By Umar Suleiman
As smartphones and internet technologies become increasingly accessible in Africa, the continent has become a lucrative market for the eCommerce industry as players such as Jumia, Konga, Takealot, KiliMall, and other continue to enjoy more patronage.
According to the numbers presented by StockApps.com, the African eCommerce market will reach annual revenue of $46.1 billion by 2025.
Africa is shaping up to be the next hotbed for internet-based businesses. As smartphones and the internet become more prevalent in African countries, the population has started to shift towards online shopping.
According to the stats available on Statista, the African e-commerce industry is expected to grow at a compound annual growth rate (CAGR) of 24.7% between 2017 and 2024.
In 2017, the industry’s annual revenue was just $7.7 billion, and it is expected to increase to $42.3 billion in 2024. Thus, the yearly income stands to increase by almost 500% in seven years.
In the last couple of years, the pandemic has also helped the industry, like everywhere else on the globe. Thus, one can also expect the recent surge in growth to slow down in the coming years.
In 2021, the African e-commerce industry brought in $28 billion in revenue. Compared to $21.4 billion in 2020, the 2021 figure represented a 31% annual increase. As per the report, the annual growth rate is expected to decline to 9% by 2025 gradually.
In 2022, the African e-commerce industry is predicted to produce $33.3 billion in revenue, following an increase of 19%. Next year, the industry will grow by 14.7% to $38.2 billion.
In 2024, the annual growth rate will further drop to 11%, with $42.3 billion in revenue. In 2025, the annual revenue will reach $46.1 billion on the back of a nine percent annual increase.
The growth in the African e-commerce industry is primarily down to the expanding e-commerce user base on the continent.
In 2017, only 138.9 million people shopped online in Africa. This figure is expected to grow up to 519.8 million in 2024, at a CAGR of 17.9%. It is interesting to note that the revenue growth rate is higher than that of the user base.
Furthermore, the e-commerce penetration in the African population in 2024 is expected to be 40%. Therefore, there is significant room for further growth in the African e-commerce industry.