As access to smartphones, the internet and fintech becomes a larger reality within Africa, the continent is increasingly positioning itself as a highly lucrative marketing within the e-commerce industry, which according to StockApps, will reach annual revenue of $46.1billion by 2025.
Africa is shaping up to be the next hotbed for internet-based businesses, currently worth around $33.3billion. As smartphones and the internet become more prevalent in African countries, the population has started to shift towards online shopping; as identified by StockApps’ latest report.
According to Statista, the continent’s e-commerce industry is expected to grow at a compound annual growth rate (CAGR) of 24.7 per cent between 2017 and 2024. In 2017, the industry’s annual revenue sat at just $7.7billion, and it is expected to increase to $42.3billion in 2024. Thus, the yearly income stands to increase by almost 500 per cent in seven years.
In the last couple of years, the pandemic has also helped the industry, like everywhere else on the globe. Thus, one can also expect the recent surge in growth to slow down in the coming years.
The African e-commerce industry brought in $28billion in revenue last year, which when compared to 2020’s $21.4billion, the 2021 figure represented a 31 per cent annual increase. As per the report, the annual growth rate is expected to gradually decline to nine per cent by 2025.
The industry is forecast to generate $33.3billion in revenue this year, following an increase of 19 per cent, and is expected to grow by 14.7 per cent to $38.2billion next year.
In 2024, the annual growth rate will further rise to 11 per cent, with $42.3billion in revenue. In 2025, the annual revenue will reach $46.1 billion on the back of a nine per cent annual increase, whilst the user base is set to surpass the 500 million mark by 2025
The growth in the African e-commerce industry is primarily down to the expanding e-commerce user base on the continent.
In 2017, only 138.9 million people shopped online in Africa, a figure that is expected to grow up to 519.8 million in 2024, at a CAGR of 17.9 per cent. It is interesting to note that the revenue growth rate is higher than that of the user base.
Furthermore, the e-commerce penetration in the African population in 2024 is expected to be 40 per cent. Therefore, there is significant room for further growth in the African e-commerce industry.
