The biggest bottleneck to electronic commerce in East Africa

Amazon, which has been said to be the worlds largest online retailer , with custom presence in United States, Canada, United Kingdom, Germany, France, Italy, Spain, Austria, Japan, and China saw consumers spend more than USD 1 billion via mobile devices in the period 2009 – 2010. Africa is missing from the list of regions where Amazon has a presence and this had led to many ventures seeking to fill this glaring gap. Internet penetration in Africa has been wanting but recent investments in undersea fibre cables to boost broadband access has served to expose more consumers to the power of the internet. Access to the internet via mobile devices has also grown , with mobile access more often than not being the first touch point.

While there are many ecommerce services, few such as Kalahari from the well heeled Naspers Group would feature on common lists of well known initiatives. Why are these services not better ingrained into our daily fabric? Why haven’t they taken off, yet they offer  many benefits?  Two thoughts on those questions; first I am of the opinion that we are yet to map the offline retail experience to digital platforms in a way that will shows consumers value and second, which I believe poses the largest challenge is the lack of a proper address system in East Africa.

Ecommerce, which covers both mobile centric and internet based experiences has a number of components  in its ecosystem.  It includes the process of creating and maintaining inventory, marketing, selling, delivering, servicing and paying for products and services. A large percentage of ecommerce sales is of physical goods which means that the same must be delivered to client locations.

Looking at the processes in the ecosystem, inventory does not pose a challenge, neither does the availability of platforms to market and sell inventory, or the availability of payment gateways to facilitate payment for goods and services.  Since customer satisfaction is key to the success of any initiative, that the East African consumer cannot be reliably located means that the last mile of the ecommerce ecosystem, which is delivery cannot be fulfilled seamlessly. This is already mirrored in physical shopping experiences where, once is compelled to sketch out a map to their residence, or the landmark based directions you  give your  pizza delivery guy to ensure your meal gets to you warm.

Unless we find a way round the address system, which currently looks “unfixable”, I fear that the benefits of electronic commerce will be lost on us, or will at the bare minimum see low adoption tied to corporate addresses.

I am curious to hear your suggestions on a work around.

An Africa based entrepreneur in the pursuit of opportunities without regard to resources currently controlled striving to build services that have real-world value for my beloved continent and beyond while having fun along the way.

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