The rise of commerce on facebook – BusinessGhana News

Informal transactions through Facebook groups are threatening the success of e-commerce giants in Africa according to a recent straw poll on the impact of the Black Friday sale promotion on this fledgling industry.

According to our Black Friday Straw Poll, which ran in December 2017 among 2,031 respondents in Nigeria, South Africa, and Kenya, Jumia still remains the most preferred e-commerce vendor. Fifty-six percent of our poll respondents have shopped on Jumia before.

Interestingly, a significant number of online shoppers utilize Facebook groups. At 32%, Facebook is the second leading online retailer in the leading e-commerce regions. Through informal entrepreneurs who utilize this leading social media channel to either sell through their groups or similar interest groups, Facebook is proving to be a formidable albeit odd player in this space.

Mobile phones have become ubiquitous in Africa. The Sub-Saharan region is also home to some of the least internet connected nations in the world. Beyond the low internet penetration levels in some countries and the high data costs, e-commerce is portraying an opportunity for online retailers to reach the youthful African consumer population. Despite the numerous challenges that this nascent industry has faced in the region, there is a silver lining thanks to the expected rise in the use of technology in the content. Global e-commerce concepts such as the Black Friday sales are also picking pace in creating awareness among the target market as brick & mortar stores join in seeking a piece of this pie.

E-commerce Uptake
E-commerce in Africa is far from a success story. As experienced by the 4 major players, replicating the success of Amazon in Africa has been a pipe dream that many initial entrants realized as soon as they set shop. However, for those who stuck it out, the benefits are slowly trickling through.

Seventy-four percent of the 2031 unique respondents indicated they have purchased an item online before. Among the 74% of respondents who have purchased an item online before, a majority (22%) are those who buy something only once a month.

Amidst the slow growth, online retail outlets still grapple with their biggest challenge yet. Trust. Among the 26% (531) of respondents who indicated they had never purchased any items online, the top reasons cited were that they did not trust the site (29%), and they did not know how the sites worked (20%). This trend was also observed at the individual country level.

The low trust levels towards online retails can be demonstrated by the most preferred payment options. For respondents of our straw poll, when they shop online, a majority prefer to pay in cash upon delivery at 50%. Mobile money comes in a far second at 21% and debit cards a distant third at 14%. In Kenya and Nigeria, 52% and 51% respectively, of respondents indicated they preferred cash on delivery.

Black Friday Sale
Only 49% of the respondents who took the Poll had participated in the Black Friday sale month which ran from Nov 13th to Dec 13th for most online retailers.

The most effective channel for creating awareness among online consumers is social media. 55% of respondents who participated in the Black Friday sale month said they first found out about it through that medium. Websites and TV ads were the second and third common mediums of awareness at 15% and 13% respectively.

The sale is now attracting brick & mortar retail stores with many hoping to cash in on the new craze. According to the respondents who participated in the Black Friday sale month, 70% indicated they visited an e-commerce website while 30% indicated they went to an offline store/outlet. In Kenya and Nigeria, 75% and 73% respectively went to an e-commerce website to do their Black Friday shopping. In South Africa, clothing and footwear was more popular among online shoppers.

The most sought-after items during this sales promotion were electronics and accessories at 34%, household appliances (21%), and clothing and footwear (19%). In Kenya, electronics and accessories ranked the highest at 46%. In Nigeria, the most sought-after item was electronics and accessories at 29%.

Previous Black Friday Polls
In 2016, we carried out a similar straw poll among 1,251 respondents in Kenya, Uganda, South Africa, Ghana and Nigeria aimed at analyzing the impact of the Black Friday sales promotion on the uptake of e-commerce in the region.

Based on this past poll, there has been a significant change in awareness, however, trust is still a huge hurdle that online retailers in Africa are yet to overcome. The industry still holds a lot of promise both for consumers and retailers.

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