Africa’s retail market has caught global attention. The continent known for its natural resources wealth is adding its consumer strength to its CV which has been very impressive lately. Africa’s overall GDP grew 3.9 percent in 2014, up from 3.5 percent the previous year, according to the 2015 African Economic Outlook. Despite the continued decline in global commodity prices, the World Bank estimated a growth of 4 percent in 2015 which will rise to 4.5 percent in 2016.
The economy is not growing in isolation; Africa’s middle class has risen to become the fastest growing in the world. This growth is led by Nigeria, the continent’s largest economy where more than 7 million is estimated to be added in the next 16 years. The number of middle-class households in some 11 sub-Saharan African countries is expected to increase to over 40 million by 2030. These people armed with more disposable income could account for 10 percent of retail sales in Africa’s largest economies translating into $75 billion in annual revenue, by 2025. The going has been good in the retail industry, especially in the e-Commerce space. Investors that have bet on the continent’s retail potential are reaping bountifully.
In August 2014, leading African social marketplace, MOBOFree, announced that the total volume of items for sale on its marketplace was worth $526 million. The company said it expected that to more than double, to reach $1.5 billion by 2015. One year later, it has outperformed the forecasted figure by 30 percent. It now has more than 4 million registered users, half of which is active, as well as over 500,000 active classifieds in Nigeria. But the impressive growth, to Cristobal Alonso, CEO & Co-founder of MOBOFree, was the natural result of efforts put into growing the brand over the years.
Keep consumers safe, they will come back
“Exceptional focus on safety,” says Alonso while highlighting the keys to the company’s success. “It’s not a secret that high level of online scam is one of the core issues [preventing] sellers from trading online. Today, Mobofree is well known as the safest Nigerian marketplace with biggest arsenal of tool preventing online fraud.”
From MOBOguard program — which allows users to search for scammers, report them, and get a reward for it — to an ID verification program with a special automated algorithm to identify scam behaviour, MoboFree has proven its commitment to protecting the African consumer.
Alonso boasts about MOBOFree’s tens of millions monthly page views, all potential buyers of products listed on the platform. But they are not just left alone, the company makes selling easy by educating the market.
“Our agents are working in the biggest markets of Lagos and training dealers how to place adverts on Mobofree,” he says.
The best place to meet Africans is ‘mobile’
The mobile ecosystem is very important to Africa, contributing 5.7 percent to the continent’s GDP in 2013, which is expected to grow to 6.2 percent in 2020. Smartphone adoption rate is rising fast – 3G connections are expected to increase from 15 percent in 2013 to 52 percent by 2020. One of the contributing factors to the overwhelming growth of ecommerce has been the rapid adoption of smartphones. Tobi Lütke, founder and CEO of Shopify, wrote on the company blog that of the 100,000 online Web portals that use Shopify’s ecommerce platform, 50.3 percent of all traffic originated from either a tablet or smartphone. Like Shopify, MOBOFree understands the importance of mobile in the ecommerce space, especially in Africa, hence, the platform’s accessibility via any device, “even [the] oldest phones”.
Alonso and other co-founders of MOBOFree have a huge drive for Mobile. “Africa represented the biggest growth opportunity on the classifieds and social category and has a mobile focus to the internet,” says Alonso on why he chose Africa.
As the continent’s online retail market continues to grow, MOBOFree is determined to grow with it. Alonso says he sees the African internet retail market being as big as offline retail in the next 10 years, and developing some unique business models not seen in the world.
“And I see MOBOFree being part of those unique business models,” he says.