Platforms including Jumia, Uber and Travelstart can, in addition to matching buyers and sellers, raise incomes and boost economic growth.
Technology and the online market place will create three million jobs in Africa in the next five years, a new report by Boston Consulting Group (BCG) has forecast.
The How Online Marketplaces can power employment in Africa’, notes that platforms including Jumia, Uber and Travelstart can, in addition to matching buyers and sellers, raise incomes and boost economic growth.
“While online marketplaces are often seen as disruptive forces in advanced economies, in Africa’s less-structured economies they can be tremendous catalysts of economic development,” said Ms Lisa Livers a BCG partner and co-author of the report.
Concerns that growth in online marketplaces will merely cannibalise the sales of brick-and-mortar retailers are misplaced in the case of Africa, the report states.
There were only 15 stores per one million inhabitants in Africa in 2018, compared with 568 per million in Europe and 930 in the US.
e-commerce
This extremely low penetration suggests that there’s minimal risk that e-commerce will displace existing retailers and that much of the population is underserved.
"We meet Kenyan SMEs on a daily basis with great products, but who struggle to scale their businesses for lack of capital. Growing in the offline world means more shops and more stock — which takes working capital,” said Jumia Kenya managing director Sam Chappatte, adding that “online marketplaces allow these entrepreneurs to both reach new customers without additional investment and build up a digital sales history that can be used to unlock finance at a future point.”
According to the report, along with creating new jobs, online marketplaces can stimulate skill development, boost supply and demand for goods and services, and bring more people into the formal workforce.
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