According to PayU’s global e-commerce report “The Next Frontier” covers online consumer spending spread across 19 emerging markets revealing African countries are on the brink of an e-commerce tipping point. Among the key African markets on focus were South Africa, Kenya, and Nigeria.
The continent has seen a rise in young digitally savvy shoppers working on strong demand for globally sourced goods and services across the region where parts of the population have access to increased disposable income. The report paid key attention to four fast-growing consumer segments; education, digital goods, fashion and gallantry, and beauty and cosmetics.
Of a population of 58.6 million people in South Africa, mobile internet penetration is at 56%, with over 22 million online shoppers. Internet penetration in Nigeria is at 46% with an impressive 76.7 million online shoppers (largest on the continent). Kenya follows next with a 31% internet penetration of its 52 million population.
Beauty and Cosmetics
Beauty and cosmetics comprise fragrances, skincare, haircare, make-up, and personal care. In the sectors of beauty and cosmetics in South Africa, PayU gives the figure at 140% between 2019 and 2020. Q3 spending was ramped up increasing spending by 229% compared to a similar period in 2019, fueling a 69% to $169m by the end of 2021. In Nigeria, the figure will grow to $255m by the year’s end while in Kenya it will grow to $29m.
Fashion & gallantry
South Africa consumer spend in the fashion sector rose by 180% between 2019 and 2020, with an $11 transaction increase. Spending in Nigeria is expected to grow by $811m at the end of 2021, and $70m in Kenya.
South Africa’s e-commerce spending on digital goods is expected to grow by 46% between 2019 and 2021, with total spending valued at $336m. This was further boosted by a 69% growth in 2020 as more people are fixated on digital media platforms when at home. The digital goods sector in Kenya is expected to expand from 94% in 2019 to an impressive 160% by end of 2021.
In 2020 saw a massive education boom across the country as people tried to upskill. PayU data shows a year-on-year increase in spending of 67% in 2020 with average transaction volumes increasing from $136 to $404.