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(Ecofin Agency) – The key trends shaping Africa’s commerce sector in the coming years include the rise of the mobile economy, the rapid growth of embedded finance, the widespread use of super apps, and the implementation of the AfCFTA protocol on e-commerce.
The size of Africa’s e-commerce market is forecasted to double over the next five years, reaching $113 billion by 2029, according to an October 10 report by TechCabal Insights. This marks a sharp increase of 105% from the current $55 billion.
The “Future of Commerce: Outlook for 2025,” report indicates that from 2020 to 2024, the e-commerce sector has seen a compound annual growth rate (CAGR) of 14.48%. For 2025-2029, the rate is expected to average around 11.9%.
The average revenue per user (ARPU) for e-commerce players in Africa is projected to increase to $390.58 per online shopper by 2027, up from $362.10 in 2024. However, it is anticipated to drop slightly to $367.55 in 2029 due to factors such as a market correction after the surge during the COVID-19 pandemic, currency devaluations in various African nations, low per capita income, and heightened competition within the sector.
The report also discusses how the entry of American retail giant Amazon into the South African market is likely to drive greater adoption of online shopping. Amazon’s presence is expected to enhance competition by offering consumers lower prices. Furthermore, the recent merger of the Kenyan startup Wasoko with the Egyptian company MaxAB has created a leading B2B e-commerce platform in Africa. This merger is anticipated to lower costs and improve access to essential goods across the continent. Egyptian e-commerce platforms like Halan and Talabat are also expanding their services into adjacent sectors such as digital finance and logistics.
According to the report, the number of e-commerce users, or online shoppers, is expected to reach 518 million by 2025. Key markets, including Nigeria, Kenya, South Africa, and Egypt, are identified as the main drivers of growth in the sector. Local startups that are quick to adapt and the influx of strong international players are expected to further boost the market.
The Key factors that will fuel the African e-commerce sector include a high population growth rate of 2.2% annually until 2050, a youthful demographic, and increasing urbanization, which reached 45% across the continent in 2023.
The report also identifies the key trends that will shape the future of commerce in Africa. The rise of the mobile economy is one such trend, with projections that 60% of transactions will be conducted via mobile devices by 2025. During that same year, the number of unique mobile subscribers in Africa is expected to hit 623 million.
In terms of payment systems, the market is anticipated to be boosted by the rise of embedded finance—financial services that are integrated directly into user experiences. Deloitte predicts that this segment will account for over $230 billion in transaction value in Africa by 2027.
Super apps, which are mobile or web applications providing multiple services, including payment and messaging, are projected to represent 25% of total digital transactions in Africa by 2028.
Finally, the report notes that the adoption of the AfCFTA e-commerce protocol in August will create new growth opportunities for market players. This protocol aims to harmonize regulatory frameworks for e-commerce across the continent, establishing a unified market for digital goods and services.
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