When thinking about African economy, eCommerce is not typically one of the first things that come to your mind. Yet this industry is one of the most promising in the continent, reaching out the whole world as an attractive investment. Inolvement in African eCommerce holds the promise of huge potential results against little investment.

“As the next frontier, Africa is seeing some good investment from credible investors, which is helping to drive growth,” says Daniel Guasco, head of Groupon South Africa. He reckons that if you compare “brick and mortar as your starting point, an ecommerce company is easier and quicker. You don’t need retail space and shopping centres”. (featured in Venture Burn)

There is another reason why eCommerce is so promising in Africa: even though the online market may well be saturated in a shorter period than the rest of the world, it actually solves a real problem — the lack of a physical retail accessibility for all.

In contrast to what we may observe in some African countries, within the Middle East eCommerce is a steady consolidated business, with trade organizations, mature shoppers and a high available income among online buyers. These factors together create fertile ground for investment opportunities.

Let’s us take a look at some of the most interesting markets. We brought together market size numbers and 3 year growth projections (from 2014 to 2017) from eMarketer.com and numbers on internet penetration (% population with internet) in 2014 from InternetLiveStats.com.

Absolute market size: $318.2 million
eCommerce sales per inhabitant: $ 6,14
eCommerce growth projections: 30%
Internet Users: 24.909.854
Internet Market Penetration: 46.88%

Market specifics: Online buying behavior in South Africa is becoming increasingly similar to mature markets such as the United Stated and Europe. With 50% of all the shopping predicted to be done online by 2015 (WebWire.com) , South Africa presents itself as an attractive market for eCommerce. The low number of sales per inhabitant shows that the online sales are still very concentrated in a small part of the population.

Andrew, from Yuppiechef.com: “South Africa has finally started catching up to the rest of the world in terms of E-commerce adoption, mainly because there are now decent online stores to shop at. The traditional brick-and-mortar retailers are starting to invest in their online stores, and there are strong specialised online stores solving the difficult problems of logistics and providing great service.” According to Andrew the biggest obstacle is a lack of consciousness and a lack of bank lending for eCommerce prohexts.

South Africa Info: “South Africa has enormous potential as an investment destination, offering a unique combination of highly developed first-world economic infrastructure with a vibrant emerging market economy.”

Absolute market size: $ 210.08 million
eCommerce sales per inhabitant: $ 1,5
eCommerce growth: 25%
Internet Users: 67,101,452
Internet Market Penetration: 37.59%

Market specifics: In Nigeria, likewise other african countries, a new generation of young, internet-savvy individuals has embraced technology and is providing unique opportunities for the huge growth of online businesses pushing the government and external institutions to invest in the development of infrastructures. Nowadays, more than 32.88% of the Nigerian population already has access to the internet and the number of mobile phones increased to 87 million representing an attractive market for mobile commerce. Known for its world-famous online scams, Nigeria still struggles with ensuring safety on all online payments. World Business Culture: “The fact that Nigeria is not a magnet for international investment could be seen as a tragedy of immense proportions. Years of political instability, regional strife and the weakening influence of massive corruption have resulted in the country failing to capitalise on its many advantages; leaving the mass of the population in relative poverty and the country enormously infra-structure poor.”

Absolute market size: $223.65
eCommerce sales per inhabitant: $ 2,71
eCommerce growth (projections): 35%
Internet Users: 40.311.562
Internet Market Penetration: 48.34%

Market specifics: In Egypt, similarly to what happening in many other Arab countries, startups still struggle to grow within the online scenario mostly due to the difficult access to financial sources. Egypt is a difficult market to work in due to its high levels of computer iliteracy, poor infrastructure and weak economy. Despite all this, Egypt still seems to be an appealing market for many due to the low cost of doing business and the natural will for online shopping portrayed by consumer behavior among internet users. Daily News Egypt: “Structural challenges that hinder the private sector’s activity in the region: Business managers rated government intervention, anti-competitive practices, corruption and regulatory policy uncertainty as their biggest concerns, while bankers cited a lack of corporate transparency as the main obstacle to extending more finance to small and medium-sized enterprises.”

Absolute market size: $ 15 billion
eCommerce sales per inhabitant: $ 1.667
eCommerce growth (projections): 45 %
Internet Users: 8.807.226
Internet Market Penetration: 93.24%

Market specifics: Online businesses are currently considered a megatrend for the United Arab Emirates especially within Dubai, Qatar and Kuwait. Moreover, eCommerce is already considered the fastest growing business within this region for companies that deliver good quality products with an important twist of innovation. One of the main constraints you should be aware of when doing business with or in the UAE is relates to cultural differences that may be too restrictive for foreign investors. However, if you aim at understanding the local “way-of-doing-things” and aim at bringing development to this territory you will soon be well-rewarded. Emirates 24/7: “A better business climate that enables entrepreneurs to build their businesses and reinvest in their communities is key to local and global economic growth.”

One of the major concerns investors have when thinking about expanding to Africa concerns corruption. According to Andrew Legg, up until a decade ago, bribery and corruption were an accepted part of doing business in Africa. However, with increasing participation of foreign companies, things are gradually starting to change. Risk.net “It is of course possible to undertake business in Africa without resorting to bribes, but companies should be aware of the potential knock-on consequences. For example, operational costs can be higher if bribes are not paid and time lines may mysteriously extend without facilitation payments to speed up processes.”