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Mauritius, South Africa And Tunisia Are Africa’s Top Three B2C Ecommerce Markets — UNCTAD

February 24, 2021

United Nations Conference on Trade and Development

The small east African island of Mauritius is never tired of leading Africa in anything business. Despite receiving little to no attention from Africa-focused tech startup investors, the country is dominating Africa’s Business to Customer (B2C) ecommerce market, according to a recent B2C electronic commerce index released by the United Nations Conference on Trade and Development (UNCTAD). By the report, Mauritius leads the way across Africa, ranking 69th globally with a score of 58 out of 100. South Africa (73rd) is second, followed by Tunisia (77th). Algeria (80th) is in the fourth place, overtaking Ghana (81st), Libya (85th) and Kenya (88th). Nigeria (94th) shows a better capacity than Morocco (95th) and Senegal (99th).

“To facilitate more inclusive e-commerce, African countries would benefit from catching up in all policy areas. Compared with the 2019 index, there is no global change in the index value,” the report noted.

Here Is What You Need To Know

The report said in 2019, an estimated 1.5 billion people, or 27 per cent of the world’s population aged 15 years and older, shopped online. This represented a 7 per cent increase over 2018. The proportion of those shopping online is much less in countries at low levels of income, it said.

The report ranked 152 countries across four indexes, namely: 1) account ownership at a financial institution or with a mobile-money-service provider (% of population ages 15+) (Source: World Bank); 2) Individuals using the Internet (% of population) (Source: International Telecommunication Union, ITU); 3) Postal Reliability Index (Source: Universal Postal Union, UPU); 4) Secure Internet servers (per 1 million people) (Source: Netcraft retrieved from World Bank).

The report noted that all of the top ten developing economies in the 2020 index are from Asia, and all are upper middle-income or high-income economies.

The largest increases in index scores for some developing countries were mostly from Algeria, Ghana, Brazil and Lao PDR, which all saw their scores surge by at least five points largely due to significant improvements in postal reliability.

Out of the 20 economies with the lowest value in the 2020 index, 18 are least developed countries (LDCs), with Congo and Syrian Arab Republic being the only non-LDCs in this group.

Globally, landlocked Switzerland with four official languages takes the number one spot on the 2020 UNCTAD B2C e-commerce index. The confederation scores highly across all four dimensions of the index. Switzerland is closely followed by the Netherlands, Denmark, Singapore, United Kingdom, Germany, Finland, Ireland, Norway, China, and Hong Kong.

The two largest B2C e-commerce markets in the world, China and the United States, rank 55th and 12th respectively in the index. Although both countries lead in several absolute measures, they lag in relative comparisons. For instance, the report noted that internet penetration in the United States is lower than in any of the economies in the top 10, while China ranks 87th in the world on this indicator. As for online shopping penetration, the United States ranks 12th while China takes the 33rd slot.

The Top 20 In Africa:

Mauritius, 69th globally

2. South Africa, 73rd globally

3. Tunisia, 77th globally

4. Algeria, 80th globally

5. Ghana, 81st globally

6. Libya, 85th globally

7. Kenya, 88th globally

8. Nigeria, 94th globally

9. Morocco, 95th globally

10. Senegal, 99th globally

11. Namibia, 100th globally

12. Botswana, 104th globally

13. Gabon, 105th globally

14. Egypt, 109th globally

15. Tanzania, 110th globally

16. Cameroon, 111th globally

17. Uganda, 112th globally

18. Zimbabwe, 118th globally

19. Cote d’ivoire, 119th globally

20. Zambia, 120th globally

Why Switzerland Is Number One

According to the report, Switzerland is number one for the following reasons:

Most of the Swiss population uses the Internet. According to Eurostat, 97 per cent of the population used the Internet in 2019.

Switzerland has high banking coverage, ranking 11th in the world by the density of bank branches. The 2017 Findex survey found that 98 per cent of the population aged 15 and older had an account, placing it 12th in the world.

