Botswana’s e-commerce sector is facing significant setbacks, with challenges in logistics and payment systems curtailing growth. Since 2023, at least five startups in the sector have closed, citing the inability to address key operational hurdles. Artify Botswana, an online marketplace for visual art, was one of these casualties, primarily due to buyers completing transactions offline despite efforts to enhance trust through verified seller features and secure payment systems.
The platform’s reliance on a commission model meant significant revenue was lost.E-commerce in Botswana generates over 89% of digital revenues, but penetration remains low at just 5%, compared to South Africa’s 49%, according to the UN Trade and Development statistics. This limited adoption, combined with the logistical challenges posed by Botswana’s small population spread across a large geographic area, creates high operational costs for startups.
For instance, Vaisa, another now-defunct e-commerce venture, found last-mile delivery to be prohibitively expensive without an in-house fleet.The government has made efforts to support the sector, including launching a National E-Commerce Strategy in 2021 and the BW Reka marketplace, but both initiatives have struggled to deliver tangible results. BW Reka is no longer operational, highlighting the need for more effective policies and infrastructure investment.
To address these issues, industry experts suggest that Botswana develop comprehensive warehousing, distribution, and last-mile delivery systems to lower costs and improve service quality.
Furthermore, introducing open-banking-style regulations could ease the process for e-commerce startups to create solutions tailored to the local market. Steps like establishing a national payments switch and streamlining customs procedures are crucial for the sector’s revival.
Collaboration among startups, local courier companies, and the government could also play a critical role in overcoming these challenges. With a population of just 2.4 million, consolidated efforts are essential to create scalable and sustainable solutions for Botswana’s e-commerce landscape.
