E-commerce is a vital lifeline for the ~US$25 trillion1 (€19 trillion) global retail industry. This rang particularly true in the first quarter of 2020, as Covid-19 quarantines locked down countries across the globe, confining shoppers to their homes – and their screens.
E-commerce service provider Oberlo2 predicted that by 2023, shoppers will spend one in every five dollars online3.
In recent years, emerging markets have become increasingly attractive to foreign brands, observed a Euromonitor International4 report5. These include countries with growing middle-class, urban populations such as India, China and South Africa.
Zooming in on Africa, research by McKinsey5 projected that the continent’s consumer spending would reach US$2.1 trillion by 20256, representing the region’s “single largest business opportunity”.
Younger digital natives accounted for over 25 percent of South Africa’s total population and millennials represented over 1.5 billion people in emerging markets this decade, Euromonitor International reported.8
Yet, millions of African consumers seem to have flown under the radar of most global brands. “At the moment, 90 percent of US and UK retailers don’t sell in Africa,” said Chris Folayan, CEO of MallforAfrica9, in late 201810.
“These businesses have dismissed the continent for reasons I have no clue of — they just don’t see what [it] can do,” he added, assuring that a local partner could help businesses overcome challenges such as lack of infrastructure and corruption concerns.
In 2012, Folayan launched MallForAfrica, an e-commerce platform which allows US and UK e-retailers to sell into Africa. In an interview with us last year, the entrepreneur recalled his journey of growing MallForAfrica from simple lines of code into a thriving site which has disrupted the market and receives more than an order a minute. Along the way, it partnered with DHL Express to deliver purchased items straight to customers’ doorsteps.
In April 2019, DHL Express took its partnership with MallForAfrica one step further, by collaborating with Link Commerce11 – the company behind the platform – to launch DHL Africa eShop.
The e-commerce service connects online shoppers in 34 African countries with over 200 UK and US sites by integrating the existing online retail and brokerage platforms developed by MallForAfrica and DHL Express’ global logistics network. It ships direct orders from the retailers to buyers, including those in Nigeria and South Africa, the continent’s online retail leaders12 (according to data provider Research and Markets13.)
DHL Africa eShop was launched amid stiff competition from market incumbents Jumia14, Konga15 and Takealot16. Global investor interest from the likes of Goldman Sachs17 and MTN18 had made Jumia’s owners, Africa Internet Group19, the continent’s first unicorn startup in 201620.
However, the competitive and growing landscape has only fueled DHL’s interest in the market, leading it to acquire a minority stake in Link Commerce just shy of a year from its launch.
“It shows our tremendous support of e-commerce in Africa,” said Hennie Heymans, CEO of DHL Express Sub-Saharan Africa, who holds a spot on the investee firm’s board. “It also positions us to realize our ambitions of growing the eShop offering globally.”
Chris Folayan shares Hennie’s enthusiasm for the move: “With the DHL investment, we are now able to grow faster by leveraging the amazing shipping network DHL has built globally. This will help us expand our white-label turnkey B2B eCommerce platform and provide online shoppers with the ability to shop more at great shipping rates fast,”
A BRIGHT FUTURE
According to Heymans, the e-commerce market in Sub-Saharan Africa currently offers some of the biggest potential for rapid growth in the world. The success of DHL Africa eShop is testament to the demand; since its launch and rapid spread across the region, tens of thousands of users have downloaded the service’s dedicated app.
Folayan is delighted, but not surprised: “Global e-commerce trade has exploded over the past few years with the advent of more free trade agreements being signed, the cost of getting online reducing globally, and more people being able to start their own e-commerce sites easily within minutes,” he explains.
“Delivery has always been a huge factor in e-commerce success and we have seen shipments get to our customers faster year-over-year,” he added. “The world has seen a huge positive shift with no end in sight.”
How one entrepreneur changed the way the world can export to Africa: read the inspiring story of MallforAfrica’s rapid ascent.
This article was originally published on DHL’s Logistics of Things and was republished with permission.
1 - Statista, 2020
2 - Oberlo
3 - Oberlo sales forecast, 2020
5 - Euromonitor International Report, 2016
6 - McKinsey & Co
7 - McKinsey & Co Report, October 2017
8 - Euromonitor International Report, 2016
9 - MallforAfrica
10 - Chris Folayan, Delivered, November 2018
11 - Link Commerce
12 - Africa B2C E-Commerce Market 2019, Research and Markets, June 2019
13 - Research and Markets
14 - Jumia
15 - Konga
16 - Takealot
17 - Goldman Sachs
18 - MTN