Selome Alemayehu, an HR and Finance Executive in an international investment company, has been on lockdown since the early months of the COVID-19 outbreak in Ethiopia. For a person like Selome who is anxious to travel to nearby supermarkets or eat in the local eateries as part of the caution against the pandemic, door-to-door delivery services are considered a lifesaver. “I prefer to spend most of my time in my house, especially after the pandemic,” she says. She adds that she has been a frequent user of Deliver Addis a local internet-based food delivery company and Asbeza, another thriving grocery delivery company.
The rising number of internet subscribers in Ethiopia has opened the door wide open for local internet-based businesses over the last five years. Along with this trend, the eCommerce and delivery sectors have seen a steady increase in the number of businesses, and despite a slow start in the first few years, the sector is seemingly tipping.
Deliver Addis, one of the oldest eCommerce platforms with dozens of restaurants functioning on its platform started out with a handful of restaurants around five years ago. The company has been expanding its scope of services for the last few months adding new supermarkets and liquor stores in its portfolio to reach an encouraging 150 vendors on its platform with 130 restaurants and 20 groceries and liquor stores. “Comparing with the past, the number of our customers has been increasing fast during the pandemic,” says Meron Sileshi, Marketing Associate at Deliver Addis, “We have also started with producers of alcoholic beverages which helped us provide services at reasonable prices,” she adds.
“Despite the boom, working in the sector is not a bed of roses. Frequent internet blackouts, poor awareness about online services within the community, and the absence of comprehensive online payment systems continue to challenge the businesses.”
Asbeza, a local internet-based grocery delivery company in Addis, is another eCommerce platform that has seen a hike in the number of its users during the pandemic. In partnership with Fresh Corner and All-Mart supermarkets, Asbeza has been delivering door-to-door for the past two years. “Before the pandemic, most of our customers were ex-pats. Since the pandemic, however, we are getting more local customers every day,” notes Bereket Tadesse, founder of Asbeza Delivery. Mulualem Geremew, Managing Director of Ahununu Express, another similar platform, agrees. He adds, his company has opened eight regional offices to increase its capacity and now delivers shipments across the country using air transportation.
Despite the boom, working in the sector is not a bed of roses. Frequent internet blackouts, poor awareness about online services within the community, and the absence of comprehensive online payment systems continue to challenge the businesses. “Within the five years of our operations, internet shutdown and being unable to track locations of customers have been the biggest challenges we had as a business,” underlines Meron. Bereket adds that the lack of awareness within the society regarding online transactions has been the biggest challenge his company, Asbeza, has had. “Some people tend to switch off their phone or change their location, and there is no government policy to regulate such acts, yet.”
Mulualem also agrees that the lack of clear government regulations guiding the sector is the most challenging factor in the business. “The government doesn’t even acknowledge the existence of this industry,” he complains, “It is not at all clear which government body regulates businesses like ours.” Mulualem is also wary about the logistics of national delivery. With the absence of local cargo flights in the country, he says his company is forced to deliver packages using passenger flights. Adding salt to the wound, the support these businesses get from financial institutions in terms of funding, and electronic payment channels are highly disorganized hampering the growth of eCommerce.
With all the challenges, the business executives are hopeful about the future of eCommerce in Ethiopia. A report that was recently published by Ethio-Telecom announced the number of data internet subscribers in Ethiopia has reached 23 million taking roughly 22% of the total population and creating tremendous potential for eCommerce businesses to tap into. Added to that, the government has just introduced a 10-year digital strategy that many eCommerce executives believe might transform the future of Ethiopia’s eCommerce industry.
Global reports show eCommerce is an almost USD 4 Trillion industry, as the sector takes root within the local community in Ethiopia, eCommerce companies are optimistic they will have a bigger share of the pie.