The reaction that trailed the entry of e-commerce into the African market is still fresh in memory for those conversant with events in the industry. The negativity was strong enough to put off timid investors. The naysayers had all available indexes to be right: a continent with over a billion people, majority of whom live in rural settlements with low internet connectivity. The infrastructure needed for such a digital-based venture isn't commonplace on the continent.
Ten years down the line, the sturdy investors are still in business. E-commerce has since proven its viability on the continent, with a customer base that keeps growing every year. The activities are also spreading into rural communities as investors swarm the continent. From the humble beginning of B2C, the culture is fast spreading into the informal retail market. According to Per data from research consultancy, Briter, B2B ecommerce ventures in Africa secured more than $256 million in disclosed funding in 2021.
Statista Digital Market Outlook said e-commerce penetration rate in Africa will continue to increase, and by 2025 reach around 40%. The overall African market is projected to reach $180 billion by 2025. "E-commerce brands have always staked big on the future of Africa since their first entry about a decade ago. The odds were there but they saw the potential. The exploit of e-commerce forerunners has encouraged several other investors to venture into Africa. Now the B2Bs are taking it further," said industry expert and analyst, Samuel Elegba.
One of the innovative B2B platforms leading the impact on the Nigerian retail market is Alerzo. "We empower retailers in the informal sector through our ecosystem of digital products, so they are equipped to run profitable and sustainable businesses. We’re focused on supplying much-needed products to informal retailers without the usual stress and dangers involved. With our services, we have improved the profitability of over 80,000 retail owners," said Chief Executive Officer of Alerzo Limited, Adewale Opaleye.
Speaking further, Elegba explained that the impact e-commerce brands have on businesses in Africa is conspicuous and will play a crucial role in the future of Africa's economy. "They are providing a platform for SMEs to thrive. And given the crucial roles of the SMEs to the global economy, investment of e-commerce firms in this sector makes them a critical part of every digital conversation and projections across Africa.
"Some will still want to talk about whether they are profitable or not. But don't forget that the investors had made a standpoint from inception: their aim was to drive acceptance based on impact, and the rest will fall in line. And as we can see, every region in Nigeria and Africa is feeling the impact of e-commerce."
The growing rate of investment in e-commerce across Africa is good for the future, especially for SMEs. With partnerships, collaboration and continuous innovation, e-commerce firms are not only improving business activities and productivity, but are staking big on the digital future of Africa's economy.