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Visa Consulting & Analytics

April 2021


2 - 3 Minutes

The last billion connections: Sub-Saharan Africa’s eCommerce potential

For the last 10 years eCommerce has experienced phenomenal growth rates around the world and even recent setbacks as a result of the continuing COVID-19 pandemic haven’t stopped its rise. In fact, eCommerce sales are projected to grow to $7 trillion across the globe by 20241.

Sub-Saharan Africa (SSA) may currently be one of the globe’s smallest eCommerce regions, but it shows strong growth potential.

Leading markets such as South Africa, Nigeria and Kenya are starting to mature, giving an established foundation and when twinned with the growing eCommerce penetration offers payment issuers and acquirers new opportunity while helping to further accelerate the expansion of eCommerce in the region.

The latest Visa Consulting & Analytics Opinion Paper uncovers the key macroeconomic and demographic trends that will reinforce growing digital adoption going forward.


Economic and demographic factors support the digital transformation

While the COVID-19 crisis has contributed to the acceleration of digital commerce in Sub-Saharan Africa, the wider macroeconomic and demographic fundamentals are set to support continued eCommerce growth.

The Sub-Saharan African economy is projected to rebound by 5.2 percent in 2021, up from the 4.4 percent contraction in 2020—the first recession since the aftermath of the financial crisis.2 Household income levels are also projected to rise in the near term, with almost two thirds of households in SSA expected to earn US$5,000 or more by 2025.3

On top of that, greater technological adoption and young, growing populations will provide further impetus for the rising opportunities in eCommerce in SSA. GSMA Intelligence, a mobile industry expert, projects the number of mobile subscriptions in SSA will more than double and reach 1 billion connections by 2024, up from 477 million in 2019.

What role do issuers, acquirers and merchants in Sub-Saharan Africa have to play?

  • Designing eCommerce for mobile: This means ensuring that customers have seamless access through mobile channels, particularly when it comes to making digital payments on mobile devices.
  • Ensure a variety of payment channels are available: Customers want options, so digital payment providers need to respond with multi- to omni-channel options. Payment facilitators are a good potential partner in this space.
  • Make cross-border transactions seamless: eCommerce in the region is being driven by cross-border transactions. To make the most of this revenue opportunity these transactions need to be enabled from the point of issuance to the point of acquiring.
  • Cater for local: While global cross-border merchants play a key role, local SSA merchants are rising up. There is an opportunity to support these players by not only providing digital payments support, but broader merchant value added service offerings.
  • Keep the customer at the center of product design: Digital enables providers to personalize their products at scale, making the most of this opportunity means that providers can create the best customer experience for the emerging digital savvy SSA eCommerce customer.
  • Go virtual: Prepaid cards have a strong eCommerce value proposition, but this opportunity can be taken one step further – by going virtual.
  • Provide payments infrastructure adapted for goods and services provision: eCommerce in SSA isn’t restricted to retail, so the payments infrastructure shouldn’t be either, it needs to look at the wider scope of platform and individual merchant enablement for services provision.
  • Ensure strong fraud protection controls aren’t impeding growth: Fraud controls are essential to protect all parties involved in eCommerce – customers should be educated about them so they feel safe spending – but these controls shouldn’t stop customers from completing trustworthy eCommerce transactions.

Consumers quickly shifted to digital channels – and remained there

A survey by Visa in June last year found 59 to 81 percent of consumers in South Africa, Nigeria and Kenya had tried online shopping for the first time for groceries, pharmaceuticals or food delivery services.4 Most consumers surveyed in these three countries were satisfied by their first-time online shopping experience and said they would continue shopping online even once the COVID-19 situation is contained.

“Our VisaNet data of consumer spending also supports the reported consumer intentions. Consumer spending on digital channels went through three distinct phases last year; pre-lockdown, between January and February; lockdowns, between March and May; gradual easing, from June onwards”, explains Mohamed Bardastani, Director at Visa Business and Economis Insights, CEMEA.


eCommerce transactions share of total transactions in Sub-Saharan Africa5

An analysis of consumer spending shows rapid acceleration in eCommerce spending in the lockdown period, when governments imposed shelter-in-place requirements.

“Interestingly, consumer spending on digital channels in SSA remained elevated even once governments lifted restrictions and people started to venture out and move around more—the average share of eCommerce spending as a percentage of total consumer spending in the post-lockdown period was 1.8 times the average share in the pre-lockdown period in Sub-Saharan Africa. This suggests that consumer habits may have changed permanently by shifting spending to digital channels versus offline channels. The same Visa survey also found consumers in Nigeria, South Africa and Kenya have increased their usage of contactless cards, mobile payments and digital wallets as substitutes for cash, because these payment methods were considered safer and more hygienic, explains Bardastani.”

In this Opinion Paper, Visa Consulting and Analytics Team consider the main trends and eCommerce developments across Sub-Saharan Africa, as well as the type of opportunities open to today’s issuer, acquirers and merchants.

For more insights please read our full opinion paper here and its complementary economic analysis of the recent regional eCommerce trends here. To find out how we can help you address any of the ideas discussed, please get in touch with our Visa Consulting and Analytics team.

1 Source: The Wall Street Journal: E-Commerce to Total a Quarter of Global Retail by 2024, GroupM Forecasts, Decemeber 2020: https://www.wsj.com/articles/e-commerce-to-total-a-quarter-of-global-retail-by-2024-groupm-forecasts-11608116401

2 IMF, World Economic Outlook, October 2020: https://www.imf.org/en/Publications/WEO/weo-database/2020/October

3 McKinsey & Company, Lions (still) on the move: Growth in Africa’s consumer sector. October 2017: https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/lions-still-on-the-move-growth-in-africas-consumer-sector

4 Visa COVID-19 Impact Tracker, 6,614 consumer interviews and 1,583 merchants across 7 key CEMEA markets

5 Visa Business and Economic Insights, VisaNet. Value of card not present transactions/total transactions

All brand names, logos and/or trademarks are the property of their respective owners, are used for identification purposes only, and do not necessarily imply product endorsement or affiliation with Visa.

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