World Bank forecast the economic growths in some countries have increased greatly. There are several reasons why the economy has grown so fast. As you know, Africa is known for its poor countries. Middle-class expansion, friendly market business, and also rapid urbanization have changed the business trends in the region.

Countries’ government across Africa has realized that the small and medium sector of business can be used as a source of job creation and economic growth. Some major countries even make everything easier for the entrepreneur to run a business. Some digital tools are also utilized these days. Now people in Africa familiarize themselves with some digital tools available in the marketplace where they can operate some streamline or online processes like opening a bank account for business, tax submission, registering a brand new business and etc.

Digital tools used to be very expensive in Africa especially for small businesses. On the contrary, people are easily able to access the internet to gain their business. Things like data entry, email marketing, customer service, and accounting make everything is easy. Nowadays, people use their phones as their gateway to information and knowledge from posting something on social media, complaining about things, buying online tickets, writing reviews, and many others. There are huge populations that make use of the internet in Africa. This is a business trend that should be utilized.

Africa is known for its large quantity of resources in both mineral resources and agriculture. Africa has struggled from transforming these resources into persistent economic development. New investments and innovations change and create an exciting occasion for business. Nigeria is considered the largest marketplace in the continent as it has a large population. Foreign investment is also growing rapidly mainly in resources sectors. The country is known for its power deficiency makes it a great opportunity for business.

Skeptical about online retail

On the other hand, internet business reality in Africa diverges from what is accessible in the western world. The optimism clouds some noticeable challenges in the continent to deal with. That’s why internet commerce is not profitable.

Many Africans are still skeptical about buying things online. They prefer buying things offline which is easy for them to choose items cautiously. On the contrary, people in Africa are enjoying the growth of the internet as they can access the web easily. With the high cost of bandwidth, internet business in Africa is challenging.

Logistic restriction

Since internet business needs delivery through the postal system, most countries in Africa only utilizing motorbike to deliver things. Of course, it will increase the cost that affects the price and selling. Literally, markets are everywhere with low prices offered and e-commerce companies have to overcome this to keep the company exists. Since many Africans cannot read and write, it is difficult to grow internet business in Africa. Low literacy capability affects the e-commerce business as everything displayed with texts and images.

Every marketplace in the world has its challenges to grow. Well challenges as a part of how marketing analytics should work, and it creates better and better strength each time. The geographical condition shall also bring impacts to marketplaces’ challenges. Southeast Asia, for instance, most challenges come to shipping, due to strict regulations in most of the countries or facts that Southeast Asia country comes in archipelagos.

But now let’s talk about Africa. What are the challenges marketplaces in Africa‘s face?

Then, what are the impacts of the challenges? What should you prepare if you were in the marketplaces’ CEO’s shoe?

Example of Marketplaces in Africa

In Africa, few local marketplaces are pretty famous and working well. One of the reasons is that they sell authentic locals’ masterpiece hand-made accessories. Africa’s hand-made woven or other authentic creations are pretty known around the world.

Those marketplaces are Jumia which operates around multiple countries in Africa, next is Kilimall which operates in Uganda, Nigeria, and also Kenya, then Konga which operates in Kenya.

The Examples of Challenges the Marketplaces Are Facing

There are so many examples of challenges the marketplaces should face. Some of them due to logistical problems. One challenge that has happened the most is the accountability of PayPal and other worldwide networks. A fact that worldwide is purchasing Africa’s authentic hand-made products but not a lot of their countries’ commercial banks are connected to Africans’. To handle that challenge, most marketplaces in Africa allow PayPal as their payment gate.

The next challenge for marketplaces in Africa includes the existence of eBay and Alibaba. Those two gigantic marketplaces have a huge power of the market in Africa among the Africans themselves. And because they are bigger, guarantee more items and products, and also likely have better distribution capabilities, the other marketplaces (such as Jumia, Kilimall, Konga, and others) should do regular development and evolve.

Talking about the better distribution of eBay and Alibaba

the next challenge of African marketplaces is the effectiveness of the distribution. As distribution is a crucial part of order-fulfillment, it is very crucial for marketplaces to make sure their distribution to the customers does not take too much time for the products to arrive.

Still talking about distribution and payment, the next challenge is cash-on-delivery payment. Impacted by the rush distribution across Africa, and also the marketplace should consider the additional costs for the cash-on-delivery payment services.

The next challenge is the high rate of return and refund possibilities in Africa. In some marketplaces even have more than 10.0% of refund and return demand from the customers for pretty various reasons. This is likely the last more crucial or happens in Africa. Meanwhile, the other challenges that were not mentioned before are pretty occasionally.

Are There Other Crippling Risks for African’s Marketplaces?

Yes, risks such as cultural, societal challenges, currency risks, and human resources are also common for the African marketplace. But we know that these risks are always stuck to every marketplace from around the world, and not necessarily only in Africa.