Advances have been most notable in Nigeria where a surge in telecom investments and smartphone purchases have fuelled growth in internet usage from 20% in 2009 to 41% in 2014. Furthermore, according to Euromonitor International data, Nigeria boasts the largest online market for apparel and footwear in the region, which is expected to grow from $104 million in 2014 to $1077 million in 2019, mainly due to the dynamic development of trusted e-tailers Jumia and Konga.
Meanwhile, South Africa, the region's largest apparel market overall, is expected to record a much slower pace of growth in internet retailing from $50 million in 2014 to $73 million in 2019. This highlights consumer preference to use the internet as a research tool and purchase items in store as a result of the mature formal retail environment.
E-tailing in sub-Saharan African is currently dominated by local businesses. Spree.co.za is South Africa's primary online player with a 10% share. The website has a similar aesthetic to ASOS, providing editorial content and offering an array of brands including Levi's, Guess and Nike. Mr Price, the leading South African retail chain, has also acknowledged e-commerce as an essential distribution channel having launched its transactional website in 2012.
Jumia and Konga are leading the way for internet retailing in Nigeria with 36% and 23% shares, respectively. Both businesses offer a range of products, from books to beauty, and include a number of local and international fashion brands, such as Topshop, H&M and Vero Moda. Jumia, which now operates in eight African countries, found success in offering fast delivery services and establishing trust with consumers by allowing payment on delivery.
A number of start-up retailers have emerged in response to the growth witnessed in Nigeria, for example, webmallng.com and buyam.com.ng, act as 'online malls', allowing merchants to set up shop in one place. Although this creates a vast product offering for consumers, it appears to cause confusion regarding the management of the site, as Buyam.com.ng continued to display Christmas promotions on its homepage in February.
It is expected that e-tailing will follow in the footsteps of other developed markets. As more consumers gain access to the internet and become comfortable shopping online, growth will be driven by competitive pricing, providing opportunities for fast fashion brands appealing to the younger demographic.
Clearly, e-tailing is still in its infancy. The weak transport infrastructure and lack of consumer confidence will continue to restrain growth. Further still, in a region where many consumers do not have a credit card and in some cases no formal address, retailers are faced with a magnitude of logistical problems they need to overcome.
Although forecast growth is promising, in order to see a return on investment, strategy will need to be long term and platforms such as Spree, Konga and Jumia, provide a route to market that minimises risks and allows brands to build customer relationships.
As businesses skip the traditional brick-and-mortar retail spaces moving straight into e-commerce, it is likely international brands will adopt a similar strategy that has been used to enter the Chinese market via Tmall, gaining the trust of consumers and generating widespread exposure.
