attention and innovation to overcome.