As Africa undergoes a digital transformation, the use of social commerce is on the rise. We explore how the phenomenon is changing the meaning of marketing and trade.
The realm of digital transformation across Africa is decidedly on the rise, thanks to the advancements in the telecommunications industry and surrounding infrastructure. Such achievements were most recently celebrated at the first Gitex Africa Summit, where over 900 companies from across Africa met in Morocco to discuss the changing landscape of the digital economy.
Shoulder to shoulder with topics such as artificial intelligence (AI) and cloud technology, the rise of social commerce generated much discussion as the latest innovation in marketing and trading commodities.
THE WORLDWIDE WEB OF TRADE
As a sub-sector of e-commerce, the notion of social commerce relies on the trading and selling of goods via social media platforms. This marks a turning point in the meaning of trade as it centres more on the customer experience and the personalisation of each consumer, hence the greater need for analysis of consumer behaviours, social media habits and the rise of influencers on such platforms.
Social commerce is pointedly taking the continent by storm, as according to a 2022 survey, the industry in Africa and the Middle East had an estimated value of USD$8.9 billion. This is indicative of the mass use of social media, as more companies across Africa utilise these platforms for selling. More specifically, 92 percent of small and medium-sized enterprises (SMEs) in Kenya used social commerce as of June 2020, demonstrating a major increase from previous years.
But why is this? One contributing factor is that many businesses are departing from more conventional methods of advertising, which have become outdated in comparison to the greater accessibility afforded by social media. From a business perspective, the use of social media requires less time, money and effort — a golden trifecta for effective marketing.
Furthermore, the use of social media platforms allows for greater capabilities, such as target driven algorithms, content sharing and messaging services, that increase the personalisation of the buying and selling process and provide instant access to different services and products.
In Africa, now more than ever, it is the optimum time to utilise the opportunities afforded by social media, as there has been proactive growth in internet connectivity and the use of 5G networks. Thus, tapping into a market in which 34 percent of Africans are using social media seems like a natural and obvious step forward for commerce.
TIKTOK FOR E-COMMERCE
A survey by ReferralCandy shows that word-of-mouth is the most trusted form of marketing among consumers. The need for the opinions of other users is so high that nearly nine out of 10 consumers (89 percent) read reviews before buying products online. Consequently, many start-ups across Africa are reaching much wider audiences through the use of Facebook, Instagram, Twitter, and TikTok.
One such company utilising the influence of others is the Nigerian start-up, Chooya, which was founded in 2019 and has digitised word-of-mouth marketing. Chooya, which translates as ‘to find something’, brands itself as ‘the TikTok for e-commerce’. By leveraging social media to make it easier for consumers to find traditional African markets via mobile connectivity, companies such as Chooya position themselves at the cutting edge of the region’s digital economy.
ULTIMATE CONVENIENCE SHOPPING
Significantly, it is not just high-fashion brands and trend commodities that are yielding social commerce opportunities. In Nairobi, social commerce start-up, Tushop is
tackling the cost of living crisis across Africa. Created in 2021, Tushop is lowering the price of everyday commodities for its customers by allowing people in the local community to buy essential goods from local traders and assisting in last mile delivery.
The founder of Tushop, Cathy Chepkemboi, was a previous employee of commodity titan Unilever. Upon the launch of Tushop, the company gained substantial investment, which helped jumpstart community buying and give it the ability to make the platform as easy to use as possible.
Tushop provides vital commodity infrastructure by collaborating with traders in the local community, known as community leaders, to offer the highest-quality service. Each community leader has a virtual shop where neighbours can order their products. Thus, Tushop aggregates for bulk orders to manufacturers or farmers.
As a result, shoppers can earn up to 60 percent in savings; with the retailer being in direct contact with the customer, costs are lowered overall. Consequently, ‘everyone is able to elevate their livelihoods across the country and the continent.’
The realm of social commerce is still in its infancy. Therefore, there are many challenges emerging from its use that still need to be overcome. Namely, organising informal African retail is proving to be an expensive challenge that requires serious effort. Furthermore, a significant proportion of the African population reside in more rural areas.
However, with recent telecommunications developments, the future of social commerce is looking bright, with a projected growth of 55.2 percent between 2022 and 2028 across Africa and the Middle East. Therefore, the boundaries of buying and selling could be in for sizeable transformation as more of Africa takes to social media to not only like and share, but buy and sell.
