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Social Media, not Online Marketplaces, Dominate e-commerce on the Continent

Africa has several Amazon-style retail platforms which can handle logistics and simplify payment. But those are not very popular, finds a recent survey by the GSMA, an association of mobile-phone operators, that tracked small businesses trading online in six African countries. In Ghana and Ethiopia, three-quarters of respondents sell exclusively through social media; only in South Africa do a majority use online marketplace too. Many entrepreneurs start with WhatsApp, where they create chat groups advertising their wares to friends. They might use the status bar to promote new products or their contacts list to keep track of customer preferences, says Mark Wensley of Caribou Digital, a research firm. As business grows, they can find a wider audience on Facebook or Instagram. A trusted motorbike driver might deliver goods. Payment is sometimes done through a bank transfer or mobile money, although cash-on-delivery is the most popular choice. One reason to do it yourself is that it is free. Online marketplaces charge commission, typically around 5-20% of the sale price.

SOURCE: THE ECONOMIST