Lockdown measures and restricted living conditions in Africa and the Middle East (AME) might seem much the same as in the rest of the world. Globally, many markets have enacted physical distancing measures and school closures; prohibited public sports, entertainment and religious gatherings; limited or made restaurants and out-of-home eating unavailable; and restricted shopping, movement and travel curfews. With restricted and preventative shopping the norm around the world, even where there has been some easing of restrictions, many consumers have substantially reduced their physical shopping outings, opting for risk-averse alternatives, such as those found online.
AME consumers too have limited their shopping in supermarkets and grocery stores, but for many consumers, this is easier said than done. With massive traditional and informal trade outlets, and limited or non-existent modern trade outside of a handful of cities or just a single major city, AME has probably been one of the least prepared regions for the shift to online shopping.
But this has not curtailed AME consumers’ momentum toward online or digital shopping solutions. And they’re not only turning to modern trade retail providers as they seek greater shopping safety measures. Where modern trade fast-moving consumer goods (FMCG) e-commerce was nascent or underprepared for the influx of new shoppers, local service providers have been astute in identifying and delivering on the burgeoning demand for online grocery retail and delivery via innovative, tech-driven solutions.
In fact, this has largely been enabled by mobile-first technology, contactless payments—which were already well advanced across most of the African region—and drawing on adjacent industry capacity.
Mobile network provider, Safaricom, in Kenya has recently scrapped fees for mobile money transactions below US$10 (with over 20 million users) in order to encourage cashless payments. Via collaboration with independent e-commerce platforms, as well as other formal and informal service providers, such as Uber or local independent motorcycle transport providers like okadas in Nigeria or boda-bodas in Kenya, the move to limit contact retailing has been made possible by an entire ecosystem of providers who rapidly solve for consumers’ shopping needs via alternate, hyper-localised and innovative ways.
In an exclusive Nielsen study of 10 AME markets, consumers indicated they are doing much/a little more shopping online than prior to the novel coronavirus (COVID-19) outbreak. More than 40% of online consumers in the United Arab Emirates (UAE) and Saudi Arabia (KSA) and more than 30% in Qatar, Bahrain, Nigeria and Kenya said they are now shopping more online than before.
But online shopping hasn’t been easy for all shoppers in these markets. Many consumers have been faced with lack of access to technology or digital solutions, prohibitive data costs and speed, limited FMCG e-commerce providers and inadequate modern trade readiness or resources—such as logistics, fulfilment, online technology, mobile ordering apps, supply capacity and payment options for unbanked consumers. To overcome some of these challenges, entrepreneurial providers have stepped in to compensate and solve for the online FMCG obstacles and gaps.
Agile Alliances to Serve Consumers
Resourceful and innovative individuals and businesses have identified a number of niche and scalable opportunities to serve consumers’ altered COVID-19 shopping needs, including:
- Where modern trade retailers have been faced with overwhelming demand that has led to extended delivery horizons of up to two or three weeks or more, supply constraints and stock shortages, personal and valet shoppers, such as Uber and One Cart in South Africa, have taken on the shopping duties for consumers from supermarkets in their area and deliver within hourly or daily timeframes.
- Where public transport and movement has been limited, aggregated store app services (e.g., Zulzi in South Africa) allow consumers to order across multiple retailers (such as supermarkets, pharmacies or convenience stores) and provide delivery within shorter, immediate timeframes. Many of these service providers also offer discounts and reward schemes for loyal shoppers, together with one-touch reordering of essential items.
- Where physical retailers do not have e-commerce capabilities or where consumers do not have online access, consumers are able to place orders for collection using Whatsapp or other messaging services, including ordering and delivery from traditional trade stores.
- Modern trade retailers in Kenya (Carrefour and Tusky’s) have partnered with e-commerce and local logistics companies such as Jumia and Sendy to enable online shopping and fulfilment.
- Bahrain has launched a virtual mall to enable more than 100 shops to continue serving their customers.
- Independent, local retailers such as fruit and vegetable vendors, butcheries and bakeries are providing delivery services based on telephonic or messaging orders within near proximity areas, and include a broader range of essential FMCG items.
- Where consumers do not have access to formalised or modern trade shops, independent businesses (including Yebo Fresh in South Africa) are making deliveries to underserved and outlying communities of combo-packed, essential items.
- Other e-commerce providers (such as NetFlorist in South Africa) have pivoted their services to include ordering and delivery of essential FMCG goods.
Retail Reset to Match Massive Emerging Potential
As markets in AME move to ease restrictions, many consumers will return to physical brick and mortar stores. But a significant number of consumers are providing loud and clear signals to retailers that they intend to stay in the contactless, ‘online’ shopping environment after the COVID-19 lockdown.
When we compare consumers’ pre- and post-COVID-19 online shopping behaviours, we found a growing proportion of consumers—especially in Africa—intend to continue to shop online even as living restrictions are eased. And this will not only be for fashion and electronics, which were the top categories for online as it provided access to goods from beyond country borders (though this too will intensify as access to these goods becomes even further constrained), but it will also increasingly extend to FMCG shopping in a far bigger way. Nineteen percent more Nigerians, 18% more South Africans, 10% more Kenyans and Emiratis intend to shop for packaged food online post-outbreak than before.
As retailers and manufacturers reset for post COVID-19 living, many new and altered consumer shopping behaviours are likely to remain in place. Consumers will demand greater precautions in-store, opting for open over confined spaces, limited touchpoints and confined proximity within their local neighbourhoods and communities.
Where modern and traditional trade stores are unable to assure consumers of additional store safety measures, and where consumers have come to value the benefits and convenience of online and outsourced shopping, they will continue to utilise the providers of these services. Both modern and traditional trade, as well as manufacturers, can continue to benefit from these agile partnerships without needing to make significant and immediate investments to serve consumers.