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Ecommerce in Africa struggles for funding, trust, logistics

Thursday 7 December 2017 | 12:52 PM CET

More than 70% of ecommerce startups in Africa are not profitable and are struggling with lack of funding, shortage of trust and logistical difficulties.

These are the latest findings from Afri-Shopping: Exploring the African E-commerce Startup Ecosystem Report 2017 released by Disrupt Africa.

The report finds that the African ecommerce space is growing at an exceptional pace, with the number of startups entering the market growing year-on-year to reach a total of 264 ventures operating continent-wide.

Yet fewer than 30% of startups surveyed in the researching of the report said they were profitable, while funding for ecommerce startups has also proven inconsistent as investors are scared off by the long wait for returns.

Funding for ecommerce startups declined sharply in 2016, and though there are signs investor interest is picking up again in 2017, the funding available is not well distributed, with 90% of funds raised going to startups in just five countries.

Nigeria emerges as leader for ecommerce on the continent, with 40% of Africa’s ecommerce ventures located in the country. South Africa – whose startups compete with their Nigerian rivals for fundraising capabilities – and Kenya also have developed ecommerce markets. The report also tracks ecommerce activity in another 19 African markets.

The report analyses 12 key sub-sectors of the ecommerce space across a variety of African tech ecosystems, as well as funding trends, and includes results of a survey of African ecommerce startups. The full list of 264 African ecommerce startups is also being made available.

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