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Click-and-collect company Pargo is exploring an expansion into the rest of Africa, CEO and co-founder Lars Veul said in an interview, betting on e-commerce growth on the continent.
Africa is forecast to surpass 500-million e-commerce users by 2025, having shown a steady 17% compound annual growth rate of online consumers in the market, according to the International Trade Administration, a US government agency.
This growth is driven by increasing internet penetration, smartphone adoption and the growing use of digital financial services, especially mobile money.
“We’re looking at an expansion strategy to move into multiple markets. We’re already operational in Egypt as a second country, but we are quite seriously looking at, in the future, building a network across Africa,” Lars Veul said.
He said the options would span the main economies in Africa.
“We don’t know exactly yet. So, it’s more about the countries where e-commerce is booming or expected to boom.”
The expansion will also be driven by following its existing clients into countries where they operate outside of SA, Veul added.
Veul, a Dutch citizen who moved to Cape Town in 2012 from Amsterdam to help set up online marketplace Groupon in SA, said he cofounded the company in 2015 after realising last-mile delivery was a serious challenge for e-commerce businesses on the continent.
The firm has more than 4,000 pickup points located at retail stores across SA, including township “spaza” shops, which are informal stores that dot township corners.
Pargo has partnered with major listed telecoms, banks and retailers including US e-commerce giant Amazon, which was launched in SA in May. Amazon’s customers order online and then collect their parcels at Pargo’s pickup points.
Click-and-collect allows shoppers to avoid delivery costs and the agony of waiting for the delivery. It also lowers costs for last-mile delivery companies, who grapple with fuel expenses, product returns and difficulty in delivering to townships and rural areas.
Reuters
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