E-Commerce Landscape in Africa: Trends and Insights

In this edition of IN THE VALLEY , we explore the dynamic growth of e-commerce in Africa, focusing on key trends, recent developments, and emerging opportunities in the space.

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Market Overview

Africa’s e-commerce market was valued at $277 billion in 2023, and it is expected to grow at a Compound Annual Growth Rate (CAGR) of 14.4% through 2032 according to data from Statista. This growth is fueled by over 1.3 billion mobile users and the increasing adoption of digital payment methods across the continent. Notably, Africa uses mobile internet 13% more frequently than the global average, with over 500 million e-commerce users expected by 2025, reflecting a massive shift towards online shopping? .

Key industries such as electronics, clothing, food, and cosmetics continue to drive e-commerce, with mobile commerce (m-commerce) leading the charge. E-commerce users are expected to grow at an impressive 17% CAGR, highlighting the region’s potential for further growth.

*The graph shows the number of e-commerce users, e-commerce penetration rate, and CAGR of e-commerce users in Africa. Source

Shifting Market Trends in African E-Commerce

·?The B2C sector Dominance

The B2C sector in Africa is dominated by Jumia, Takealot, Amazon, and Konga. Jumia, also called the "Amazon of Africa," is a multi-country online store with approximately 23 million monthly visitors, while Takealot, the largest online retailer in South Africa, welcomes over 10 million visits per month. These platforms have grown popular due to the increasing demand for convenience and variety in shopping, which directly benefits both consumers and sellers.

·?Emerging B2B E-Commerce

While B2C dominates the landscape, B2B e-commerce is quickly gaining traction as businesses adopt digital-first strategies. Companies like Omnibiz and Sabi, both part of the Silverbacks Holdings investment portfolio,? are leading this charge alongside Wasako and MaxAB. For instance, Omnibiz—a platform focused on Fast-Moving Consumer Goods (FMCG)—grew at an astounding 772% CAGR from 2019 to 2022, making it Africa’s fastest-growing company as ranked by the Financial Times.

?B2B buyers, much like consumers, are now seeking convenience and personalization through online transactions. The integration of mobile commerce is also critical, as businesses invest in responsive apps to facilitate B2B transactions.

·?The Rise of Social Commerce

Another trend shaping the African e-commerce space is the rise of social commerce. Platforms like Instagram and Facebook are playing a pivotal role in enabling businesses to engage consumers through influencer marketing and direct shopping. The line between online and offline retail continues to blur, as e-commerce brands now establish physical presences to enhance customer experiences.

·?Logistics: The Backbone of E-Commerce Growth

As consumer expectations for fast delivery increase, e-commerce businesses are focusing on improving their logistics infrastructure, an example of this is Jumia, for example, offers logistics services to third-party merchants, helping them streamline deliveries. Partnerships with reliable shipping providers and investments in last-mile delivery solutions are critical to success in this growing African market.

Mergers, Acquisitions and Growth Capital: Shaping the Future

The African e-commerce landscape is undergoing a transformative shift, powered by ambitious mergers and strategic acquisitions. These deals are reshaping markets, driving innovation, and unlocking unprecedented growth across the continent. As e-commerce giants consolidate and groundbreaking startups attract significant investment, the future of Africa’s digital economy is brimming with potential.

From historic IPOs to mergers that combine powerful B2B networks, these major transactions are not only altering the trajectory of individual companies but are also redefining the broader e-commerce ecosystem in Africa. Here are some of the most impactful and game-changing deals that are steering Africa’s digital transformation:

·?August 2024 – Wasako and MaxAB Merger : In one of the most significant moves in African e-commerce, Wasako and MaxAB, two leading B2B platforms, completed their all-stock merger, connecting over 450,000 merchants to 65 million consumers across eight countries. This merger aims to enhance operational efficiencies while expanding fintech offerings such as e-payments and credit financing.

·?August 2024 – Takealot’s Sale of Superbalist: South Africa’s e-commerce leader Takealot continues to strengthen its position in the market with the recent sale of Superbalist to the Zalora Group , part of a broader strategy to? refocus on its core operations.? Takealot’s food delivery service, Mr D Food ,also saw a 16% increase in gross merchandise value (GMV) and achieved a trading profit of $3 million , marking a positive sign of its sustained growth.

·?May 2023 – Sabi’s $38 Million Fundraising: Another major deal in the B2B e-commerce sector is Sabi’s successful $38 million at a $300 million valuation with backing from investors such as CommerzVentures, Norrsken22 and Fluent Ventures. This investment will enable Sabi to expand its service offerings and further capitalize on the rapidly growing African e-commerce market.

·?April 2019 – Jumia’s IPO: As the first African tech company to list on the New York Stock Exchange, Jumia raised approximately $196 million during its IPO. This pivotal moment not only solidified Jumia’s position in Africa’s e-commerce landscape but also opened the door for other African tech startups to attract international attention.

These deals highlight the growing momentum in Africa’s e-commerce space, where strategic partnerships and financial investments are driving the continent towards a new era of digital commerce.

Challenges and Opportunities in African E-Commerce

While Africa’s e-commerce market has tremendous growth potential, it still faces several challenges. Limited logistics infrastructure hinders efficient delivery, and low levels of financial inclusion restrict many consumers’ access to digital payment solutions. According to McKinsey, digitizing Africa’s supply chains could have an annual economic impact of $300 billion by 2025 .

Issues of consumer trust in online transactions also remain, with cases like Sendy, a B2B e-commerce company once valued at $80 million and raised over $27 million in total, that shut down operations last year due to funding challenges, underscoring the financial vulnerabilities within the sector. However, ongoing investments in digital infrastructure and mobile payment solutions are expected to alleviate these challenges over time with projections indicating that mobile broadband users will reach 438 million by 2030 from 287 million in 2022, suggesting substantial potential for e-commerce growth.

The Road Ahead: Future Trends in African E-Commerce

Africa’s e-commerce landscape is undergoing a transformation, with a projected market size of $940 billion by 2032. Technological advancements and evolving consumer behaviors will continue to unlock new growth opportunities across the continent, offering significant potential for both investors and businesses.

As these dynamic shifts unfold, we at IN THE VALLEY remain committed to bringing you closer to the stories that are shaping Africa’s entrepreneurial future.