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E-commerce market in Ghana, others underdeveloped – Report

The e-commerce market in sub-Saharan Africa, including that of Ghana, is relatively underdeveloped compared to elsewhere in the world.

Many households are not offering a high enough disposable income level to support the e-commerce market, Fitch Solutions has said.

“There are also a number of operational obstacles that have hampered e-commerce expansion in SSA. Payments have proven a barrier to development, with cash on delivery deeply rooted in consumer behaviour in SSA”.

In a report titled: “COVID-19 Impact Will Boost E-Commerce Demand And Development In Africa”, Fitch said mobile money is now more commonplace, so digital payments are becoming less of an obstacle for e-Commerce development.

However, large payments are, however, still transacted in cash, owing to the limitations of digital wallets and also consumers’ preference for wanting to inspect high-value goods before committing to large payments.

This, therefore, means that some segments of e-Commerce (furniture and consumer electronics for example) will take longer to develop in SSA.

COVID-19 Lockdowns Will Normalise E-Commerce In SSA

“We believe that COVID-19 related lockdowns and stay at home orders will necessitate the process of ordering goods and services online, making consumers more comfortable with the process, which will extend beyond the period of lockdowns”, it emphasised.

For consumer-facing companies, the report said the prohibition of non-essential retail within the bricks and mortar segment will force many firms to shift to expand or break into e-Commerce, with this segment of retail likely to be the main source of revenue for many retailers over a significant period of 2020.

These demand and supply forces will drive online marketplaces, e-commerce companies and delivery companies to quickly adapt and define their transport networks to deal with the last mile delivery service, something that has historically hampered e-commerce development across countries in the SSA region.

Source: Class FM

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