In June 2024, I was invited to share my perspectives on the opportunities I see for online marketplaces in bolstering economic opportunities for African entrepreneurs and smallholders. This comes against the backdrop of increased proliferation of these platforms, which Africa’s young populations can leverage to their advantages. The rise in agrifood marketplaces have drastically changed online business models, fostered and spurred innovation across the continent. During the covid19 pandemic, many businesses were forced to go online, and many entrepreneurs saw the shift as an opportunity to introduce many other innovative online models that today are increasing sales and boosting investments within the continent.
Online agrifood marketplaces are online platforms, where many third-party sellers, producers, traders and consumers can sell their products and services to consumers. Customers connect on these platforms to buy and sell their products. There are many models, but I would like to emphasize the market model type. This model involves setting up a platform – a digital platform which acts as a central node or facilitator between buyers and sellers.
There are several opportunities I see with online agrifood marketplaces. First of all, the African digital ecosystem has been accelerating with increased investments and startups. In Africa, the potential to innovate is very high. Moreover, the digital adoption rate continues to grow across the continent. For instance, we see increased mobile subscription, internet penetration rates, and increased social media usage across the continent.
The market demand for agrifoods keeps increasing, which means agrifood marketplaces become handy for many clienteles and African entrepreneurs. Generally, the market business platforms are increasing in many countries of the continent. In Uganda for instance, there is Duka Uganda – an online shopping platform that provides an easy way for vendors to create and manage their online stores and buyers to browse and purchase products. There is Suubula – which serves as a business-to-business marketplace connecting manufacturers, agents, and distributors with medium and small sized businesses looking to purchase products in wholesale, Jiji Uganda – a platform that allows users to buy and sell items for free. And there are other inventory models in Uganda such as Kikuubo online and Jumia that are offering great services online. These platforms increase the customer base of African entrepreneurs.
The increased digitisation in the African continent with many business-to-business platforms and emergence of new media offers a low barrier to entry in business. For instance, African entrepreneurs in peri-urban areas use Whatsapp statuses to market their products and attract sales. Digital marketing via social media has increased these opportunities for African entrepreneurs.
However, there are several challenges
First, there is a high cost of the internet in many African countries. In Uganda, to purchase 1gb of internet data will cost more than 10% of a person’s monthly average income. Facebook continues to be shut down in Uganda, and this reduces sales and digital marketing on these platforms. For instance, by 2023, Uganda saw a decline in Facebook usage by over 650,000 users due to blockage of the platform
Digital skills are lacking for African entrepreneurs, and where there is digital skills training, its often-targeting high end audiences, done in urban areas – leaving many people digitally excluded. The African digital ecosystem is not benefiting everyone, there are gender digital divides and inequality in skills, women struggle to raise capital than men for their business. And entrepreneurs need both the hard and soft skills to succeed in their entrepreneurial journey
Article by Moses Owiny – Founder at Centre for Multilateral Affairs
