African e-commerce firms seek help to face global giants

Wednesday April 10 2019

e_Commerce

African e-commerce platforms are concerned that lack of updated regulations and a passiveness  will render them less competitive and their market eaten into by global e-commerce giants like Amazon and Alibaba. PHOTO | SEARCH  

MOSES K. GAHIGI
By MOSES K. GAHIGI
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African e-commerce platforms are concerned that lack of updated regulations and a passiveness by African governments when it comes to e-commerce, will render them less competitive and their market eaten into by global e-commerce giants like Amazon and Alibaba.

Experts said that using the advantage of scale, superiority in innovation and access to customer data through data platforms like Facebook, Google and others, these global players will cannibalise local e-commerce platforms.

“We are in competition with global e-commerce platforms that have zero job creation,” said Jeremy Hodara, co-founder and co-CEO of Jumia.

He said that the payment landscape in Africa is not fully developed, which is an impediment, calling on policy-makers in the e-commerce space to harmonise regulation of the sector.

Industry players also said e-commerce players in Africa face financing constraints, a problem the big e-commerce giants don’t face.

“Alibaba currently has an ambitious plan where it can reach any part of the world within two days to deliver goods, the big players are capitalizing on scale, building warehouses and logistic centres,” said Clemens Weitz, CEO of Ringier one Africa media, adding, “African e-commerce players need to be supported by putting the right kind of policies in place to grow them.”

Experts also pointed out that regulation geared towards bringing down the cost of Internet, and other interventions tailored to the African context would make it conducive for both online customers and sellers.

“We want regulators to meet us and understand our needs and challenges,” said Mr Weitz. He added that the disruption brought on by giant data tech firms like Google, Facebook and other social media platforms poses a threat to their existence, but said that African e-commerce players are also trying to come up with their own data intelligence systems.

Although there is some level of digitisation in the African landscape through companies like Jumia and others, there is still a big gap in well-segmented customer data, which has left millions of people unserved or underserved, something e-commerce giants like Alibaba and Amazon can exploit.

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