The African last-mile delivery market was valued at $1.14-billion in 2021.
By 2030 this is expected to reach $2.35-billion, expanding at an annual compound growth rate of 8.45% between 2022 and 2030, says Frost & Sullivan consultant Nomvo Kasolo.
For Africa, home to 1.3-billion people and growing to 2-billion by 2050, the last-mile delivery market presents significant opportunities going into the future.
African cities are seeing extraordinary growth, with more than 60% of Africans expected to live in cities by 2030, notes Kasolo.
“With this comes higher demands for efficient supply chains into growing urban areas and the remaining rural space, in order to avoid expansion of the rural-urban divide.”
In 2021 alone, 21 transport startups were established in Africa, addressing issues as such as digitisation and last-mile delivery solutions.
Kasolo says the last-mile sector can be segmented into categories by product, industry, sales channel, delivery type, service speed and geography.
“Based on current trends, players with the fastest turnaround times across all categories will enjoy the largest growth.
“The waiting time for consumers has been cut from the previous five to six days, to one-day or same-day delivery.”
Kasolo says this shift has created many opportunities to establish efficient sales channels.
Digital communication platforms that allow for easy returns, exchanges, and increased connectedness between client and vendor are gaining ground, including the likes of Kobo360, WumDrop, Pargo and so forth.
“Aside from newer entrants, larger industry giants are also creating innovative models to reduce shipping costs and ride this opportunity wave,” she notes.
“Regional expansions of newer entrants and established players are happening in Egypt, South Africa, Nigeria, Ivory Coast, Tunisia, Ghana, Ethiopia, Zambia, Kenya, and other markets.
“With most of the regions, the growth needs to be met by additional investments in key infrastructure (physical and digital) to ensure long-term solutions.”
Overall, the high-potential areas in the next decade are expected to be through growth in business-to-customer models (by product type), e-commerce (by industry), distributor segment (by sales channel) and parcel services (by delivery type).
In South Africa alone, the revenue generated by e-commerce is expected to reach $7.07-billion for 2022, growing to $14.9-billion in 2027, says Kasolo.
The positive trend in Africa’s last-mile story could, however, be cut short if challenges in supporting infrastructure and restraints like corruption are not addressed, she adds.
