[Column] Josephine Wawira: How Black Friday is giving Africa's economy a lift
It is quite phenomenal how in recent years, both e-commerce players and retailers have used Black Friday to sweep thrifty shoppers off their feet. So much that the shopping event is no longer restricted to a single-day shopping spree but has rather taken over the entire month to become Black November. If you drove around the streets of Nairobi, Lagos and Johannesburg for instance, the number of billboards showing discounted Black Friday sales, as well as digital advertisements, are proof of the retailers’ craze to maximize consumer spend during the BF period.
Undoubtedly, the ripple effect that Black Friday sales have on African economies cannot be overlooked. According to Black Friday Global, a marketing website, Black Friday sales are 1,331% and 1,952% higher than average-day sales in the continent's two largest economies, Nigeria and South Africa respectively. In this view, how is Black Friday providing an economic lift to the continent?
More businesses are joining the BF movement to boost sales
With Black Friday comes the need by shoppers to get a variety to choose from. Before adding the products to their carts, consumers will compare different vendors until they land the best price and product quality. As a result, this has created a pool of opportunities for more businesses to join the movement in a bid to have a share of the BF pie. With every vendor aiming to top the list of more products and/or services sold, competition has increased as consumers seek to be impressed and convinced to purchase from one and not the other sellers. At the end of the month of November, businesses have recorded upturning, if not groundbreaking profits, compared to any other month of the year.
E-commerce companies like Jumia, which pioneered Black Friday in Nigeria and most African countries back in 2014, has reported that the number of sellers and brands that participated in the 2019 Black Friday increased by +22%and 7% respectively from the previous year. According to Jumia, Black Friday Month is not business as usual, with most sellers recording 100 times more sales on Black Friday(s) than in usual business days. This is attributed to the increased online visibility and traffic that the vendors receive from the online platform during the campaign period; with the online platform receiving millions of visits during the campaign period.
Notably, the BF movement has become a cocktail of online and retail sales from both small and medium, as well as established businesses. A classic case is that of supermarket retailer Carrefour, that has not only strengthened its retail presence across Africa but also it's online offering through partnerships with Jumia.
Consumers save as much as 50%
For instance, the Black Friday Global estimates that consumers receive an actual average discount of about 60% in South Africa, 57% in Nigeria and 54% in Kenya; in the latter, spending approximately 9,000 KES per person in both online and brick-and-mortar stores. Such levels of rebates and highly discounted products during Black Friday are breathtaking and have pushed more consumers across Africa to participate.
Employment and cross border trade
A Black Friday cycle is completed by a supply chain that must work closely to provide a satisfactory customer experience. To ensure ample stock of inventory, sellers end up hiring extra hands including delivery personnel. Due to the high demand and the need to adapt to customers' responses, most retailers and online companies outsource services and extend partnerships with third-party logistics providers. As a result, hundreds of thousands of jobs are created across the continent during the Black November month, which goes a long way in easing the economic strain brought about by high levels of unemployment in Africa. According to BCG report published in March 2019, online marketplaces could create 3 million jobs in Africa by 2025.
Additionally, Black Friday has enabled entrepreneurs to do business across borders, purchasing and selling products and services from one country to another. Cross border trade is expected to further thrive in coming years, with the implementation of the African Continental Free Trade Area Agreement.
With all factors considered, one can confidently appraise the impact of Black Friday, and the role the annual shopping extravaganza will continue playing in lifting Africa’s economies.
Will campaigns like Black Friday help boost the penetration of e-commerce in Africa, now at only 1% as a percentage of the total retail market; to reach the rate of 12% in the US and 20% in China? As you ponder on this, allow me to wish you the very best of the Holiday Season.