The country ranks 5th among the countries included in the index in secure server density, a proxy for online shops in the country. According to the Swiss Distance Selling Association (ASVAD), there were at least 250 web shops with online sales in the country in 2019. Linguistic affinity also means that the Swiss can easily shop from online stores available in the German, French and Italian languages.

Switzerland ranks 7th in the world in terms of postal reliability according to the UPU and number one for overall postal development. Statistics from the postal regulator indicate that 99.9 per cent of households have home delivery; 95 per cent of priority packages are delivered within one working day and 96 per cent of other packages within two days; and all of the population is within a twenty minute walk or public transport trip to a postal office. Increased online shopping due to the coronavirus broke records for parcel delivery with the Swiss Post delivering 183 million packages in 2020, up 23 per cent over the previous year.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

Mauritius Africa B2C ecommerce Mauritius Africa B2C ecommerce Mauritius Africa B2C ecommerce

These Four African Countries Control 60 per cent of Africa ’s Digital Economy, says new report.

September 12, 2019

Africa has 54 countries but only four countries dominate the digital revolution going on in the world. According to the United Nations Conference on Trade and Development (UNCTAD) Kenya, Egypt, Nigeria and South Africa are leveraging data and various platforms to collectively control the lion’s share of the continent’s digital entrepreneurship activities.

Here Is All You Need To Know

Apart from the Kenya, Egypt, Nigeria and South Africa, six second-tier countries — Ghana, Morocco, Senegal, Tunisia, Uganda and Tanzania — make up another 20 per cent, while the remaining 44 countries in Africa account for the remaining 20 per cent.
The UN agency, however, warns that the growing digital wave on the continent could be curtailed, particularly in Kenya where the Government is looking for ways to start taxing mobile applications and internet usage.

‘‘While this kind of taxation may be attractive to governments, it can be counterproductive if it results in a decline in economic activity by reducing the number of active internet users,” says the report.

UCTAD said efforts to grow tax revenues could also hurt the growth of the growing online businesses as well as suppress start-ups.

According to the report entitled Value Creation and Capture: Implications for Developing Countries, numerous developed countries are discussing or implementing interim and permanent measures to tax the digital economy.

Read Also: Tax War On Online Businesses: Nigerian and Kenyan Ecommerce Businesses To Pay VAT

These include Kenya, Uganda, Tanzania and Zambia. In Kenya, the National Treasury has proposed imposing an income tax and value-added tax on items bought on different e-commerce platforms. The proposals, contained in the Finance Bill 2019, are currently being debated in Parliament. This is also the case with Nigeria which has proposed to tax all ecommerce companies.

Commenting on the findings, UN Secretary-General António Guterres said digital advances have generated enormous wealth in record time, but that wealth has been concentrated around a small number of individuals, companies and countries.

There Is Wide Disparity In Digital Revolution Across The World

The report also noted that the world’s top digital firms are highly concentrated geographically . Among the world’s 70 highest valued digital platforms, most are based in the United States, followed by Asia (especially China). Latin American and African digital platforms are only marginal. In terms of market capitalization value, digital platform companies from the United States increased their share in the global total from 65 per cent to 70 per cent. An analysis of web traffic data confirms the dominance of the large United States digital platform companies. The report also noted that the United States hosts more than half of the top 100 websites used in 9 of the world’s 13 subregions shown in the table. Even in Western Europe, the most-used websites are based in the United States.

Challenges Confronting Emerging Economies

The report noted that the some of the problems confronting developing economies and other entrepreneurship ecosystems include the small size and scope of their markets.

It is rare for them to be able to reach international markets. In the diverse sample used in one study on Africa, 117 out of 135 enterprises (87 per cent) targeted their domestic markets. Enterprises typically focused on using digital technologies to cater to a nearby niche market, the report notes.

Indeed, few African digital enterprises reach customers beyond the boundaries of their home city. This is because they have to engage with customers directly, and also because only customers in cities have the minimum necessary infrastructural access or technological readiness to engage with a variety of digital products, the report further notes.

The report further notes that Africa still has fewer capital and other entrepreneurial resources than any other regions in the world to boost its digital economy.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.