E-tailers help African businesses

Chinese e-commerce platforms are investing more resources to expand their presence in Africa, helping local farmers sell their specialties, providing related cross-border e-commerce training courses and facilitating the digital transformation of local enterprises, as part of a broader push to bolster Sino-African economic and trade cooperation.

Tech heavyweight Alibaba Group Holding Ltd has been offering a range of specialized training programs for African entrepreneurs, including teaching them how to run online stores and sell distinctive agricultural products. Such training complements support in local smart logistics and fulfillment services, so as to promote the development of the digital economy in African countries.

Alibaba has worked with the Rwanda Development Board since 2018 to help Rwandan small and medium-sized enterprises sell their products, including coffee and handicrafts, to Chinese consumers through Alibaba's online marketplaces.

Rwanda was the first African country to join the eWTP — electronic World Trade Platform — an Alibaba-led initiative that aims to lower barriers to global trade for SMEs via e-commerce.

Alibaba.com, Alibaba's online business-to-business marketplace for global wholesalers, signed a new e-commerce cooperation agreement with local authorities in Rwanda last year, allowing an initial group of 20 Rwandan SMEs to sell their products through Alibaba.com as a way to start their digitalized operations.

The company has provided comprehensive e-commerce operational guidance and a full range of support services for the Rwandan SMEs, such as web design, training and counseling, to help them establish online stores, select suitable products and optimize store operations. So far, more than 250 African companies have registered with Alibaba.com.

Zhang Zhouping, a senior analyst of business-to-business and cross-border activities at the Internet Economy Institute, a domestic consultancy, said unlike Europe and the United States, where penetration rates of online shopping are relatively high, Africa has enormous growth potential in the cross-border e-commerce sector.

Zhang underscored that digital trade is expected to play a bigger role in promoting economic and trade cooperation between China and Africa, and empower the development of the real economy in Africa.

"As a new form of foreign trade, cross-border e-commerce witnessed rapid growth during the COVID-19 pandemic and became a new engine of the country's foreign trade development," Zhang said, adding that it is playing a vital role in helping micro, small and medium-sized enterprises to build new brands and open up more overseas markets.

Industry insiders said the proliferation of smartphones and mobile devices has contributed to increasing internet penetration in Africa, which led to the robust growth of the e-commerce sector across the continent.

The overall revenue of the e-commerce market in Africa is expected to reach $59.18 billion in 2027, up from $32.49 billion in 2022, according to TechCabal Insights, an Africa-focused digital economy consultancy.

To satisfy Chinese consumers' rising demand for high-quality specialties made in Africa, Chinese e-commerce giant JD has opened online national pavilions covering a broad range of commodities from African countries such as South Africa, Tanzania, Ethiopia and Mali.

The company said African agricultural products like wine, coffee and tea are gaining popularity among Chinese consumers, while some local skincare products, such as shea butter produced in Mali, are also favored by shoppers.

In addition, JD, in collaboration with Spier, one of South Africa's oldest and most esteemed vineyards, unveiled their exclusive wine series to the Chinese market last September. The partnership would enable more Chinese consumers to buy South African wines via direct overseas procurement model.

China's cross-border e-commerce industry has seen robust growth in recent years, with the sector's import and export scale reaching 1.22 trillion yuan ($171 billion) in the first half of this year, up 10.5 percent year-on-year, the General Administration of Customs said.

Online discounter PDD Holdings, parent company of Chinese e-commerce platform Pinduoduo, launched its cross-border e-commerce platform Temu in South Africa in January. It is the 49th country that Temu has entered since its launch in September 2022 in the United States.

According to global research firm Statista, the number of registered e-commerce users in South Africa stood at about 27 million in 2022, and the figure is expected to rise to 33.4 million by 2025, with an e-commerce penetration rate of 53.1 percent, making it the largest e-commerce market in Africa.

Temu has gained popularity among worldwide consumers there as it offers a wide array of merchandise, including apparel, consumer electronics, jewelry, shoes, bags, cosmetics, baby products and pet supplies at competitive prices.

Chen Lei, chairman and co-CEO of PDD, said they hope to leverage the supply chain capacities it has accumulated over the past years to create a new channel that enables consumers from different countries and regions to directly purchase products from factories, providing more flexible and personalized supply chains and more cost-effective shopping experiences.

"Chinese online retailers who are making inroads into overseas e-commerce markets should learn about the preferences of local consumers, comply with local laws, regulations and quality standards, step up localization efforts and seek development strategies to differentiate themselves from competitors," said Chen Tao, an analyst at internet consultancy Analysys in Beijing.