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China and Africa to share benefits of e-commerce development

Released on:2020-06-17 Views:

More and more African merchants hope to enter the Chinese market through e-commerce platforms, and some Chinese e-commerce companies are also actively expanding their business in Africa. How to better build network platforms and effectively connect products with demand between China and Africa has become a major topic of the industry.

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In the Johannesburg-based logistics warehouse of Takealot, South Africa's largest e-commerce platform, workers are checking and registering the goods.

With the increasing facilitation of China-Africa trade, cross-border e-commerce has brought about new opportunities for China-Africa commercial and trade cooperation. According to the statistics, cross-border e-commerce platforms show a trend of rapid growth as they provide African citizens with faster and more convenient consumption options. Experts point out that the African market, with a large number of Internet users, has great potential. China has accumulated a wealth of experience in e-commerce market cultivation, digital payment and logistics management, which can help African countries better build their e-commerce ecosystems. In the future, China and Africa will share the benefits of e-commerce development and achieve win-win results.

"We hope that more quality African goods have access to the Chinese market through cross-border e-commerce."

"The coffee from Ethiopia, shea butter from Mali, white pepper from Cameroon, vanilla from Comoros, saffron from Madagascar and peanuts from Senegal… We hope that more quality African goods have access to the Chinese market through cross-border e-commerce," said Vera Songwe, Under-Secretary-General of United Nations and Executive Secretary of the UN Economic Commission for Africa (UNECA). At the recent "Live Commerce" activity on China's e-commerce platform, she witnessed that the 3,000 packets of Rwandan coffee were sold out by Chinese netizens in just a few minutes, and Rwandan farmers cheered for it on the other side of the platform. Songwe said, "China's digital economy is playing a huge role and will help African merchants and farmers out of the economic plight earlier." The "Live Commerce" activity delivered a result equivalent to last year's sales.

Rwanda is the first African country to launch the Electronic World Trade Platform (eWTP), which is a digital e-commerce transaction infrastructure built by Alibaba Group for SMEs around the world. In 2019, the total turnover of imports from Rwanda increased by 124% on Alibaba's platform, and the total turnover of exports to Rwanda increased by nearly 80% year-on-year. At the end of last year, Ethiopia joined the eWTP, hoping to vitalize the digital economy and increase prosperity by further developing e-trade infrastructure. Alibaba and Zhejiang China Commodities City Group Co., Ltd. has signed an agreement, planning to jointly develop a multi-functional digital trade hub, which will become a portal for exporting African goods to China and a cross-border e-commerce trade center in Africa.

Off-line retailing in many African countries has been greatly impacted by COVID-19, while on-line shopping is growing against the trend. Kilimall, an e-commerce platform founded by Chinese investors, has now become the largest e-commerce platform in East Africa, attracting thousands of suppliers. According to the platform data, the sales of masks and other anti-epidemic supplies increased by 97 times in this April, compared with February. More and more African consumers choose to pay online through Kilimall's own payment system. Chinese goods or local fresh food can be delivered to consumers within 24 hours. Besides selling Chinese goods to Africa, the platform also provide Chinese consumers with direct access to African products such as flowers, red wine, cocoa beans and coffee beans.

"We should seize the opportunity to bring more valuable Chinese products to African consumers."

There are about 465 million Internet users on the African continent. It is expected to reach 495 million in 2025. The statistics website Statista predicts that the revenue of African e-commerce sales will reach USD 18.42 billion in 2020. By 2024, the market size is tipped to reach USD 34.662 billion, with an average annual growth rate of 17.1%.

Currently, Nigeria, Kenya and South Africa are the three African countries with the fastest development of e-commerce. Some 40% of e-commerce enterprises in Africa are headquartered in Nigeria, while Kenya has a relatively developed mobile-payment transaction environment. South Africa has great potential in developing cross-border e-commerce.

Jumia, an e-commerce platform established in Nigeria, covers more than 10 African countries. The company's latest financial report shows that it has 6.4 million active consumers, an increase of 51% year-on-year, while the transaction volume of its payment system JumiaPay rose by 77% in the first quarter of 2020 over last year. JumiaPay's dealings rose by 278% year-on-year in 2019, and the transaction volume in the fourth quarter of 2019 exceeded that of 2018. Jeremy Hodala, co-founder and co-CEO of the payment system, said the e-commerce market in Africa is booming, as the fast-growing number of Internet and mobile users has created huge business opportunities, and consumers are gradually forming online shopping habits.

The "blue ocean" of African e-commerce is being favored by more and more multinational companies. In April last year, the logistics and express company DHL launched its own e-commerce app and opened it in 11 African countries. As of now, the program has expanded to 34 African countries.

With the advent of the coronavirus pandemic, Takealot, South Africa's largest e-commerce platform, has achieved record high sales of home appliances. Among these is Hisense, a home appliance brand from China, has performed well. Hisense's shipments in May increased by 260% compared to March. Among them, the sales of mobile phone products increased by 485%, and the sales of TV products increased by 180%, accounting for 41% of the Takealot channel. "The African e-commerce market is growing rapidly, and we should seize the opportunity to bring more valuable Chinese products to African consumers," said Liu Bin, general manager of Hisense's Middle East and Africa region, plus South Africa.

"China's successful experience has inspired and encouraged many young Africans and entrepreneurs."

The African Union has specifically formulated an "African Digital Transformation Strategy". The World Bank will invest USD 25 billion in this strategy by 2030, focusing on the development of e-commerce.

As an emerging e-commerce market, Africa also faces many challenges in the development of e-commerce. For example, infrastructure in African countries is generally poor, so logistics in many remote areas cannot be covered, and there is a lack of a national street address system. The US website Practical Ecommerce noted that "because of fraud and shipping difficulties, African people have worries about online shopping." Also, a large proportion of the African population has never used banking services, so the public's trust in the security of online payment still has room for improvement.

JumiaPay's Hodala said, "We hope to use the inspiration from Chinese e-commerce to achieve further development. The African e-commerce platform hopes to continue to strengthen cooperation with China." Hodala also said China's e-commerce and digital payment system technology is very advanced and its e-commerce ecosystem is closer to the actual needs of African countries. "China has mature experience in e-commerce market cultivation and logistics management for Africa to learn from and learn about. Jumia is following the direction of China to better tap the African market."

Recently, the second session of Africa's Business Heroes (ABH) competition was held by the Jack Ma Foundation. It received 18,000 application forms from 54 countries and regions in Africa – double the number of applicants from the previous session. Many start-up entrepreneurs have emerged in this competition. The Ivorian company Afrikrea, which won the "Top Ten Entrepreneurs" in the first session, sells art and craft goods online. The "Made in Africa" commodities on the platform have achieved sales of more than USD 4 million in 101 countries and regions. Afrikrea's co-founder and CEO Murray Taber said, "China's successful experience has inspired and encouraged many young Africans and entrepreneurs."

Source: People’s Daily