While old economy is busy figuring out how to make the most of the digital age, Africa is leapfrogging. What does that mean? Most old businesses are in the process of adapting to new consumer trends by implementing digital strategies and technological innovations for analog products and services. Africa is far ahead. In Africa, disruptive product and service innovations are taking placewithin the digital area. Taking a look at how the booming digital economy in Africa is embracing digital wholeheartedly, might just reveal the answers they are looking for.
With RCKT., I have the pleasure to work for Africa Internet Group, a leading ecommerce platform in Africa. Based on my experience, I’ve gathered some insights into how exactly the African digital economy is ahead of ours in several ways:
1. While we’re expecting the future to be mobile, Africa is already mobile-only.
Internet in Africa is completely different to what we’re used to in Europe. Most people in Africa will experience the internet for the first time on a phone, and more and more on a smartphone. According to Google Africa, 76% of its users access Google via their mobile device. Nigeria has become a pioneer and a true brain-wrecker for the mobile industry and global retailers, with a growth rate in mobile internet penetration of more than double that in western countries.
Africa, and more particularly Nigeria, has managed to hijack the traditional technological evolution of the West, emerging as the utmost digitally integrated economy. How do African businesses deal with it? Beyond having a responsive website and a consumer-friendly app, they integrate a full and comprehensive cross-channels mobile strategy. Jumia, commonly referred to as the Amazon of Africa, even handles customer service issues through WhatsApp, including order confirmation and delivery status. The key is to build trust and to engage in the two-way conversation that is such an integral part of the retail experience across the continent.
2. While global retail businesses are ignoring payment innovations, m-payments are booming in Africa.
There's been a lot of debates around mobile payments over the last years. The main challenge the mobile payments market faces in old economies is adoption. Nevertheless, mobile share of ecommerce transactions is forecast to reach 40% globally by year-end according to Criteo. Meanwhile, in Africa and especially Kenya, M-Pesa, an SMS based money transfer system that allows individuals to deposit, send, and withdraw funds using their cell phone, has transformed economic interaction in Kenya over the last 10 years. Kenya, with over 60% mobile-payment rate, welcomes this mobile technology as a pioneer.
3. While we are debating the nature of digital native identity, Africa is personifying the digital native continent.
Regional SMEs and young entrepreneurs are fueling economic growth all around the world. These are even more important in Africa, where small and growing businesses create around 80% of the region’s employment, establishing a new middle class and fueling demand for new goods and services.
According to the International Monetary Fund, by 2035 the number of Africans joining the working age population will exceed that of the rest of the world combined. And they will all be digital natives. Instead of debating the role of entrepreneurs in the economy and how to integrate youth, established companies in Africa are already accompanying young entrepreneurs to take off with their ideas locally. Last year, Facebook and Jumia partnered to host the first ‘Boost Your Business’ event in Nigeria. More than 500 Nigerian entrepreneurs gathered to network, hear about marketing best practices, and learn about how they can use Facebook and Jumia to grow their businesses.
4. While we are fretting over missing «the next big thing», the very first African unicorn has already been discovered
With digital technology, Africa has experienced fundamental changes in the competitiveness of its businesses. Recent investigations into global economic growth state that 7 out of the 10 fastest-growing economies are located in Africa. Africa is progressing rapidly and has great potential to be a big winner in the long run. At the beginning of February, Jumia, along with AIG, joined 151 unicorns – private startups valued at US$1bn – across the globe.
The continent is abuzz with rich economic growth, young talent, creative ideas, disruptive innovation - and the rest of the world is beginning to take notice. Keep an eye on it.
You can read this article on RCKT. Blog: http://blog.rckt.com