The Impact of Telematics in Africa’s E-Commerce Market

0

SEATTLE, Washington — Telematics is a technology used in companies’ transportation cars that gathers information on the car’s whereabouts and utilization. For instance, when the vehicle stops, gas levels, required servicing and repairs are reported via a tracker placed inside the car. This tracker is connected through the car’s “onboard diagnostics (ODBII) or CAN-BUS port with a SIM card, and an onboard modem enables communication through a wireless network.” Through these reported data, telematics enhances E-commerce in Africa and improves the continent’s economy as a whole.

Africa’s Increase in E-commerce

According to IT News Africa, telematics can tremendously improve the online business sector in Africa. This is especially true during the pandemic. Based on Mastercard’s research, 68% of South Africans have increased their e-commerce purchasing due to COVID-19. As a result, product deliveries rose to satisfy customers. In addition, lockdowns and pandemic policies have caused many people to rely more on goods being delivered to their doorsteps.

Telematics tremendously enhanced how vehicles operate and enable a safer ride for employees and packaged goods. Telematics became necessary for carrier organizations because it allows employees to satisfy customers by providing them with faster deliveries. As a result, telematics enhances e-commerce in Africa by minimizing package mix-ups and delivery failures. In addition, telematics makes consumers trust the business more by ensuring that they will receive their products. As a result, customers are more willing to make online purchases.

Successful African Online Shopping Companies

Jumia is an example of a successful digital organization in Africa. It experienced a 50% increase in online shopping within the first half of 2020. Jumia started in 2012 in Lagos, Nigeria, and is now the region’s most prominent digital organization. In addition, GetBoda, an online shopping carrier firm in Kenya, experienced an increase of 150% in purchases at the beginning of the COVID-19 pandemic.

Benefits of Increased Online Shopping in Africa

The increase in digital purchases and telematics is helping to alleviate some of the negative influences of COVID-19 by allowing businesses to shift focus and remain open. This, in turn, enables people to remain employed, thus reducing poverty. Africa also plans to expand the effects of online shopping by establishing the African Continental Free Trade Area (AfCFTA).

The AfCFTA mandates that associates eliminate 90% of taxes on products, coordinate money and transactions, and develop “an Africa-wide Customs union,” which can tremendously increase continental trading. By 2030, when AfCFTA comes into full effect, it is projected to reach a marketplace of 1.2 billion people along with a Gross Domestic Product of $2.5 trillion. Therefore, using this agreement and telematics enhances e-commerce in Africa as customers can enjoy shopping without paying expensive tariffs.

Telematics Helps Companies Cope During a Recession

During a recession and the COVID-19 pandemic, organizations have to make fast and tough choices regarding their revenues and expenses. According to Geotab, telematics can assist organizations with controlling their costs and staying responsive to consumers’ present and future requests. For example, company owners and managers are unable to watch delivery drivers 24/7. Therefore, telematics’s ability to monitor drivers allows companies to keep the best employees to deliver goods safely.

Telematics and E-commerce Increase Africa’s GDP

Based on Google and the International Finance Corporation’s research, Ecommerce in Africa could add “$180 billion to the continent’s GDP by 2025 and $712 billion by 2050.” Doing so raises the existing GDP by $115 billion (4.5%). In addition, GDP’s in Kenya, Morocco and South Africa are projected to increase from 7.7% to 9.2% in the next four years and 15.2% by 2050.

Telematics enhances e-commerce in Africa through its technological capabilities. African citizens are now used to the convenience of digital purchasing and buy meals, clothes and electronic products digitally instead. Therefore, the benefits of telematics can tremendously help the smooth sailing of online purchase deliveries in years to come.

Jannique McDonald
Photo: Flickr 

Share.

Comments are closed.