Africa’s largest e-retailers MaxAB, Wasoko in merger talks

Key Takeaways

Given Africa's rapidly expanding population and a scarcity of formal retail infrastructure, approximately 70% of consumables, beverages, and personal care items are distributed through local outlets or kiosks. The informal retail sector on the continent is estimated to be valued at $850 billion, and the merchants served by Wasoko and MaxAB already cater to over 65 million consumers. Both Wasoko and MaxAB are capitalizing on the emerging e-commerce market in Africa. They provide a solution for informal retailers by offering an app that enables them to restock within a day or two of placing an order. Additionally, these companies extend financing options for merchants and operate logistics units to ensure the smooth transportation of goods, including items such as oil, toilet paper, and food, from warehouses to merchants, navigating challenging road conditions. Despite the potential, some retailers need help to sustain operations in Africa's largest markets. Issues such as difficulty in securing suitable real estate, high relocation costs for managers, and inadequate infrastructure have been cited as hurdles by other players in the industry.