Although the region’s economic growth is in its right direction, it is very possible to reach peak performance and rub shoulders with the first world economies in the near future, provided there are radical and fundamental changes applied across all sectors, politics included. Certain trends and perspectives need to be adapted to position the African business market on the globe. Relax as we walk you through the new market trends African business needs to pay attention to.
E-Commerce Business Will Continue Rising
It is undeniable that the growth of the E-Commerce industry in Africa is impressive. The continent has taken a growing interest in online business. The itch for this industry keeps growing every day having one of the most digital minded populaces of about 400 million internet users. Good case study examples are Jumia and Econet Wireless Group.
Jumia – one of the blazing E-commerce platforms in Africa with a mission to connect African consumers to entrepreneurs; small, medium and large businesses, this medium eliminates the presence of middlemen. Launched in Nigeria in 2012, Jumia has created its footprints in 14 African countries with over half a million sellers since its commencement. The platform has created a solid reputation and has become a household name and a hub for services and products spanning from concierge, hotel and catering industry, retail, food and hospitality, talent recruitment, you name it. Jumia has experienced tremendous revenue growth since its inception. In 2018, its revenue shot to 19% (€40 million) and increased its customer base from 3.5 million to 5.5 million in the same year . Jumia also doubled its orders from 3.6 million in 2018 Quarter 3 to 7 million in Quarter 3 2019. The revenue metrics are poised to rise in the coming years.
Econet Wireless/Cassava Smartech- a diversified group that grew from being a telecoms giant to tech based group that provide home grown solutions riding of data and technology.
According to a report by Statista, E-commerce in Africa was valued at 16.5 billion dollars in 2017. Another report from consulting firm McKinsey highlights the value of E-commerce could shoot up to 75 billion dollars by 2025.
E-commerce is the new business in the region and will continue to dominate, brick-and-mortar stores will slowly fade out of the system, as many businesses will consider online stores. Business to consumer e-commerce index from the United Nations Conference on Trade and Development ranks 44 African nations with high acceptance of e-commerce business. As e-commerce is booming, African entities must seize opportunities that comes with technology and strategically position self. Easier said than done, right? E-commerce markets must leverage digital platforms and their elements to generate millions in sales locally and globally. Some of these elements include the use of visualization features in the sale of products and services. African online platforms should create physical interaction of products or services, eliminating static visuals, creating emotional connections through engaging videos, interactive content, consumer-generated media, among others. The products or services displayed on such platforms should go beyond mere posting of visuals.
The use of QR code payments will take a full course, although the usual norm of online transactions is mobile payment. A QR code is slowly creeping into the system and might soon become the norm for payment in the E-commerce industry in the next coming years. Online businesses should pay attention to this trend and make provisions for this upcoming feature.The inception of E-commerce and its rise has given way to complex digital technologies
It will serve a greater good for African online businesses to gain a better understanding of the dynamics and how it works. This knowledge has led to the success of brands like Amazon, Alibaba and Shopify. These success stories are achievable in Africa, only if we do our homework and follow duplicable system and address the core infrastructure. The industry needs to examine the mechanism, methods and skills used especially in the global industries so we can implement to fully benefit and reap better rewards.
Tailored and Personalized Customer Service and Experience in Business
In this new decade, customers and consumers critically hold the African business markets accountable. Making more progress in Africa businesses will require customized customer experience and services; attending to their specific needs. The days of showcasing all products and services, convincing customers and consumers to purchase through TV and radio ads are over. Providing too many options and too much noise for customers will be reduced. In this new decade, the customer will require precise a service and information that speaks to what they exactly want and need.
It is now up to African brands to act towards improving their strategies on how to enhance loyalty leveraging on digital tools to reach customers swiftly and effectively. If you do not take care of your customers other businesses will. It will be ideal for businesses to take advantage of digital technologies like chatbots understanding and answering customers’ questions and queries in real-time and quickly. Augmented Reality (AR) technologies, providing customers with the ability to test and explore products in the way that they would do in-person during the shopping experience. This gives customers a richer experience, and a game-changer for business with an online presence, this can help customers to better understand their needs and be convinced that the products that they intend to purchase meet their demands. These digital features can position African businesses to compete against global industries.
Another factor that will arise for businesses with an online presence is the role of user reviews influencing the purchasing power of a product and/or service. User reviews have the power to attract new clients or discourage them from purchasing because it is seen as genuine information from other customers. In this new era, user reviews will be pertinent, it will be the critical factor costumers will look out for before making a buying decision. These new and upcoming digital technologies can improve personalization, satisfaction and customized experience for shoppers. Providing great recommendations, and positive user reviews as this can be used as a marketing channel to generate revenue.
Youth demographic is the new target market
Back in the business days, your most needed marketing tools as a brand were found on billboards, TV and radio commercials. But now the dynamics are different, thanks to technology, the entire dispensation of marketing have changed as well as the demographics of the business target market. The youth populace has more purchasing power than ever before. According to Forbes, $200 billion revenue is generated every year in the United States from the youth demographic. African businesses need to understand the youth population is the biggest and ever-growing, to capture this market, businesses need to speak their language, know their likes, dislikes, desires, needs and get to understand their reasoning power. African brands can implement certain business strategies as a solid point to attract this demographic group. Brands should focus on providing engaging interactive content on their website and social media pages. To capture millennials, it provides more than key products through ads, brands should strategically develop content that attracts the demographics, make them loyal to the brand and grow with them.
Increased Skillset for Human Development
2020 and beyond will come along with a tight labor market, high and complex technology, and a tech-savvy generation. The level of technology has reached the point where robots are taking the jobs of humans, the biggest change in business is how internet machines will take over ranges of roles in business and job markets. Employees will either be forced to change career and some roles will die off naturally by the end of the decade. Thanks to Artificial Intelligence. It is critical for business owners and entrepreneurs to develop their human skill set and improve upon their development. Nurturing skills that robots or high technology cannot perform – intuition. It is time for human capital to invest in themselves with soft skills such as problem-solving, critical thinking, and emotional management aspect that can create a unique proposition for themselves in the job market.
Gone were the days where its business growth was determined by location or outreach; the wider the outreach, the larger the economic benefits. This ideation, no longer exists any more thanks to globalization, technology, instrumental policies, and measures such as the African Continental Free Trade Area (AfCFTA) launched by the African Union on March 21, 2018, which aims to facilitate easy trading and removing technical barriers to trade. These policies help create a uniform, smooth market within the region. Enhancing zero marginalization against entrepreneurs, their products and services from different parts of the region. This has enabled the businesses in the region to have intra-African trade activities giving the industry a boost in global trade.
The action can catalyze the region’s structural and economic transformation, so yes, it is an exciting time for businesses in Africa. The market has a greater chance to evolve into the next big thing. The challenges and barriers that used to hinder the growth of the African market are slowly fading away. Mindset shift is key to this transformation. The progress of the industry solely lies in the hands of the business owners and organizations who run these businesses and platforms to get acquainted with new knowledge, trends, creative ideas, resources and skilled manpower in order to gain a more rapid shift in the business world.
Article from AFRIC Editorial
Photo Credit : google image/illustration