E-commerce is growing in Africa and could be the key to job creation in Africa. According to a report by Boston Consulting Group (BCG), Online marketplaces establishing themselves across Africa, could create around 3 million new jobs by 2025.
In their report, How Online Marketplaces Can Power Employment in Africa, BCG argues that Africans should shift focus to the economic potential of online marketplaces. They argue, “By our analysis, online marketplaces could create around 3 million new jobs, ranging from delivery drivers to retail and hospitality workers, across the continent by 2025. These businesses could also boost African economies by expanding the supply of goods and services, making assets more productive, and unlocking new demand in remote locations, which will boost consumer spending.”
BCG argues that Africa still has enormous untapped market potential, and an underdeveloped retail sector. Furthermore, the region’s geography, sparse transportation infrastructure, and thin capital markets inhibit rapid expansion of brick-and-mortar retail. Thus, e-commerce becomes a great approach to economic opportunity and job creation.
BCG uses the examples of Jumia and Takealot. Jumia is the largest e-commerce operator in Africa and has recently become the first-ever Africa-focused technology company to list on the world’s largest stock exchange, the New York Stock Exchange. These two companies have become household names in their home countries and have created countless job opportunities.
How Online Marketplaces can achieve their full potential:
But how can this be done? BCG argues, “To ensure that online marketplaces achieve their full potential, governments need to create a healthy environment in which these businesses can not only thrive but also deliver inclusive economic growth in underserved regions and advance national development goals. We suggest a three-pronged approach that fosters a mutual understanding of both the opportunities and concerns of the public and private sectors, involves sharing of resources, and builds the right technological infrastructure and governance systems.”
“Online marketplaces are a good illustration of how the digital revolution can create economic opportunity and improve social welfare in Africa,” says Jan Gildemeister, BCG partner and managing director based in Johannesburg.
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