News Column

Internet Connectivity Boosting E-Commerce

July 25, 2014

Masembe Tambwe

AN annual growth rate of about 40 per cent is forecasted for the African e-commerce industry, according to market research firm yStats. com.

In its "Africa B2C E-Commerce Report - 2013", yStats.com found a number of countries with strong online sales have already emerged, including South Africa, Nigeria, Egypt and Morocco.

An increasing Internet penetration rate, the rapid spread and accessibility of mobile technology, and recent improvements to ecommerce payments and delivery infrastructures on the continent have all been linked to the online retail boost.

In addition to improved Web technology and accessibility, a quickly-developing African middle class in urbanized areas is another driver in the e-commerce platform's recent success.

"E-commerce has a high potential in Africa as the growing middle class seeks more convenient shopping and better price quality, driving local and international Internet merchants to operate in the region," said YÜcel Yelken, yStats. com's CEO.

The report identified a number of specific established industry websites, including South African online retailer Zando and Nigeria's large outfits Jumia and Konga.

Overall sales were less than 1.4 billion US Dollars in 2012, but strong market growth is forecasted on the continent over the next 10 years, the report found. Mobile online payments are also expected to increase in the near future.

According to the World Bank, mobile phone usage in Africa is exploding, and has been for the past five years. In fact, its mobile phone market has pinnacled the 650 million user tally - which is greater than the US or Europe.

Internet access is rapidly expanding as well, with World Bank saying new Internet cables have been stretched out over miles of the African continent, increasing bandwidth usage twentyfold.

The yStats.com report added that more than 10 per cent of active Internet users in Africa shopped on their mobile devices in 2013. Tanzania's internet users have been dramatically increasing in number over the last few years. Less than 20 years after online services arrived in Tanzania, the number of Internet users in the country has exceeded 9 million people.

This is more than triple the number estimated in 2008, according to the Minister of Communications, Science and Technology, Professor Makame Mbarawa.

Prof Mbarawa who spoke at the inauguration of the Tanzania Telecommunications Monitoring System (TTMS) in Dar es Salaam recently said the usage of Internet services is key for sustainable socio-economic development as it has enabled the implementation of e-government, e-learning, e-health, e-commerce and much more, both locally and globally.

These changing trends in technology in the communications sector enable a greater portion of the population to take part in it. This transformation is not unique to Tanzania alone. The telecommunications market in Africa is one of the fastest-growing in the world. Many African nations are not only "mobilefirst", but essentially "mobile-only" markets.

Africa is a population with an appetite for new technologies, and now the expansion of 3G data networks and the rapidly declining costs of smart-phone suggest there is plenty of room for further growth. The average price of an entry-level smartphone has dropped by more than 20 per cent in one year, from 120 US Dollars in 2013, to under 100 US Dollars for a 3G smart-phone.

With 650 million mobile phone subscribers in Africa, there are already about 100 million smartphone users with the number set to double to 200 million users in the next four years.

"This concept of ecommerce offers customers greater choice and more convenience in shopping for anything you can think of online, while allowing retailers in Tanzania to take their businesses and brands to a new level," says Kaymu's Country Manager for Tanzania Erfaan Mojgani.

As for Tanzania, 20 per cent of the population is connected to the internet. The growth in Internet connectivity among users has boosted e-commerce to new heights, with record numbers of people selling and shopping goods online.

For example, Kaymu, Africa's number one online shopping destination launched its internet marketplace in Tanzania at the beginning of 2014, and has met with great success as buyers and sellers quickly adapt to the concept of e-commerce in Tanzania.

The platform offers a simple, cost-effective way for sellers to create and manage their own online store for free, where their locallyavailable products can be sold to buyers anywhere in Tanzania.

Just like a physical marketplace, the website is accessible to anyone - from a fashion store owner to an electronics wholesaler, and even individual sellers wanting to create a business or sell specific items for extra income.

Kaymu has worked hard to simplify the process of setting up a shop on its website (www. kaymu.co.tz), and is set to propel retail businesses forward quickly by offering the ability to deliver locally and nationwide. Hamza Big 7 Shoes, one of the independent merchants registered on Kaymu and a popular seller of men's shoes was asked: "How has Kaymu helped you in the growth of your business?"

The owner replied, "It has helped me increase my income more, because I get extra orders that I didn't have before and exposure outside the region as well. This is a good model instead of depending only on the customers which happen to walk by my shop on a given day."

At the same time, Kaymu draws thousands of Tanzanians to the website every day by offering customers a bestin- class platform and online shopping experience, as well as flexible payment methods and a dedicated customer service team. One daily internet user and repeat customer from Kaymu voiced his positive reviews of the online marketplace.

"It's very userfriendly and saves a lot of time, both in browsing for everything and in finding the exact product you are looking for." Richard Mushi, from Sinza, Dar es Salaam, adding that he came across Kaymu in a Facebook advertisement, and found the prices and delivery convenient enough to make multiple purchases, each time getting exactly what he ordered.

This rapid surge in internet users and infrastructure and the resulting potential for private business and public services have pushed the government to become a hub of Information, Communications and Technology (ICT) infrastructure and solutions by forming the, the National ICT Broadband Backbone (NICTBB). Managed and operated by the Tanzania Telecommunications Company Ltd.

(TTCL) on behalf of the government. The NICTBB helps to fulfill the increasing demands of information services, strengthen competitive abilities of voice operators and bridge the digital divide.

It is necessary in developing high speed broadband and helps to efficiently exploit the benefits from undersea submarine cables landing in Dar es Salaam by providing high-quality capacity and fibre-optic connectivity between Tanzania and the rest of Africa. NICTBB is doing its part to redefine and advance the country's suite of e-solutions.


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Source: AllAfrica


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