According to Nikulipe’s 2024 report, e-commerce is experiencing significant expansion, driven by digitalization and the strong interest of young Africans in technology. However, this growth varies by region across the continent and depends on specific factors.
African e-commerce: Booming sector
Lithuanian FinTech company Nikulipe, specializing in cross-border payments, released the 2024 edition of its report on payments and e-commerce in Africa on June 4th. This document, titled « Payments and E-commerce in Africa 2024 », highlights the rapid growth of e-commerce in Africa, with a projected growth rate of 49 % by 2028. The African e-commerce market, valued at 30.71 billion USD in 2024, is expected to reach 45.72 billion USD in four years.
Online demand also shows significant growth potential and is expected to involve 40 % of the continent’s population by 2025. In comparison, online shoppers accounted for just 24 % in 2020 and 13 % in 2017. In other words, 519.8 million people will make online purchases in 2025, corresponding to a compound annual growth rate (CAGR) of around 17 %.
This increase in online demand is mainly due to the widespread use of smartphones and the growing adoption of digital payments. However, factors such as technological infrastructure, economic conditions, and regulations regarding digital payments also influence this trend.
Opportunities for businesses in Africa
The emergence of e-commerce significantly contributes to business development in Africa. This sector allows access to a broader market, even beyond local borders, and reduces operational costs by minimizing the need for physical infrastructure. E-commerce encourages entrepreneurship by fostering the creation of businesses, particularly among young people.
Businesses looking to enter or expand in this market must adopt a mobile-first approach to meet the needs of a population primarily connected via smartphones.
By leveraging increased connectivity and digital payments, these businesses can not only capture a growing market share but also contribute to the expansion of the digital economy on the continent. The future of e-commerce in Africa looks promising, with significant growth potential still largely untapped.
Young demographics and technological affinity
Africa, with 1.4 billion people, has a young demographic structure. Nearly 70 % of the population is under the age of 30, with an average age of 19.7 years. This generation, born in the digital age, favors online shopping. The importance of this demographic dynamic translates into considerable opportunities for businesses that adopt a « mobile-first » strategy, targeting a generation accustomed to using mobile technologies.
Strong mobile penetration
The increasing adoption of smartphones in Africa is a key driver of the rise of e-commerce. According to Nikulipe’s report, these devices will become increasingly accessible, gradually replacing basic phones.
The Global System for Mobile Communications Association (GSMA) predicts that by 2030, more than 1.2 billion smartphones will be in circulation in the Sub-Saharan region, representing an adoption rate of 88 %. However, this increase is not uniform across the continent. In 2021, countries like Gabon, Morocco, Côte d’Ivoire, Mauritius, and Eswatini had nearly 100 % penetration rates.
Rising connectivity and fintech adoption
The number of internet users in Africa is expected to increase from 570 million in 2022 to over 890 million by 2028. Already a global leader in mobile internet usage, Africa generated 69 % of its web traffic through mobile users in 2021. Mobile payments are also experiencing strong growth, particularly in regions with low banking rates.
In the Sub-Saharan region, mobile payment solutions and e-wallets dominate online transactions. In North Africa, while cash on delivery remains common, mobile money payments are quickly gaining popularity.
Noteworthy specific factors
While the report presents a promising growth outlook, the dynamism of this market can vary by region. Each region of the continent has unique characteristics influenced by digital infrastructure, economic strength, and payment preferences. Foreign investments play a crucial role in this growth. Multinational companies, such as Amazon, have heavily invested in e-commerce in Africa, creating opportunities for local businesses and consumers.
Government initiatives also shape the maturation of the electronic market. Many African countries are implementing initiatives to encourage innovation and the creation of tech businesses. For example, the Kenyan government has launched programs to develop the ICT industry and attract foreign investment. Public policies favoring innovation and digitalization also contribute to this growth.
