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Summary

E-commerce is growing strongly in Cote d’Ivoire, but many in the local market see e-commerce as a computer-based activity that is out of the reach of the mass market. However, the increasing availability of mobile broadband networks and affordable smartphones indicates that the future of e-commerce in the country will be mobile.

Mobile should be at the center of Ivorian online strategies

The main theme of the recent Africa Telecom People conference, which was held in Abidjan, was e-commerce, and much of the debate at the event focused on topics such as improving access to computers and bank cards, as well as online security.

These issues are of course all highly relevant to e-commerce, but the emphasis on computer-based access seemed at odds with the fact that mobile networks and services dominate the Ivorian telecoms market, and mobile should be the key focus for any e-commerce stakeholder in Cote d’Ivoire.

With mobile network signals reaching over 90% of the Ivorian population, including 3G (and soon 4G) covering major urban centers. The Ivorian mobile subscription base grew by 16% year-on-year to reach 25 million over the 12 months to September 2015, according to research by Ovum. 3G subscriptions increased by 67% to 7.4 million during the same period. In comparison, overall mobile subscriptions across Africa increased by 10% and 3G usage by 56%.

Data usage over 3G is now a key driver of the market but the faster LTE is set to boost e-commerce uptake even further in urban areas. Launched mid-2014 by ISP YooMee, LTE is set to quickly take over the fixed broadband market, which in 3Q15 consisted of over 100,000 users. The number of ADSL users increased by just 2% year-on-year to 3Q15 while WiMAX usage declined by 7% over the same period. However, further LTE launches are largely dependent on licenses and spectrum auctions that are yet to be scheduled.

In the meantime, mobile market leader Orange started trialing LTE1800 in capital city Abidjan in 2Q14. Its closest rival MTN could also refarm that same spectrum band as well as the 3.5GHz band, which it currently uses for its WiMAX network. Ovum forecasts that the total number of 3G users will exceed 29 million in Cote d’Ivoire in 2020, representing 89% of the mobile connections.

The strong growth in the take-up of smartphones in Cote d’Ivoire will also help to drive up the use of e-commerce over mobile. Pan-African e-commerce platform Jumia, which has 500,000 monthly unique users in Cote d’Ivoire, said that desktop access is still predominant, accounting for 87% of its visitors in the country as opposed to 13% via smartphones. But Jumia also said that smartphones accounted for 27% of the items that it sold in Cote d’Ivoire over the year to the end of April 2015: Ovum forecasts that the number of smartphone users in Cote d’Ivoire will rise from 9 million at the end of 2015 to 24 million in 2020.

Cote d’Ivoire’s low banking penetration rate has been seen as a challenge to e-commerce too. In 2014, the Ivorian Government estimated that the country’s banking penetration was less than 12%. As a result, e-commerce providers have found ways to circumvent the fact that many Ivorians do not have access to credit cards and other conventional financial services. For example, e-commerce services in Cote d’Ivoire typically accept cash-on-delivery.

Additionally, the use of mobile money is becoming increasingly common in Cote d’Ivoire, and is being integrated into e-commerce. All three major Ivorian mobile networks offer mobile-money services, and Jumia accepts mobile-money payments in most of its footprints, including Cote d’Ivoire. Ivorian mobile market leaders Orange and MTN had, respectively, 3.5 million and 2.6 million registered mobile-money accounts in 1Q15, putting the mobile-money penetration level in the country at more than 30% and one of Jumia’s strengths is that its investors include major mobile operators (the MTN and Millicom groups), which makes it more inclined to integrate mobile into its strategy.

Appendix

Further reading

Mobile Financial Services and M-Commerce: What People Want, TE0003-000875 (October 2015)

Mobile money: A novel use as an e-government tool in Cote d'Ivoire, TE0015-000028 (November 2013)

Author

Thecla Mbongue, Senior Research Analyst, MEA

thecla.mbongue@ovum.com

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