E-commerce in Africa, unlocking new paths for economic growth

With e-commerce set to reach $40.49 billion in market size by 2025, Africa is redefining global digital commerce, led by a surge in mobile-first solutions, smartphone adoption, and tech-savvy consumer demand.

Africa’s e-commerce landscape is booming as we move further into 2025, propelling the continent into a new digital age. No longer confined to early adopters, online shopping and digital trade have become mainstream across Africa, opening doors to new business opportunities, innovation, and economic growth. As Africa embraces this digital frontier, it’s reshaping the future of commerce and solidifying its place as a global e-commerce powerhouse.

Market size and growth trajectory

According to data from Statista, the e-commerce market in Africa is expected to generate $40.49 billion in revenue by 2025. With an anticipated annual growth rate (CAGR 2025-2029) of 8.46%, the market is projected to reach a volume of $56.03 billion by 2029. The sector's growth trajectory has been particularly impressive in regions where traditional retail infrastructure was historically limited, effectively leapfrogging conventional retail development patterns.

Digital infrastructure: The foundation of growth

The backbone of Africa's e-commerce success story lies in its rapidly evolving digital infrastructure. Many African nations are among the fastest-growing online populations based on year-on-year user growth, with Western Sahara leading the way, experiencing an impressive 364% annual increase in online audiences. However, despite this surge in internet users, Africa still lags behind other regions in overall online adoption. Southern Africa boasts the highest internet penetration on the continent at 68%, while Middle Africa ranks last globally, with a penetration rate of just 25%. This contrast underscores both the connectivity challenges and the vast untapped digital potential that exists across Africa, according to the latest data from Statista.

When looking at Africa's most tech-savvy populations, countries such as South Africa, Kenya, Morocco, Egypt, Nigeria, Ghana, Botswana, and Seychelles stand out due to their high internet penetration and increasing digital adoption.

Abdesslam Benzitouni, VP Global Head of Public Affairs & Communications, Jumia, an African e-commerce platform offering a marketplace, logistics, and payment services, states, “The rapid increase in internet penetration and the affordability of smartphones played a crucial role in bringing millions of Africans online. This shift expanded access to digital services, including e-commerce.”

Mobile-first and payments transforming e-commerce

Mobile-first solutions today have emerged as the cornerstone of Africa's e-commerce revolution.

According to data from TechCabal Insights, Africa’s mobile-first approach is expected to account for over 60% of e-commerce transactions by 2025, with mobile phone adoption projected to reach 623 million unique subscribers by the same year.

Present market conditions are favourable, with e-commerce adoption accelerating due to the convenience it offers. However, continuous innovation and localised strategies are crucial to navigating the complexities of African markets.”
Abdesslam Benzitouni, Jumia.

This trend reflects the continent's unique technological evolution, where mobile devices serve as the primary gateway to the internet for millions of users. Another report from Statista projects that revenue from offline and online electronic payments in Africa will grow by 152% by 2025.

“The introduction of mobile payment solutions and innovative fintech platforms has bridged the gap for unbanked populations, enabling seamless online transactions and building trust in digital commerce, the launch of the JumiaPay platform has enhanced trust and accessibility in online shopping by providing secure payment solutions,” Benzitouni of Jumia adds.

Investment landscape and funding

The sector has drawn significant investment from both local and international venture capital firms. According to recent data from Tracxn, Africa's B2C e-commerce market consists of 8,500 companies, including 645 funded startups that have collectively secured $2.41 billion in venture capital and private equity. This surge in funding underscores growing investor confidence in the market's potential.

This influx of capital has allowed e-commerce platforms to scale their operations, strengthen logistics networks, and enhance customer experiences. One such example is Kapu, a Kenyan e-commerce startup focused on serving low-income consumers, which has secured pre-Series A funding from BlackWood and existing investors to support its expansion across Africa.

On how the recent funding round will be used to support Kapu's growth and development, Sam Chappatte, Founder & CEO of Kapu, says “Our goal for this phase is to break even the business in Nairobi - and prove the sustainability & scalability of our model. By getting this done, we show that we have cracked a hard nut and earned the right to scale. By scaling, we can deliver our mission — bringing down the cost of living for African consumers & saving them $1 billion.”

Kapu focuses on providing grocery shopping solutions to urban communities in Africa. A key element of Kapu’s model is the use of a network of local agents within communities. These agents play a crucial role in customer acquisition, order processing, and last-mile delivery.

“We offer a limited range of groceries that customers buy 3-4x per week. Our pricing is 10% cheaper than kiosks. Our core customers are hardworking families looking to stretch their budgets further without compromising on quality,” adds Chappatte.

E-commerce in Africa isn’t plug-and-play. There are infrastructure challenges that are regularly discussed. But we are also in the early days of widespread digital adoption. This has been the stumbling block of many to date.”
Sam Chappatte, Kapu

Challenges and opportunities

Mentioning the challenges and opportunities, Benzitouni of Jumia says, “Operating in diverse African markets presents both hurdles and prospects, as each country has unique cultural, economic, and logistical dynamics. Literacy and the adoption of e-commerce remain challenges for some communities, while infrastructure gaps, such as limited road networks and logistics facilities, make last-mile delivery complex.

Payment systems also pose a hurdle, as a large percentage of the population remains unbanked, necessitating innovative solutions like pay-on-delivery and mobile money. Additionally, internet penetration, though growing alongside smartphone adoption in some countries, remains uneven across the continent. Regulatory environments also vary, requiring a tailored approach to different tax policies and regulations.

