Investing in The African Digital Economy? 3 Important Factors to Consider

It’s no secret that the African digital economy is rapidly developing. The ability to push services and products to a global audience at lower cost all while maintaining customer relations are some of the benefits that attract foreign investors.

According to a report from the International Trade Center, Africa’s digital economy is expected to grow to a $50 billion industry by 2018.

Investing in the African Digital Economy

However, its true potential remains largely untapped. As investors from the UAE and Jordan convened in Kenya to discuss and explore trade opportunities, a focus on the digital economy was prevalent owing to improved internet infrastructure as well the high adoption of mobile devices.

Still, as foreign investors focus on tapping into Africa’s lucrative online economy, they should keep in mind that setting up an e-commerce shop in a foreign land isn’t just about translating the website content.

Investing In The African Digital Economy Goes Beyond Translating Website Content

It’s important to acknowledge that the African digital market can test an investor’s patience. Time horizons and return models that fit other markets don’t always work in there. Even the most experienced, sophisticated companies can be forced to re-calibrate. That said, here are three crucial points to keep in mind if you want to invest in Africa’s eCommerce sector;

Consider the Customer Experience

For instance, in Kenya, cash is still the preferred mode of payment by consumers. So much so that Uber was forced to introduce cash payment for their services. Jumia, one of Africa’s largest e-retailers, also reports that 65-95% of orders placed on their platform are paid using cash. Other than the preferred payments methods, it’s also important to consider the shipping process; do you need to find the last mile delivery service?

Consider Technology in Use

Owing to the lower price of mobile phones compared to laptops and other digital devices, the majority of Africans will use smartphones to access the internet. With this in mind, foreign investors should ensure their e-commerce platforms are mobile-responsive if they wish to thrive in the African digital economy. But more important than your e-commerce website being responsive it should be compatible with the most popular browser in Africa: Opera Mini.

Consider the Support Expectations

For e-commerce ventures, customer service is a great differentiator. Foreign investors will need to devise strategies that ensure consumers are satisfied and delighted to boost loyalty. Given Africa’s affection for social media sites, running a customer service program on Facebook, Twitter and Instagram would be highly ideal.

Conclusion;

The availability of a large market of almost 1.2 billion, a young and tech-savvy population and rising internet penetration coalesce to make the African digital economy a haven for foreign investors. At Legibra, we believe E-commerce has great potential to become a significant part of the economic activity of Africa. The reason why we remain committed to providing the most professional and scalable web services in Africa.