China Is Exporting E-Commerce Culture to Africa

26/03/2019

PRC sets model for African e-commerce. From Egypt to South Africa, Chinese hi-tech firms such as Alibaba are leading the shift

 

Last year in Chengdu hundreds of ambassadors and counsellors represented 19 African nations met with the leaders of China’s technology sector for the first China-Africa E-commerce Industrial Development Forum. China is exporting e-commerce culture to Africa and African e-commerce market is booming.

 

 

Today, some of China’s largest tech giants are establishing basis in Africa’s still immature e-commerce market, and PRC hi-tech companies such as Alibaba, Tencent, Oppo, Xiaomi and more are leading African digitalization. Once again, Jack Ma kickstarted a number of preliminary initiatives aimed at sewing ties with promising African tech talent.

Last August, Alibaba’s founder launched a $10 million annual prize scheme for budding African business people, called the Netrepreneur Prize, which Ma hopes will foster hundreds of future tech leaders over the next decade. Each year candidates will pitch their business models and 10 finalists will receive a $1 million grant from the Jack Ma Foundation and mentoring from leaders in the industry. According to Jack Ma this prize “demonstrates our support of a next generation of young entrepreneurs across Africa that is paving the way for a better future and impart positive change in their communities.”

 

Emerging market where almost 300 million Africans have mobile wallets.

 

E-commerce is far from Africa’s largest earner, but the market is growing, and fast. Chinese companies are still dipping their toes into Africa and their seeking collaborations with Western firms and players too. Thus, Chinese giants such as Alibaba are hoping to emulate in Africa what they have rolled out in other emerging markets, such as Turkey and India, capitalising where the US players such as Amazon have shown less or no interest.

 

 

According to research site Statista, the industry was worth $16.5 billion in 2017 and is poised to hit $29 billion by 2022 as necessary infrastructure, such as mobile phone ownership, and household incomes continue to rise. By 2025, when half of Africans have internet access, this figure could be over $75 billion, say Mckinsey.

Data show how for companies already setting up shop, this growth is paying off. Alibaba, with 4.2 million customers on the continent, saw the value of transactions through its AliExpress portal almost quadruple in 2017, driven by hungry consumers in key markets such as South Africa, Nigeria, and Kenya. But China is doing more, it is exporting an e-commerce culture followed by its idea of “cashless” society. And consumers appreciate this change.

 

China may also offer a model and inspiration for less developed economies. Africa already has familiarity with ideas like mobile payments and more than 300 million people have e-wallet.

 

For example, one of the largest service providers, Kenya’s SimbaPay, recently launched a service piggy-backing on China’s WeChat messenger, allowing money to be transferred cheaply and easily between merchants in Africa and China both using the app. Furthermore, homegrown platforms such as Kilimall or Nigeria’s Jumia, both of which have operations in several countries and stock goods from China, reflect the appetite both among customers and local entrepreneurs.

 

 

Disrupt Africa, a platform for African startups, says there are currently close to 300 e-commerce ventures across the 54 countries, all trying to get in on the activity. The key step now, experts say, is for Chinese firms to tailor services to local African markets. As a diverse continent composed of different nations, languages, and subcultures, this will be no mean feat. But the mobile phone revolution in Africa driven by Chinese brands sets a good precedent.

 

China is testing the water, PRC hi-tech know exactly how to deal a developing market such as the African one.

 

Online platforms are helping Africa’s growing middle class to bypass traditional, often more costly, retail channels and ease access to global markets for African producers. But China is still testing the water. China is Testing the water, PRC hi-tech know exactly how to deal those challenges concerning a developing market such as the African one.

And China sets model for Africa e-commerce. China, whose digital economy has experienced massive growth over the last decade, stands as a good model for Africa as the continent moves toward enhancing its engagement in e-commerce and the evolving digital economy.

Beijing often argued how today we see in Africa what the world saw in China a generation ago. But China’s growth has been aided by its ability to absorb new technologies and leapfrog stages of development. Will this be Africa’s path?

 

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