How African Businesses Can Increase Sales Through Ecommerce

The world is going increasingly digital, and more people are choosing to buy their products and services online every day. In 2017, ecommerce accounted for more than $2.29 trillion in global sales, and this will grow to $4.49 trillion by 2021. If you desire to grow your business, ecommerce will enable you attract new clients and sell in other regions, countries or market. The opportunities ecommerce presents over traditional brick and mortar businesses are endless.

WHAT ARE THE KEY FACTORS DRIVING ECOMMERCE IN AFRICA?

Increasing globalization presents enormous opportunities for Africa. Of particular importance to ecommerce are increasing internet and mobile device penetration. Other favorable factors are the emergence of mobile money transfer services and other online payment gateways such as Slydepay or Hubtel. These innovations have presented African Businesses with a unique opportunity to expand the reach of their businesses through ecommerce. Africa’s young population can also account for increasing popularity and acceptance of ecommerce though some challenges still exist.

APPORTUNITIES TO INCREASE REVENUE

From annual total revenue of USD14.748 million in 2016, ecommerce is expected to grow by almost 100% to USD 28.942 million by 2022. Total Annual revenue which was USD 16.651 million in 2017 is projected to increase to USD 18.850 million by the end of 2018. African businesses that want to grab a piece of this cake must begin set their business up to do ecommerce which is very much inexpensive compared to setting up physical shops or showroom to sell.

OPPORTUNITIES TO INCREASE MARKET SIZE

Parallel to the growth in revenue is the market opportunities ecommerce presents to business entrepreneurs doing business in Africa. For most part of the 20th century, African economies have been dominated by entrepreneurs doing brick and mortar business which requires large capital for entry. Ecommerce however presents increasing opportunities for businesses to tap into a large market with less capital demand. The African continent presents a growing demographic with 61.4 million ecommerce users in 2016. This is projected to grow my more than 30% to 92.7 million users in 2022. The average revenue per user (which is the estimated amount each user spend shopping online) will also increase from USD 240.27 in 2016 to USD 312.33.

 

Africa’s population has been on the increase over the past 50 years. The continent is home to over 1.2 billion people, over 60% of whom fall below the age of 25. The continent young population is also another reason for the increasing growth in ecommerce, as the millennial and Gen X population are much open to technology and innovation. Businesses that embrace ecommerce can therefore tap into more than 92 million ecommerce users to sell their products.

OPPORTUNITY TO REDUCE COST

An ecommerce business model doesn’t just help you sell more; it also comes with some cost reduction pros. Notable are reduction in the cost of labor, document preparation, reconciliation, mail preparation, telephone calling, data entry, overtime and supervision expenses.
For many traditional businesses, making a sales means having A showroom/shop to display products, a salesperson to woo customers, employing a cahier to handle the actual sales and other personnel in other areas. Ecommerce doesn’t require a sales person or cashier to be implemented. While you will need a web designer, a domain name and a web hosting plan to get an ecommerce store running, the cost is far less when compared to a brick and mortar store.

OPPORTUNITY TO SELL MORE

The goal for every ecommerce project is to enable you to sell to customer who otherwise wouldn’t buy from you due to proximity or other reasons. Ecommerce gives you the tools to target specific market and advertise to these specific markets. You will be able to process their purchases online, accept and process their online payments and manage their shipping and deliveries all through your ecommerce platform. From the point of targeting the client to the point of competing a sale, ecommerce aims to automate as much of these products as possible.
Automation means you don’t have to physically present when these sales at taking place. It also means your online store remains open 24/7 and can serve customers at any part of the globe. All a customer has to do is to go to your website or store and the can buy any product or service.

PROVIDE COMFORT FOR YOUR CUSTOMERS

To your customers, ecommerce is a preferred shopping method as it provides comfort and hassle free shopping. Your clients do not have to leave their house. They do not have to drive 30 mile to your shop, then transport the entire product they have bought back to their home. They can sit in the comfort of the living rooms and order any products they want to be delivered to them. Such hassle free shopping provides convenience and comfort to your customers. Your customer can also shop anytime at their convenience as your online store will remain open 24/7.

WHAT ARE THE CHALLENGES

Unlike many ecommerce businesses operating in developed countries, ecommerce operators faces unique challenges peculiar to the business environment in Africa.
Many Africans are still highly skeptical of online shopping, due to cases of online fraud. For example, many people do not feel safe putting their financial information—such as credit cards, etc on websites. This tendency is however less pronounced in younger, educated Africans although these may not have the spending power needed to fuel businesses.

Again, most African countries have non-functioning postal system that increases the cost of making deliveries. Businesses therefore rely on individual dispatch and motor riders among other inefficient means. The high cost of internet also discourages ecommerce in Many African Countries.

I must add that despite these challenges, many ecommerce businesses have been able to adept their operations to the African environment. The benefit to ecommerce certainly outweighs the cons.

HOW MUCH DOES ECOMMERCE PROJECT COST?

African entrepreneurs must invest in ecommerce so as to attract young buyers who are generally open to technology. Key cost decisions to make will include domain name and hosting services, ecommerce website design and addons, search engine optimization and digital marketing.

DOMAIN NAME AND WEB HOSTING SERVICES:

Businesses that want to invest in ecommerce must first register their domain name and buy hosting service to host their ecommerce website. Starters can go for shared hosting and later upgrade to dedicated hosting as their ecommerce business grows. Shared hosting costs about usually cost about ninety dollars (USD90.00) per year, depending on the hosting package.

SECURE SOCKETS LAYER:

SSL is the standard security technology for establishing an encrypted link between a web server and a browser. SSL is used to secure your website to prevent hackers from stealing any information your customers share with your website. Such information generally includes sensitive data such as credit card information. Enolvihost provides free domain validation SSL for all our client. 

ECOMMERCE WEBSITE:

The main component of an ecommerce project is the ecommerce website. This is usually priced based on the functionalities the user requires. Ecommerce website prices starts from GHS150.00 and increases based on the demand of the project. You many view our Ecommerce Website Design pricing here.

SEO:

Search engine optimization (SEO) includes all activities that increase the quantity and quality of traffic to your website through organic search engine result. SEO helps you to attract more customers through organic search. To effectively use SEO as a selling tool you need to learn best practices such us using the right keywords and creating post that are optimized for search engines. 

DIGITAL MARKETING:

Digital marketing refers to all paid online advertising including social media. Digital marketing attracts customers to your website which lead to sales. Cost usually varies depending on the company’s budget, as most digital marketing channels offers as low as USD1.00 per day ads placement.

CONCLUSION

African businesses should take advantage of the increasing penetration of internet and mobile devices to sell their products on the internet. Small to medium Enterprises that can’t afford to open branches in other regions/countries will still be able to sell their products in these regions through ecommerce. Ecommerce will empower SME’s to sell in other markets, expand the reach of their business, attract new clients, reduce cost, increase sales and improve their bottom line.