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Pandemic pushing growth of e-commerce in Sub-Saharan Africa: VISA

NAIROBI, Kenya, Aug 22- The lockdown occasioned by the coronavirus pandemic saw new e-commerce users rise by 5 percent in Sub-Saharan Africa in 2020, when compared to the active base the previous year.  

This is according to a report by VISA which attributes this to a preference for e-commerce, to fill the void left by the closure of face-to-face retail, which was implemented across many parts of the world, including the region, to fight the viral disease.

“The COVID-19 pandemic has driven customers to e-commerce and digital payment usage. The economic shocks that followed COVID-19 have reduced spending power across the world, including SSA, but the closure of physical stores has provided a growth opportunity for digital payments and e-commerce itself,” the report notes.

The ‘e-commerce developments across Sub-Saharan Africa’ report also notes that the economic shocks that followed COVID-19 have reduced spending power across the world, including in the region, but the closure of physical stores has provided a growth opportunity for digital payments and e-commerce itself.

As such, VISA projects that e-commerce sales will grow to US$7 trillion across the globe by 2024, with the Asia Pacific, specifically, China, India, and Southeast Asia, being the key driving force behind the market at 56 percent of global volume.

Countries in the Middle East and North Africa region have the largest growth potential over the next 5 years.

The Sub-Saharan Africa region however lags the Middle East and North Africa region, but still shows strong potential, having seen a 42 percent year-on-year growth across the region from 2019-2020.

Growth of the industry is being different by many factors, including cross-border transactions which make up over half of all e-commerce transaction volumes in Sub-Saharan Africa.

According to the report, this mirrors the global trend of online business to consumer (B2C) online shopper cross-border transactions.

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However, a portion of these cross-border volumes in Sub-Saharan Africa come from consumers accessing the rising domestic African eCommerce stars across local borders, such as Jumia (Nigeria), Kilimall (Kenya) and Takealot (South Africa).

As domestic e-commerce provision in Sub-Saharan Africa is only just beginning it presents an exciting opportunity for the region to develop its own big hitters in the e-commerce market and increase the continents’connection to the rest of the world.

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