Tipping point for Social Commerce in Africa

Cop
4 min readJul 16, 2018

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“Social Commerce is the key to unlocking Africa!”

“‘Social Commerce is a game-changer for Africa!”

“Social, Social, Social”

“Africa is Social”

This is the narrative that you hear from those optimistic about our continents’ online commerce potential. Social Commerce is at a tipping point, and it is definitely a huge opportunity — however it’s not the one you are thinking about.

What is all this excitement about? Where does it come from?

Well lets look at the continents consumer landscape:

  • 1.3 Billion African customers by 2030
  • Customer spending to reach US$1 trillion in 2020 (from about US$500+ Billion today)
  • 100 million middle class customers with purchasing power of $400million per day, double that figure 2020.
  • Poverty is dropping rapidly, from 40% in 2018 to 20% in 2020
  • In 2050 about 60% of SSA (Sub-Saharan Africa) will be in cities
  • There is a rapid shift from the reliance on Minerals to Consumer spending

Now lets look at the continents social media landscape:

  • 32% of online commerce last year happened in Facebook Groups
  • 170 Million Facebook users, 97 Million log-in monthly, 97% of these log in via mobile.
  • 190 Million Whatsapp users, 172 Million log-in monthly
  • 76% of internet usage in Africa is for social media.
  • The internet is expected to contribute $300 billion in 2025, with 77% ($230Billion) of that expected to be via social media.
  • Smartphone connections will reach half a billion by 2020.

These sort of mouthwatering figures give a lot of people hard-ons. The combination of Africa’s explosive population growth and mobile adoption, combined with social media’s extensive reach, screams opportunity.

Lets take a closer look

Social commerce is defined as the use of social networks in the context of shopping. It has been dubbed ‘the new retail frontier’ by many industry professionals, because in Africa, some would go as far as to say social “is the internet”.

There are two basic types of Social Commerce:

Brand-Driven commerce and User-Driven (UD) Commerce.

Brand-driven social commerce is basically putting a “buy button” on advertised products. This commerce in a social context is very difficult to pull off in Africa, as it is heavily rooted in the losing way of ecommerce. Forcing people to click on links to clunky websites outside of their environment. This shoving of ecommerce into social, is like placing a chicken among eagles, they may all look the same, but when its time for mobility — only one will be left in the dust.

User-driven (UD) social commerce is when communities and friends with common interests come together with the intent to trade. It is a hive of activity driven by referrals, trust, and kinship. For example, Brownsense is a Facebook group that is made up of black South Africans who want to trade with each other. It is 164k strong, and after being a member for a few months — its amazing how much business gets done daily. The ‘intent’ is to trade and support other black entrepreneurs. Everything from apparel, to furniture, to farm fresh veggies, to meat, to cleaning is traded on that group.

Great software is an enabler of people’s offline habits.

This is the essence of African commerce, built around the underlying values of community, family and collective progress. Hence why 90% of the continents’ retail is informal, buying/selling within communities and local markets. The success of community commerce on platforms like Facebook is because they emulate what we Africans do offline.

  • Facebook Groups emulate public marketplaces (32% of commerce in Africa)
  • Whatsapp emulates buying from close family and friends.
  • Instagram emulates buying from our community role models.

The real transformation taking place is the movement from physical street corners to digital posts and conversations, skipping websites altogether. In other words, the hidden 90% of consumer spending is coming online and Social is the ordained channel it has chosen to formalise and grow its influence on the African economy.

The real transformation taking place is the movement from physical street corners to digital posts and conversations, skipping websites altogether.

With over 100 million more people joining this party over the next 2 years, the untapped potential is huge. The winning proposition to really unlock UD commerce will leverage the shared interest of users and offer them the opportunity to engage in social commerce that feels natural. Allowing users to connect with each other and also seamlessly enable them to transact wether they decide to interact on 1 platform or 3. This flexibility is the beautiful mess which the ecommerce chicken and its immobility can’t solve.

Chat is the language of African commerce and Khoyn speaks it fluently.

Any questions or if you would like to chat email victory@khoyn.com :)

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Cop
Cop

Written by Cop

Brands use Cop to grow revenue, loyalty & engagement by delivering amazing post-purchase experiences.

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