Despite these challenges, Africa presents significant opportunities. The continent’s young, tech-savvy population is driving e-commerce adoption while increasing internet penetration and smartphone usage are expanding access to online platforms. Collaborations with local Small and Medium Enterprises (SMEs) and logistics providers are fostering a more integrated and efficient ecosystem. Furthermore, the rising middle class in many African nations is fueling demand for affordable, high-quality products, making the region a promising landscape for digital commerce growth.”

As a startup, Kapu has faced challenges in the African e-commerce market. Establishing itself in this market is particularly complex, as startups must navigate various hurdles to grow and succeed. Chappatte of Kapu says, “E-commerce in Africa isn’t plug-and-play. There are infrastructure challenges that are regularly discussed. But we are also in the early days of widespread digital adoption. This has been the stumbling block of many to date. Adapting to these realities is the opportunity. This is why we are pushing hard on ‘New Retail’ at Kapu - combining the best of online and offline to best serve our customers.”

E-commerce is a key pillar of Kuehne+Nagel’s market potential growth strategy, aligned with Roadmap 2026 and Vision 2030. As part of our expansion ambitions, we are committed to driving growth in Africa’s rapidly evolving e-commerce market.”
Tom Bronner, Kuehne+Nagel

Mentioning the opportunities Tom Bronner, Sea Logistics Sales Representative at global logistics company Kuehne+Nagel, says, “Africa’s e-commerce industry is on the brink of a major expansion. With the right government support, streamlined cross-border trade regulations, improved infrastructure, and the emergence of new local and international trading platforms, the sector is expected to experience unprecedented growth in the coming years.”

Warehousing powering e-commerce growth

The evolution of warehousing infrastructure has emerged as a critical enabler in Africa's e-commerce expansion, with sophisticated fulfilment centres reshaping the delivery landscape across the continent. Major platforms like Jumia and Takealot have invested heavily in automated warehousing systems. Last year Jumia launched a new integrated warehouse and logistics facility in Tema, Ghana. This investment strengthens Jumia’s commitment to Ghana’s e-commerce growth and aligns with its strategy to enhance operations across Africa, following similar expansions in Nigeria, Morocco, Egypt, and Côte d’Ivoire.

“Kuehne+Nagel is expanding its footprint across Africa to provide comprehensive end-to-end supply chain solutions for e-commerce customers. In South Africa, the company operates five fulfilment centres spanning over 35,000 sqm, while in Kenya, it manages close to 10,000 sqm of warehouse space to support growing logistics demands,” says Bronner of Kuehne+Nagel.

The rise of micro-fulfilment centres in urban areas also represents another significant trend, particularly in markets like Kenya and Nigeria.

Cross-border commerce and regional integration

The African Continental Free Trade Area (AfCFTA) has played a crucial role in facilitating cross-border e-commerce. The agreement has helped standardise digital trade regulations across countries, reducing barriers to online transactions and fostering a more integrated digital marketplace. This has particularly benefited small and medium-sized enterprises (SMEs) looking to expand their reach across national borders.

Chappatte of Kapu, commenting on cross-border e-commerce, says, “If we can offer better value to our customers by sourcing internationally, we will look to do it.”

Future outlook and trends

Looking ahead, artificial intelligence and machine learning are set to play increasingly important roles in personalising shopping experiences and optimising logistics. The integration of augmented reality for virtual try-ons and product visualisation is gaining traction. The rise of voice commerce, particularly in regions with lower literacy rates, presents an exciting frontier for innovation. Further, social commerce has also emerged as a game-changing force in African e-commerce. Platforms like WhatsApp Business and Instagram Shopping have become primary sales channels for millions of micro-entrepreneurs.

“In an era of black swan events, cargo visibility is more critical than ever. Kuehne+Nagel is investing heavily in digitisation and technology to eliminate information gaps across the supply chain—ensuring seamless cargo movement across all modes of transport, particularly for e-commerce customers,” says Bronner of Kuehne+Nagel.

“To enhance efficiency and ensure a compliant, high-quality, and accessible logistics network, Kuehne+Nagel has established a ‘control tower’ in Durban. This dedicated team provides full visibility and seamless coordination across the entire supply chain.”

“Jumia’s Black Friday, a promotional campaign, which has revolutionised shopping habits by offering customers amazing deals and discounts. Jumia was the first company to launch it in Africa in 2014. Our partnership with payment providers has enabled Jumia to offer more options to customers like Buy Now and Pay Later. We also plan to deepen our collaboration with SMEs and Micro, Small, and Medium Enterprises (MSMEs), and International and African brands to boost product offerings,” says Benzitouni of Jumia.

“For us, our priority is proving profitability + scalability in Nairobi. From this point, we earn the right to scale. There is no question about the size of opportunity in our space - it's massive. One of the world's largest opportunities to crack,” says Chappatte of Kapu.

As Africa's e-commerce narrative unfolds, it's becoming clear that the continent isn't just adopting global digital commerce trends; it's pioneering innovative solutions that could serve as blueprints for other emerging markets. The convergence of indigenous innovation, technological adaptation, and cultural integration is creating a uniquely African digital marketplace that extends far beyond traditional retail transformation.

The article was originally published in the February 2025 issue of The STAT Trade Times.