RETAILX 2022 GLOBAL ECOMMERCE REPORT Logistics – Africa

Getting products into warehouses then out to customers has been a difficult challenge due to ever changing geopolitical events. Could technology play a part in changing behaviours?

In this series of features – originally published in the 2022 Global Ecommerce Region Report – DeliveryX looks at ecommerce logistics on different continents.

Africa
With over a billion people, almost 60% of who are under the age of 25, the African continent has a huge consumer base that companies want to engage with. With a growing number of these people now online, there are huge opportunities for ecommerce to take off.

A recent report by online payment service provider PayU found that South Africa has the continent’s highest internet usage, at 56% of the population, with Nigeria and Kenya at 46% and 31%, respectively.

However, ecommerce uptake was only at 37% in both Nigeria and South Africa, and 25% in Kenya. Further investment in infrastructure and logistics is needed to realise any potential, says Mahmood AlBastaki, chief operating officer of DT World, a subsidiary of DP World Group.

“Ecommerce’s continued growth cannot be feasible if logistics cannot support the increased movement of goods,” he notes.

“Supply chain optimisation is crucial, as poorly timed deliveries can lead to major monetary loss. Improving delivery routes, identifying the stumbling blocks in the supply chain and optimising shipping processes are not only cost-effective but also create a good customer experience and grow loyalty among consumers. Investing in physical and digital infrastructure is a must for all online platforms that want to succeed.”

One of the biggest challenges for the logistics industry in Africa is the lack of a unified address system. This leaves companies having to rely on customer descriptions and landmarks during the checkout process, with the driver required to keep in constant contact while en-route.

In a number of African countries, firms are repurposing ‘Boda Bodas’ – bicycles or motorcycles once used as taxis – for deliveries to deal with such challenges.

Others are taking to the skies. Zipline is a firm which designs, manufactures and operates drones from distribution centres in Rwanda and Ghana (as well as recently expanding into Japan). Growing from a medical essentials distribution startup, the company now uses autonomous drones to deliver grocery and ecommerce parcels direct to consumers.

For Africa’s ecommerce sector and logistics industry to really take off, technology seems likely to play a part – whether on the ground or in the air.

This feature originally appeared in the 2022 Global Ecommerce Region Report.

Image Credits:
Zipline

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