What is the current development status of the e-commerce market in Africa? Analysis of the overseas warehouse market in Africa
Status of e-commerce market in Africa & Analysis of overseas warehouses in Africa
Under the “One Belt, One Road” initiative, the economic and e-commerce environment of African countries has been flourishing in recent years, becoming one of the most promising emerging markets. However, the outdated logistics facilities in Africa have always been a concern. Today, let’s take a look at the development of the e-commerce market and overseas warehouse market in Africa.
Overview of the African E-commerce Market
Africa has a total of 54 countries and a population of 1.4 billion, with urban population accounting for 43.9% and an average age of 24. The per capita GDP is about 2000 US dollars. Among the major countries in Africa, South Africa’s per capita GDP has reached 6658.6 US dollars, and per capita consumption expenditure is 3855.1 US dollars, both ranking at the forefront of Africa.
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According to data released by StockApps.com, the revenue of the African e-commerce market reached 28 billion US dollars in 2021, and is expected to reach 33.3 billion US dollars in 2022 and 42.3 billion US dollars in 2024. The market size of the industry will grow by about 500% in seven years from 7.7 billion US dollars in 2017. In addition, the number of African e-commerce users is expected to reach 476.5 million in 2024.
According to a survey data from Nielsen, during the pandemic, the likelihood of consumers maintaining or increasing their shopping levels in Egypt, Nigeria, Kenya, and Morocco increased by 40%, and Kenya had the fastest growth rate in online shopping.
Characteristics of the African E-commerce Market
1. E-commerce channels provide a wider, richer, and more diverse range of product choices compared to physical stores, which cannot offer consumers the same breadth of selection. The resulting market opportunities are: in addition to platform e-commerce, there are huge opportunities for B2C independent station e-commerce.
2. The proportion of online consumption to overall social consumption in Africa is still low. The overall consumer market in Africa is still dominated by offline wholesale, hierarchical channels, and retail stores, among which stores are highly fragmented, with many being family-owned. Channel integration is low, and retail stores are highly dispersed. The resulting market opportunities are: there are huge opportunities for B2B foreign trade independent stations and B2B2C independent stations, and there are also many small B users in B2C independent stations.
Current Status of African Overseas Warehouse Market
The African overseas warehouse market is still in its early stages compared to other regions, but with the development of the e-commerce market in Africa, the overseas warehouse market is gradually emerging. Currently, there are relatively few types and numbers of overseas warehouses in Africa, but there have been some cases of major overseas warehouse operators and e-commerce companies establishing overseas warehouses in Africa.
Among the various countries in Africa, the overseas warehouse market developed in Southern and Eastern Africa is more active. For example, cities such as Mombasa in Kenya, Dar es Salaam in Tanzania, Lagos in Nigeria, and Johannesburg in South Africa have become relatively important overseas warehouse construction and logistics centers in Africa.
At the same time, due to the limitations of infrastructure, customs clearance, and other environmental factors in Africa, logistics costs and risks are relatively high. This has also brought more development opportunities to the overseas warehouse industry, which can resolve cross-border logistics bottlenecks and improve logistics efficiency.
In summary, although the African overseas warehouse market is relatively weak, its potential is still very promising. With the continuous expansion and development of the African e-commerce market, overseas warehouse operators and e-commerce companies can seize the opportunity, accelerate the construction and investment of local overseas warehouses, and provide more high-quality, efficient, and reliable logistics services for the cross-border e-commerce industry in Africa.
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