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  • Writer's pictureJeremy Conradie.

Last-mile Delivery is A Massive Opportunity in Africa

Updated: Jul 6, 2023

In this article by Frost & Sullivan’s Consultant, Nomvo Kasolo, she states and we agree, that the African last-mile delivery market is a massive opportunity.

As she states, African cities are seeing extraordinary growth, with over 60% of Africans expected to live in cities by 2030. With this comes higher demands for efficient supply chains for growing urban areas and the remaining rural space to avoid expansion of the rural-urban divide. 2020 highlighted the extent of this crack in many local supply chains but also accelerated e-commerce growth in Africa. Now two years down the line, there are lessons learned and several opportunities signaled by the rise in transport start-ups. In 2021 alone, 21 transport start-ups were established in Africa, addressing digitisation, last-mile delivery solutions, increasing safety, etc.

Digital communication platforms that allow for easy returns, exchanges, and increased connectedness between client and vendor are also gaining ground, with highlights seen in Figure 1, including the likes of Kobo360, WumDrop, and Pargo, etc. But Nucleus notes here that the need for a delivery network for all of these is no less important than for more traditional supply chain and logistics opportunities. They add a piece to the puzzle and another suite of services to our 4PL network.

Regional expansions of newer entrants and established players are happening in Egypt, South Africa, Nigeria, Ivory Coast, Tunisia, Ghana, Ethiopia, Zambia, Kenya, and other markets. With most of the regions, the growth needs to be met by additional investments in key infrastructure (physical and digital) to ensure long-term solutions.

She also says that the high-potential areas by segments in the next decade are expected to be through growth in B2C models (by product type), e-commerce (industry), the distributor segment (by sales channel), and parcel services (by delivery type). In South Africa alone, the projected revenue generated by eCommerce is USD 7.07 Bn for 2022, with expansion to USD 14.90 Bn by 2027 (at a CAGR of 16.09% between 2022-2027). User penetration is expected to rise from 45.1% in 2022 to 58.1% by 2027.

Source: Techtrends

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