Ease of setting up online business – Ghana ranks 5th on the Continent

Ghana has been ranked as the fifth country on the Continent to have put in place systems to ensure the ease of entrepreneurs setting up an online business – particularly an e-commerce business.

This is per data contained in the United Nations Conference on Trade and Development (UNCTAD) Business-to-Consumer E-commerce Index report for 2020.

Ghana, per the report, gained a score of 51.9 points.

The index scores 152 nations on their readiness for online shopping, worth an estimated $4.4 trillion globally in 2018, up 7% from the previous year.

Countries are scored on access to secure internet servers, reliability of postal services and infrastructure, and the portion of their population that uses the internet and has an account with a financial institution or mobile money services provider.

Based on the survey, Mauritius retained the highest score in sub-Saharan Africa. In contrast, the four largest increases in index scores were recorded in developing countries – Algeria, Brazil, Ghana and Lao People’s Democratic Republic.

Their scores surged by at least five points, largely due to significant improvements in postal reliability.

E-commerce in Ghana has experienced astronomical growth as purchases of goods online by Ghanaians as at February 2022, Kepios – a global strategic marketing consultancy firm – says has reached $3.98bn.

The reported figure by Kepios marks a year-on-year increase of $954m in the purchase of goods online by consumers.

In its report, Kepios asserts that the average annual revenue for e-commerce sites from consumer goods purchased online is $511, also marking a year-on-year increase of $55.

The recorded increment in the total annual amount used in the purchase of consumer goods online can be attributed to the additional 1.2m consumers who now purchase goods online.

With the addition of the 1.2m consumers, the total number of Ghanaians making consumer goods purchases online now stand at 7.78m people.

Giving a breakdown of the consumer goods purchases made, Kepios in its report noted  electronic gadgets accounted for $1.36bn of the total amount, making it the most purchased online consumer good.

Following the purchase of electronic gadgets was fashion (clothes) with a total amount of $1.22bn.

Furniture, toys, personal and household care, food, beverages and physical media accounted for $163m, $336m, $489m, $316m, $64.5m and $28.2m respectively.

On a weekly basis, the report posits that 28.2% of the total 7.78m consumers purchase a product or service online.

Groceries ordered via online was made by 11.8% of consumers, with 10.2% of consumers purchasing a second-hand item.

Still on a weekly basis, 8.9% of the total 7.78m consumers used a buy now and pay later service.

Kepios is a strategy consultancy that helps organisations all over the world make sense of people evolving digital behaviour and understand what these changes mean for ongoing success.

E-commerce in Sub-Saharan Africa witnessed immense growth in 2021. There was a 55% increase in online retail spending, even as the volume of downloads and installation of e-commerce apps on Android and iOS also grew, at 55% and 32%, respectively.

These are some very positive indicators for Africa’s rather nascent e-commerce ecosystem. Also fascinating is the fact that the growth trajectory is expected to continue, due to the following factors, as highlighted by Statista:

• Africa’s tech-savvy young population

• Africa’s rapidly growing internet penetration and

• The availability of widespread digital payment startups enabling e-commerce on the continent.