E-COMMERCE

Proliferation of B2B platforms will boost informal retail in Africa

By our News Team | 2023

B2C e-commerce on the continent is facing headwinds. But the fast-emerging B2B digital retail platforms may have a bright future.

But for most African consumers – who are cash-strapped and have traditionally shopped in the informal retail sector at mom-and-pop stores, markets and street vendors – the many B2C e-commerce platforms have had little relevance.

For these consumers and the informal retailers who serve them, their game-changer could be the rapid proliferation of business-to-business (B2B) e-commerce apps and platforms.

Informal retailers and their customers can benefit from the new B2B e-commerce platforms. Photo by Onyinyeonuoha via Wikimedia Commons

These businesses, typically tech start-ups and often using investor capital from abroad, are revolutionising the largely inefficient supply chains that have traditionally linked FMCG manufacturers and fresh-food producers with wholesalers and informal retailers.

Depending on your viewpoint, the new B2B platforms are either complementing or competing with the old-style middleman (and his price mark-up, of course) who have been a part of the continent’s last-mile route-to-market scene for so long.

This new wave of B2B business models includes TradeDepot and Omnibiz in (both founded in Nigeria), Wasoko and Twiga (both Kenya) and Jabu (Namibia).

B2B platforms digitise the distribution layer

“B2B e-commerce companies seek to digitise the distribution layer of the fast-moving consumer goods business, which makes up the bulk of items bought in street shops. They also provide credit to keep their retail partners’ stock high,” explains TechCabal, the Nigerian-based tech news website.

Essentially, the B2B operators use smartphones and simple digital front-end technology, backed by sophisticated back-end tech, to enable micro-retailers to easily place their orders for FMCG products and possibly fresh produce too. This can be done via dedicated apps or WhatsApp.

Street-level retailers use these B2B operators to manage inventory, keep up to date with product availability and market prices, and to obtain credit. The latter moves the process a long way forward from a common ‘old style’ scenario where a middleman delivers a small order to a vendor in the morning, allows time for the vendor to sell the stock, then returns in the evening for his money. The whole process is repeated the following day.

You can read more about Africa’s rapidly evolving B2B and B2C e-commerce marketplaces in the latest issue (Issue 2 2023) of Strategic Marketing for Africa, the magazine of the African Marketing Confederation (AMC). You can access the Digital Edition here.

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