Informal transactions through Facebook groups are threatening the success of e-commerce giants in Africa, such as Jumia.
This is according to a recent poll by Geopoll; which shows that Jumia remains the most preferred e-commerce vendor in Africa, but Facebook is not far behind.
“56% of our poll respondents have shopped on Jumia before. A significant number of online shoppers utilize Facebook groups. At 32%, Facebook is the second leading online retailer in the leading e-commerce regions,” read a statement from Geopoll.
“Through informal entrepreneurs who utilize this leading social media channel to either sell through their groups or similar interest groups. Facebook is proving to be a formidable albeit odd player in this space,” the statement continued.
Mobile phones have become ubiquitous in Africa. The Sub-Saharan region is home to some of the least internet connected nations in the world.
Beyond the low internet penetration levels in some countries and the high data costs, e-commerce is portraying an opportunity for online retailers to reach the youthful African consumer population.
Despite the numerous challenges that this nascent industry has faced in the region, there is a silver lining thanks to the expected rise in the use of technology in the content.
Global e-commerce concepts such as the Black Friday sales are also picking pace in creating awareness among the target market as brick & mortar stores join in seeking a piece of this pie.
74% of the 2031 unique respondents indicated they have purchased an item online before.
Among the 74% of respondents who have purchased an item online before, a majority (22%) are those who buy something only once a month.
Amidst the slow growth, online retail outlets still grapple with their biggest challenge yet, trust.
Among the 26% (531) of respondents who indicated they had never purchased any items online, the top reasons cited were that they did not trust the site (29%), and they did not know how the sites worked (20%).
This trend was also observed at the individual country level.
The low trust levels towards online retails can be demonstrated by the most preferred payment options.
For respondents of our straw poll, when they shop online, 50% prefer to pay in cash upon delivery at.
Mobile money comes in a far second at 21% and debit cards a distant third at 14%.
In Kenya and Nigeria, 52% and 51% respectively, of respondents indicated they preferred cash on delivery.