During an April 16 discussion, the focus was on the growing e-commerce scene in Africa, which has gained significant traction, especially due to the Covid-19 pandemic. With lockdowns and social distancing becoming the new norm, online shopping surged in popularity, and for many, including myself, it was a first-time experience—ordering groceries online, a shift from the traditional view of e-commerce being only for big-ticket purchases.
Angela Nzioki, CEO of Sokowatch Kenya, shared insights about the rise of e-commerce in Africa. Sokowatch is a platform that enables informal retailers to place orders via SMS or mobile apps and receive same-day deliveries to their stores. The company’s unique approach focuses on small, informal shops, which constitute a significant portion of Sub-Saharan Africa’s economy.
Daniel Yu, Sokowatch’s Group CEO, explained that targeting small shops is a strategic move, allowing the company to tap into the same business opportunities as serving individual customers but with fewer complexities. Despite ongoing discussions about formalizing this sector, there’s still a significant lack of data on the informal economy compared to countries like China.
Angela, who participated in Jack Ma’s e-founders program in China, highlighted the exponential growth of e-commerce there. She noted that platforms like Alibaba achieved $74.1 billion in sales on “Singles Day,” dwarfing Africa’s total retail revenue of $10.3 billion in 2020. This experience inspired Angela to join Sokowatch, believing Africa is still in the early stages of e-commerce development.
While acknowledging that Africa’s retail sector represents just 1% of global sales compared to 13-14% in the U.S., Angela remains optimistic about the continent’s immense potential for e-commerce growth. However, she pointed out that the immediate needs of African consumers—such as late-night purchases of food or water—are often better served by local stores than online platforms.
The pandemic presented significant challenges to informal retailers, but Sokowatch played a critical role in integrating them into the e-commerce ecosystem. Recognized as one of the most innovative startups by Fast Company, Sokowatch supports informal retailers by offering same-day delivery of stock at competitive prices, reducing their reliance on wholesalers.
Angela also discussed the issue of a fragmented supply chain, which Sokowatch aims to streamline. Furthermore, she emphasized the importance of addressing financial illiteracy among informal retailers, many of whom use credit for daily expenses rather than business investments. Sokowatch not only provides financial services but also educates retailers to prevent cycles of constant borrowing.
Although formalizing the informal retail sector is a long-term challenge, Angela is optimistic about the future. The process involves navigating complex relationships with multiple supply chain players, but with the right resources and partnerships, Sokowatch is making strides in improving access to retail services across Africa’s informal economy.