Why Are Ecommerce Giants Like Amazon and Alibaba Still Missing From West Africa?
Local retail is booming in West Africa, and a number of eCommerce giants are missing out on the opportunity. Get your products to market faster using West Africa's best eCommerce platforms.
What is why Amazon and Alibaba have a low presence in West Africa? The question comes up quite often in discussions on the continent. It seems legitimate when the world witnesses a fast development of eCommerce, and the region is well-known for its commercial potential. It has been proven that eCommerce has significant potential for growth in Africa. However, substantial barriers to eCommerce development on the continent remain, the most important being cybercrime, a poor legal framework to support eCommerce, and inadequate consumer protection. This article throws light on other motives that might justify that eCommerce giant such as Amazon and Alibaba have not yet established a presence in West Africa.
eCommerce in West Africa
The digital economy comprises billions of online connections among different people, businesses, and devices. The digital economy has, for many years, progressively changed the landscape of how industries operate and how consumers obtain goods, services, and information. A technology that has dramatically helped facilitate this change is the internet of things. Today, with the widespread use of personal computers and mobile phones, people and businesses can reach new customers all around the globe. This application of the digital economy, known as electronic commerce or eCommerce, is a widely growing phenomenon that has permeated the everyday life of the western world. West Africa, on the other hand, has yet to harness the digital economy to the same extent as the world of the west. A joint report of the Africa-Europe Alliance states that if Africa fails to utilize the digital economy, it risks economic isolation and stagnation. eCommerce is a tool that can help West Africa's digital economy. A few benefits of the spread of eCommerce in West Africa would have included opening markets to isolated rural communities and supporting women entrepreneurs to tap into e-business opportunities when social norms have previously kept them out of the traditional workforce.
Poor Tech Savvy Skills
eCommerce is widely used in Western countries and is a concept that plays a huge part in stimulating the economy. Nevertheless, in West Africa, applications that provide eCommerce services are not as accessible and widespread. There are a couple of reasons why Amazon or Alibaba have a low presence here. One reason is that West Africa has had other access to computers and mobile devices than the western world. Therefore people might have less experience using these applications and not be as inclined to do so. Another reason is that digital payment services that similar applications use are not available in West Africa, which means that people cannot make purchases in the applications.
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Additional Costs for Connection
Undoubtedly, online shopping is every day, and many spend hours searching for the best offer for the item they want. Generally, when we want to buy articles online, we are still determining what we are looking for, and even when we know it, we are always looking for the best offer for the product we want. Sometimes this might take long and tedious hours until we come up with the best price. In West Africa, however, this transforms into supplementary costs since people there pay for mobile Internet and telephone subscriptions. As a result, the prices they pay for such services are considerably higher compared to other countries. Yet, those who still have an internet connection regularly must deal with another significant problem: how to pay for their purchases safely.
Suspicion Towards New Ways of Payment
Since the development of credit card scams in the mid-2000s, people have become very skeptical and extra-cautious when using them for online payments. Due to this psychological barrier, and especially the fear of being scammed, potential customers are still reluctant to use credit cards when shopping online. Consequently, an alternative way, called "mobile money," appeared. The community accepted it much better, and it soon gained popularity among online shoppers. Unfortunately, this payment method has a considerable drawback - it can be used when purchasing and paying exclusively on local eCommerce sites, as it is not compatible with either Amazon or Alibaba.
Lack of Delivery Address
Despite all the hindrances, there are still those who are neither concerned with this issue nor have troubles with the internet connection and can easily access the internet. However, they encounter one problem that does not have a solution yet – one of the delivery addresses. It might seem strange and unexpected to face such a problem nowadays when it is a common thing to have an address and to be able to indicate a postal code when asked for your delivery information. But, for instance, less than 10% of homes in the capital, like Abidjan, have an exact address that postal services can use. Placing an order online, therefore, becomes quite tricky because there is simply no definite address where the purchase can be delivered.
All these constraints must be considered before Amazon and Alibaba decide to complete the West African online stores' list. They will have to develop new, safe, and feasible solutions that will satisfy their customer's needs and make their online shopping experience not only pleasant and satisfying but also stress and risk-free.
Successful eCommerce Platforms
Nevertheless, even today, we can speak about successful online shopping websites that thrive in West Africa. It is the case of the Nigerian company Jumia, an African leader in eCommerce. Export Portal, a global B2B trade marketplace, is another exciting example of international eCommerce trade integration. While its offerings are comprehensive, it still has the mobility to pivot and support all its users, something larger corporations need to do more quickly. Learn more about what Export Portal has to offer, and register today!
Stay in the Loop with Export Portal
To find out more about how you can successfully trade at an international level and build your export and import website, make sure to check out Export Portal’s Blog Page!
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