The United Nations Conference on Trade and Development (UNCTAD) has released a report on the global B2C E-commerce Index. According to the report, Mauritius, South Africa and Nigeria lead the rest of Africa.
The UNCTAD B2C E-commerce Index measures an economy’s preparedness to support online shopping. Last year, it covered only 7 economies but expanded to include 151 this year. Fourty-four of these were from Africa.
The index consists of four indicators. These are "highly related to online shopping" and for which there is wide country coverage.
These include; Account ownership at a financial institution or with a mobile-money-service provider. The consideration for this category is the percentage of the population aged 15 and above, with data sourced from the World Bank.
The second is the number of individuals using the internet as a percentage of the population. The data used for this is from the International Telecommunication Union. Third is Postal Reliability with data sourced from the Universal Postal Union, UPU. The fourth indicator considered the security of internet servers per 1 million people. With the data sourced from Netcraft.
Generally, the African region lags the rest of the world. With the Netherlands, Singapore, Switzerland, United Kingdom and Norway topping the list.
Mauritius – with a ranking of 55 – is the highest ranked African country on the list. While as many as nine of the bottom ten countries are in Africa.
Yet, the continent is showing progress in key indicators related to B2C e-commerce. Since 2014, sub-Saharan Africa has surpassed world growth on three of the indicators. That is; number of accounts, individuals using the internet and secure internet servers.
"While Africa needs to boost Internet penetration to grow e-commerce, it also needs to get more of its existing Internet users to trust the online market for making purchases."
The top 3 African countries each have a distinctive strength in one of the four areas measured by the index.
Highest ranked Mauritius has a considerable 12 point higher score than the next African country. This small island developing state scores relatively high in all four areas, but particularly with regard to the share (90%) of the population having an account. In an effort to get more SMEs online, the Government launched a shopping portal in 2018 offering tax free purchases.
Nigeria, the most populous African nation, ranks second. Largely thanks to a significant increase in postal reliability as measured by the Universal Postal Union. As Africa’s largest B2C e-commerce market - both in number of shoppers and revenue - reliable delivery of products is critical.
Third placed South Africa is level with several other African countries for its Internet penetration. These are; - Cabo Verde, Gabon, Mauritius and Morocco. With each having around six in ten inhabitants using the Internet in 2017. South Africa leads by some margin in the number of secure Internet servers per one million people. An indication of websites accepting online sales and payments.
The report also points out a weakness in the index. The indicators used may not be the most appropriate for Africa. "For example, having an account may not be as important given the popularity of cash on delivery for e-commerce," it notes.
"Similarly, reliability of the national postal service may not always be critical if other alternatives are available. In Nigeria, e-commerce company Jumia has over 500 vehicles that deliver to customers in the largest cities."
The other African countries to complete the top 10 were Tunisia, Morocco, Ghana, Kenya, Uganda, Botswana and Cameroon.