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African e-commerce is finally being "occupied" by the Chinese

African e-commerce is finally being "occupied" by the Chinese

News2025-07-17

The US market is difficult to operate, and Chinese cross-border sellers are once again targeting the African market.

According to the latest data from Jumia, the largest e-commerce platform in Africa, over 80% of its 12000 international sellers come from China, contributing one-third of the platform's GMV and an annual growth rate of up to 60%. To attract Chinese sellers to join, Jumia even set up a local team of 70 people in Shenzhen.

In addition to Jumia, Takealot, the largest e-commerce platform in South Africa, is also seeing an increasing number of Chinese bosses. It also began to gradually relax the restrictions. Previously, the account registration fee was raised to 30000 yuan (registration requires South African corporate companies, and the threshold for foreigners is high), but now the registration cost is almost zero through the application of agent companies.

African e-commerce is finally being "occupied" by the Chinese.
According to data, by 2022, the number of e-commerce users in Africa will increase to approximately 387 million, with a penetration rate of 32%. It is expected that by 2025, the number of e-commerce users in Africa will reach around 500 million, and the penetration rate will increase to 39.5% to 40%.

Africans who buy online have become a new hot commodity for Chinese sellers.

Low unit price products are difficult to make profits
For Chinese sellers, African e-commerce platforms such as Jumia and Takealot still have certain advantages compared to other Chinese cross-border e-commerce platforms that are deployed in Africa.

Firstly, domestic cross-border e-commerce platforms mostly offer cheap small commodities, and most of these platforms transport goods from China to Africa via air freight, which usually takes 15 to 21 days. For African consumers who value logistics efficiency, this is not very attractive.
In addition, some local policies in Africa have also brought some risks to Chinese cross-border e-commerce platforms.

For example, in the first half of 2023, the South African government announced an investigation into SHEIN to determine whether it intentionally sent small packages with a value lower than the import tariff threshold in order to evade import tariffs.

Some South African companies and industry groups have also begun lobbying the government to fill the import tax loophole for small clothing, known as the minimum rules. Under this rule, small items only need to pay a low import tax of 20%, while local clothing retailers who place bulk orders need to pay a customs duty and value-added tax of 45%.

Under the adjustment of tax policies, South African consumers often encounter the problem of charging twice the price when shopping on Chinese cross-border e-commerce platforms. For example, if they do not pay taxes and fees after the goods arrive, they cannot take them away.
For local e-commerce platforms in Africa, this policy risk is relatively small.

Compared to cross-border e-commerce, local e-commerce platforms in Africa have more logistics advantages, and these two companies also have higher requirements for their own logistics performance speed.

It is reported that Takealot has three large warehouses in South Africa, which can achieve same day or next day delivery in most areas. Under Takealot's rules, sellers are required to store their products in the platform's warehouse within three days. This means that it is almost impossible to ship domestically, and the seller must have a warehouse in South Africa to stock up.

Jumia also requires sellers to ship to their warehouses and then have the platform deliver to customers. Chinese sellers must first deliver to Jumia's own overseas warehouse and cannot directly deliver to consumers across borders.

Improving logistics fulfillment speed on the platform can optimize the experience for African consumers, but for Chinese sellers, the threshold is also increasing.

This means that the small package delivery model is basically not feasible. Chinese sellers need to have a certain amount of inventory in Africa, and for Takelot sellers, they also need to bear the cost of local warehouses in South Africa.

According to industry insiders, local warehousing costs in South Africa are relatively high. For example, the monthly rent for a 1000 square meter warehouse is about 60000 rand (about 24000 RMB), plus management fees and other miscellaneous expenses, the total monthly cost is about 80000 to 90000 rand (30000 to 35000 RMB).

The costs of logistics, stocking, and other aspects also mean that Chinese sellers find it difficult to make a profit by selling low priced light and small items on local e-commerce platforms in Africa.

On Takealot, products with costs above 200 rand (approximately 80 RMB) are more competitive on this platform. ”Industry insiders have revealed to HuXiang that most of the Chinese bosses who have fallen for Takealot are due to lower pricing.

A Chinese big seller who has already withdrawn from Jumia also stated that making products worth a few dollars at Jumia is basically due to the problem of low returns and shipping costs, which are major challenges. Products with high unit price and low return rate are what the platform encourages.

On these local e-commerce platforms in Africa, there are relatively more opportunities for 3C products such as home appliances and refurbished computers. The unit price of these products is relatively high, and they are slightly cheaper compared to offline prices in Africa. In addition, the logistics performance speed is not slow, which makes them more attractive to local African consumers.

Affected by Chinese cross-border e-commerce platforms
However, although local e-commerce platforms in Africa have certain advantages, they still face many challenges in terms of performance.
For example, Jumia is the largest e-commerce platform in Africa, covering 11 countries including Nigeria, Cote d'Ivoire, Egypt, etc. According to data, its market share once exceeded 24%. In April 2019, Jumia went public on NASDAQ, becoming the first African e-commerce company to go public in the United States. It is reported that JumiaGMV will be around $1 billion in 2024.

But since its establishment in 2012, Jumia has not achieved profitability until 2023, and has been losing money for 11 consecutive years. In the third quarter of 2024, Jumia's revenue declined by 13% year-on-year and it also decided to exit underperforming markets such as South Africa and Tunisia.

Takealot is also facing the problem of declining performance.
According to online retail research by World Wide Worx and Mastercard, although the South African online retail industry reached 55 billion rand in 2022, a year-on-year increase of 30%, Takelot's GMV growth has significantly decreased from 72% in 2021 to 15% in 2022.

In addition, Naspers stated in its 2023 annual performance that Takelot Group suffered a loss of $22 million (approximately 408 million rand) due to a slowdown in consumer demand, with GMV and revenue growth still declining compared to 2022.

Although some African countries have certain policy restrictions on Chinese cross-border e-commerce platforms, the impact brought by Chinese cross-border e-commerce platforms is still significant for local e-commerce platforms in Africa.

In 2020, SHEIN was launched in South Africa. According to the Marketing Research Foundation, a non-profit market research organization in South Africa, SHEIN is the largest retailer for online women's clothing procurement, holding 35% of the market share.

Temu, on the other hand, rapidly expanded in the African market, especially in Nigeria and South Africa, with its ultra-low prices and factory direct sales model, attracting a large number of price sensitive consumers. Takealot even sold some of its businesses to reduce competitive pressure.

What is the future of local e-commerce in Africa, and the market is also anxiously watching. How they leverage their years of accumulation and local advantages in Africa has also become a key factor for these platforms.

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African e-commerce is finally being "occupied" by the Chinese