How viable is e-commerce in Uganda
The Minister for ICT and National Guidance, Dr Chris Baryomunsi, gives a speech during an event about Uganda’s Digital Transformation Roadmap on August 16, 2023. PHOTO/ MoICT
What you need to know:
This growth is attributed to an increase in e-commerce user penetration, which is expected to reach 29.1 percent by 2025
In recent years, Uganda has seen rapid growth in e-commerce trade, especially during the COVID-19 outbreak.
A report by the Uganda National E-commerce Strategy under the Ministry of ICT indicates that e-commerce will grow at a 17.1 percent annual rate between 2020 and 2025.
This growth is attributed to an increase in e-commerce user penetration, which is expected to reach 29.1 percent by 2025.
“Uganda’s e-commerce revenue is expected to reach $220 million in 2021, with an estimated annual growth rate of 17.6 percent, resulting in a projected market value of $421 million, and user penetration is expected to reach 29.1 percent by 2025,” the report read in part.
Data from Statista revealed that the market is set to grow by over 15 million users by 2025.
It further shows that transaction value in the Digital Commerce market is projected to reach US$0.93bn in 2024 showing an annual growth rate (CAGR 2024-2028) of 8.10% resulting in a projected total amount of US$1.27bn by 2028.
The number of users in the digital market is expected to amount to 2.39m users by 2028.
The average transaction value per user in the Digital Commerce market is expected to amount to US$0.59k in 2024.
From a global comparison perspective, it is shown that the highest transaction value is reached in the United States (US$2,255.00bn in 2024).
The Country Head of Sales at Abanista Uganda, Lawrence Ssekandi, is convinced that Ugandan consumers deserve access to high-quality products.
Since inception he said, they have witnessed significant growth in e-commerce adoption, one driven by increased internet penetration and changing consumer preferences towards online shopping.
“Our success stems from a customer-centric approach, innovative marketing strategies, and partnerships with local suppliers,” he said.
He added, “We've localized our services by offering a diverse product range that caters to Ugandan preferences.”
To ensure inclusion for even the illiterate, Mr Ssekandi said they have audio guides and personalised assistance through customer service channels.
However, it is not all a bed of roses. Some of the challenges of running such a business include among others infrastructure limitations, payment systems reliability, and internet accessibility.
