E-commerce enhances business ties with Africa

Market projected to reach $29b by 2022 as cellphones gain popularity

From solar powered street lights, mobile phones, headphones, digital gadgets to clothes, bedding and cosmetics, more and more Chinese goods can be spotted in African households as the continent has opened up a major market for Chinese e-commerce merchants.

Online shopping channels like Alibaba, JD or Amazon are not strange to most Chinese. However, in Africa, where the internet is only familiar to about one third of the population, according to Emergent Payments, an online payment service data provider, the concept is relatively new.

For ambitious Chinese e-commerce merchants, it means there is hidden gold in Africa.

According to Statista, a research firm, in 2017, the e-commerce market in Africa was worth $16.5 billion, and is projected to reach $29 billion by 2022 as mobile phones are gaining popularity. Research consultancy McKinsey predicted that by 2025, half of the African population will have access to the internet, bringing online revenue to over $75 billion.

"With the population growing, Africa will emerge as a huge market for e-commerce," said Elia Kaiyamo, the Namibian ambassador to China. E-commerce is a new thing for Namibia, and the country will welcome more e-commerce companies to Namibia, he said.

Many Chinese goods have won favor from African consumers in recent years through online channels. For example, Liang Dengqin, founder of a solar-power street lights company Ruifeng in Jiangsu, has sold his products in dozens of African countries since he started to sell on Alibaba in 2014.

"In the next decade, the overseas market for solar panel street lights will keep growing, especially in the economies involved in the Belt and Road Initiative," said Liang. He said his street lights have been shipped to over 90 percent of African countries, and half of the company's international orders came from Africa.

In Accra, the capital of Ghana, Liang sold 10,000 energy-saving solar panel lights in 2015.

Despite its large potential, there are also problems to solve before the Chinese e-commerce merchants can be confident to venture into African countries, for example, logistics, customs clearance and language barriers.

Recently, CA-B2B, an online service platform for business-to-business e-commerce, was launched in Beijing. It seeks to help Chinese enterprises and companies sell their products online.

"The platform offers a number of services, such as legal consulting, contract making, logistics, insurance, payment, customs clearance and foreign exchange settlement," said Hou Zhigang, president of CA-B2B. "It will help clients from both sides save a lot of time."

"Traditional international trade lacks efficiency nowadays," Hou said, as he believed moving things online and conducting e-commerce will largely solve the existing problems in the traditional trade mode, such as complicated procedures, higher costs, more time and even bribery.

After its launch in June, 1.39 million enterprises and companies of different sizes have registered on CA-B2B, offering a wide range of products from daily necessities, cosmetics, oil and gas, communication equipment to vehicles.

Chen Peng, vice-president of China Society for World Trade Organization Studies, said the platform will help bridge China and Africa and play an important role in developing e-commerce in Africa.

The China Customs Brokers Association said it is also working on how to make customs declarations easier with the help of digital tools in order to facilitate online business with Africa.