The Sunday Mail
Stephene Chikozho
BIG BUSINESS IDEAS
E-COMMERCE is rapidly growing in Africa, with more businesses and consumers turning to online marketplaces for their shopping needs.
As the continent embraces digitalisation, companies are implementing innovative e-commerce strategies to tap into this burgeoning market. From offering personalised shopping experiences to providing convenient payment options, businesses are adapting to the changing consumer landscape and reshaping the future of retail on the continent.
The case of Amazon
Amazon’s recent launch of its online shopping service in South Africa marks a significant milestone in the global e-commerce landscape.
This strategic move not only expands Amazon’s footprint, but also opens up new opportunities for local businesses and consumers in one of Africa’s most dynamic markets.
South Africa, often regarded as a gateway to the African continent, is set to become the 21st country to host an Amazon-dedicated website.
This decision reflects the country’s advanced economic status and the increasing demand for online shopping services, particularly amplified during the Covid-19 pandemic.
Amazon’s entry is poised to challenge the dominance of existing online retailers such as Takealot.com and reshape the e-commerce landscape in the region. Amazon’s approach is holistic, focusing on empowering local entrepreneurs and businesses. According to the company, the launch of Amazon will offer independent sellers a robust platform to initiate and scale up their operations, connecting them to a global customer base.
This initiative aligns with the growing trend of e-commerce in Africa, where consumers are increasingly looking for diverse and convenient shopping options online.
Despite the promising outlook, Amazon’s foray into the neighbouring country is not without challenges. The country’s economic landscape, characterised by sluggish growth, high unemployment rates and infrastructure issues, could pose obstacles to the e-commerce giant’s expansion.
Moreover, adhering to local competition regulations, which mandate the separation of retail and marketplace operations, adds a layer of complexity to Amazon’s strategy.
Nonetheless, the potential benefits for local businesses are significant. The platform promises to provide South African sellers with an opportunity to reach a wider customer base, both locally and globally.
Amazon’s commitment extends beyond online retail; its establishment of the first international AWS Skills Centre in Cape Town demonstrates a broader investment in the region’s digital infrastructure and skills development. This centre will provide interactive learning and foundational cloud training, further enriching South Africa’s technological landscape.
The case of Ethiopian Airlines
Ethiopian Airlines, Africa’s largest and most profitable airline, recently announced its ambitious e-commerce strategy to further expand its reach and enhance customer experience across the continent. The launch of its state-of-the-art e-commerce logistics facility was done on February 29, 2024.
The Ethiopian e-commerce facility is located within the Ethiopian Cargo & Logistics premises.
The newly built facility, which is dedicated to e-commerce, mail and courier logistics services, is aimed at bridging logistical gaps and positioning Addis Ababa as the cross-border e-commerce logistics hub for Africa and beyond.
Marking the unveiling of the new facility, Ethiopian Airlines Group CEO Mr Mesfin Tasew said: “The inauguration of this cutting-edge e-commerce logistics facility is a significant breakthrough for Ethiopian Airlines Group and the entire African economy.
“We have implemented high-end technologies in the infrastructure that revolutionises the way goods are transported and delivered in the e-commerce industry in Africa.”
Through this facility, Ethiopian Airlines paves the way for development of e-commerce services in Ethiopia and the African continent. Built on 15 000 square metres, the US$55 million facility has a capacity to handle 150 000 tonnes annually.
Already, the airline has partnered renowned e-commerce companies around the world, including Alibaba of China, demonstrating that e-commerce logistics is the future of cargo movement. The use of the facility would gradually shift Ethiopian Airlines from conventional cargo to e-commerce cargo movement.
Mr Tasew noted: “E-commerce is the future; the Western world is using e-commerce extensively because they are ready for it in terms of its platform, payment and daily services.
“Unfortunately, Africa is not yet there. So, Ethiopian Airlines understands that it is a matter of time for Africa to endorse e-commerce as a way of life, as a way of doing business and trade.”
He added: “Our focus now is on the logistics part of e-commerce. So, it is difficult to know how much revenue to generate now, but it will start at a small level and continue to grow.
“Until that happens, this facility is going to be used also for mail and parcel services. This facility will do it automatically and with minimal mistakes.”
Ethiopian Airlines’ e-commerce strategy is part of its broader vision to become the leading airline in Africa by 2025. The airline has already made significant investments in its fleet, infrastructure and customer service in recent years, and this new e-commerce initiative is expected to further solidify its position as a key player in the African aviation industry.
In short, the cases of Amazon and Ethiopian Airlines demonstrate that the marketplace revolution in Africa is rapidly gaining momentum, driven by technological advancements and changing consumer preferences. As more and more businesses embrace digital platforms and innovative business models, the way we buy and sell goods and services is evolving at an unprecedented pace. This transformation presents both challenges and opportunities for businesses of all sizes, as they navigate the complexities of a rapidly changing marketplace.
*Stephene Chikozho is the chief executive of Big Business Africa, a dynamic and influential network dedicated to fostering collaboration, innovation and success for businesses in Africa. He writes in his personal capacity. You can follow him on social media (Instagram, Facebook, X, LinkedIn, Threads) WhatsApp: +263772409651 or email: [email protected]
