Page 25 - Logistics News - November December 2022

L A S T-MIL E D E L I V E R Y
Last-mile delivery: Growing

opportunity storm in Africa

By Nomvo Kasolo, Frost & Sullivan’s Consultant

Strong African economies can be created on the back of efficient transport solutions and investments.

ell-functioning transport networks are
the heartbeat for many nations, bringing
W with them several social and economic
opportunities at city, regional and country levels. For Africa,
last-mile delivery is a growing opportunity storm transport
sector. What gave rise to the storm, who will ride or sink and
where are the highest areas with potential?

African cities are seeing extraordinary growth, with over
60 percent of Africans expected to live in cities by 2030.
With this comes higher demands for efficient supply chains
for growing urban areas and the remaining rural space to
avoid expansion of the rural-urban divide. The year 2020
highlighted the extent of this crack in many local supply Kenya and other markets. With most of the regions, the
chains, but also accelerated the growing e-commerce in growth needs to be met by additional investments in key
Africa. Now, two years down the line, there are lessons infrastructure (physical and digital) to ensure long-term
learned and several opportunities tapped, evident by the rise solutions.
in transport start-ups. In 2021 alone, 21 transport start-ups
were established in Africa, addressing digitisation, last-mile Overall, the high-potential areas by segments in the next
delivery solutions, increasing safety, etc. decade are expected to be through growth in B2C models
(by product type), e-commerce (industry), the distributor
The African last-mile delivery market was valued at segment (by sales channel) and parcel services (by delivery
US$1.14 billion in 2021. By 2030, this is expected to reach type). In South Africa alone, the projected revenue generated
US$2.35 billion. The industry can be segmented into by e-commerce is US$7.07 billion for 2022, with expansion
categories by product, industry, sales channel, delivery to US$14.90 billion by 2027 (at a CAGR of 16.09 percent
type, service speed and geography. Based on current from 2022-2027). User penetration is expected to rise from
trends, players with the fastest turnaround times across all 45.1 percent in 2022 to 58.1 percent by 2027. This trend
categories will enjoy the largest growth. The waiting time for is compared to changes in the global market, but Africa
consumers has been cut from the previous five to six days to has the potential to leapfrog failures from its predecessors.
one-day or same-day delivery services. The shift has created With the growth in global funding for last-mile delivery
ripple opportunities for establishing efficient sales channels. solutions, Africa is not without examples to learn from. This
beautiful storm could, however, be cut short if challenges
Digital communication platforms that allow for easy in supporting infrastructure and restraints like corruption
returns, exchanges and increased connectedness between (delivery sector) are not addressed.
client and vendor are also gaining ground. Aside from
newer entrants, even larger industry giants are also creating Africa is open and hungry for business and has taken
innovative models to reduce shipping costs and ride this strides in showing this. With key frameworks like the African L O GI S T I CS NEWS
opportunity wave. Region expansions of both newer Continental Free Trade Area (AfCFTA) in place (targeting to
entrants and established players are in Egypt, South Africa, increase intra-trade), efficient delivery solutions are here to
Nigeria, Ivory Coast, Tunisia, Ghana, Ethiopia, Zambia, stay and last-mile delivery is one of those. •

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