Booming e-commerce in Togo

lThe alarm clock indicates 9 o’clock that morning. Aline Lawson, looking relaxed, has just opened her loincloth shop in Lomé’s central market, Assigamé. His first instinct is to turn on his cell phone. The young retailer has just opened an online sales site for her products. For this self-taught e-commerce business who has just completed a digital business education, bringing her business to the Internet was a necessity. Firstly, because of the declining sales of loincloths on the stalls, where merchants have been watching the invasion of counterfeit Chinese loincloths for years. E-commerce is an alternative and offers some breathing room. Now she swears by selling her premium loincloths online in the face of this tough competition. “It took me a long time to understand that I had to innovate to reach customers. Since my education I have started offering my loincloths and other accessories online, mainly through my website. After only a few months I can say that my turnover has increased thanks to this new approach”, she reassures in a cheerful tone. Like Aline, more and more Togolese entrepreneurs are under the spell of online trade.

In Togo, the e-commerce sector is booming and is even starting to adopt mores. More and more Togolese have integrated it into their daily lives. The authorities are aware of its importance to the country’s economy and are developing strategies for its popularization. This new deal has enabled the emergence of a new class of entrepreneurs, especially since the onset of the health crisis.

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The pandemic, an accelerator

Meal delivery, pharmaceutical products, buying and selling platforms, digital payment services… Today, several companies are leading the way. Located in the northern suburbs of the Togolese capital, Kanyi Group company is a figurehead in Togo’s e-commerce sector. In 2018, it launched the Kanyi Express logistics platform which specializes in all kinds of deliveries. “I was in the sale of local agricultural products when the business started a few years ago, Kanyi Koffi Anoumou, the CEO confides. But seeing the void in this new online business sector, I launched Kanyi Express in 2018.” According to him, there is no doubt that this sector will play a leading role in the digital economy in Togo. He wants proof of this in the increase in the activities of his structure during the pandemic. “In the beginning we only made about a hundred deliveries per month. Today, thanks to our logistics department, we run about 5,000 deliveries of all kinds of products per year, including meals, real estate and others. We even offer to do the shopping instead of our customers being busy with work. The e-commerce sector is booming in Togo and this will enable the emergence of new entrepreneurs”, sums up the entrepreneur.

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Lomé, already attractive

The rise of the e-commerce sector is resonating locally beyond the borders of the country. As a result, start-ups that have already proven themselves in this sector on the continent do not hesitate to try the Togolese adventure. For example, Gozem, the African Uber, was founded in 2018 in Togo. La société de réservation de services de transports en ligne (taxi-motos et taxi-voitures) a franchi le cap de 2 millions de courses effectuées fin 2020. « Nous sommes très motivés par l’impact que nous avons pu avoir en si peu de time. And we are incredibly happy that thousands of users shop at Gozem in Togo every day,” said Emeka Ajene, co-founder of Gozem. The start-up is now fueling other ambitions by diversifying its service activities, especially with purchasing and delivery.

An ecosystem to build

Now, when customer needs are just a click away, the challenges are still immense. Not only are online payments via bank accounts or PayPal not yet part of the habits of Togolese, the vast majority of whom do not have bank accounts, but the existing financial system in the country is not yet able to provide the necessary ecosystem. For the development of the sector it was therefore necessary to innovate based on mobile money. Thus, in order to guarantee the smoothness of online transactions, the sector has seen the birth of reliable operators of mobile payment services integrators that reassure all players, especially e-merchants and users. There are at least four offering their services in Togo and Paygate Global is one of them.

To take advantage of the services of this platform considered to be the first integrator and leader of electronic payment solutions in Togo, all you need to do is maintain an account on the interface. The mobile payment services offered are for a fee that varies between 3% and 4% of the cost of the online transaction. For Koffi Bonin, promoter of this structure launched in 2016, the e-commerce sector holds great promise for the future, as it allows Togolese entrepreneurs to open up to the outside world. “We all have to win by promoting e-commerce in Togo,” he says. At Paygate Global, we are now making it possible for our customers to buy and sell services and goods via mobile money. Our customers have electronic wallets that they use to deposit money into their bank account. So that they can easily acquire and fund their international payment card to conduct international online transactions,” explains Paygate Global’s general manager. In less than two years, the company has completed 125,000 online transactions for a cumulative total of 107 million CFA francs (approximately 163,000 euros).

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Laws to regulate the sector

In 2017, the country recorded transactions estimated at $342 million. But according to a source close to the Department of Commerce, this figure could have doubled by 2020 with the coronavirus pandemic. Faced with this enthusiasm, the authorities have decided to set up a regulatory framework to regulate the sector. This is to prevent the use of e-commerce for illegal activities. Thus, the country began deploying a whole legal arsenal to ensure the safety of online service platform operators and users, and to reprimand all acts that could harm the digital economy sector.

Togo passed successively in 2017 a law on electronic transactions, in 2018 a law on the fight against cybercrime and finally a law on the protection of personal data in 2019. Now equipped with this legal arsenal, the country has recently a National Cybersecurity Agency and Cybersecurity Support Fund. The authorities intend to encourage the Togolese to operate in this sector in complete safety. “The habits have started to change, even in the countries of the sub-region next to us. The reasons cited by some people who are still reluctant to use this form of e-commerce are mainly those of trust and fear of being scammed. But there are rules in the e-commerce sector in Togo these days. It reassures players, both platform operators and users. That is why we must now promote this regulation. It’s a whole bunch of laws that set the regulatory framework for the sector,” recalls Sitou Yibokou, executive director of Togo Pride, a social impact association, promoter of the e-commerce week in Togo, the first edition of which took place last August.

To boost the e-commerce sector, the authorities are planning to prepare a five-year strategic development plan (2022-2027). To achieve this, the Department of Commerce, in collaboration with the United Nations Conference on Trade and Development (UNCTAD), is refining strategies to promote the implementation of structuring and innovative projects, following a preliminary survey of the sector that was carried out in 2018. Five-year plan dedicated to the development of e-commerce will focus, among other things, on strengthening the regulatory and legal framework, that of the capacities of the different actors, access to finance for companies in the sector and the introduction of logistics.

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Connectivity, another challenge

There remains the thorny issue of Internet access. According to the Hootsuite platform, about 1.7 million Togolese had access to the internet in 2019 for various activities, including e-commerce. Despite the staggering success of the e-commerce sector since the start of the Covid-19 pandemic in the country, the lack of infrastructure and high costs remain a headache for authorities. Henceforth, the only challenge to be taken up to boost this sector remains the accessibility of the Internet connection. And authorities want to post the package by 2022. The Minister of Digital Economy, Cina Lawson, announces that “about 90% of the population will have access to high-speed internet by 2022 and strategies are being defined to achieve this result. Insufficient for the actors of the sector. The latter believe that that significant efforts remain to be made, especially given the lack of infrastructure. “We believe that it will be necessary to strengthen the existing communication infrastructures to have a positive impact on the sector,” adds Bertrand Aquereburu, application developer, we will never be able to make this e-commerce sector one of the pillars of the economy if its main input, which is the Internet, is not accessible to everyone.Small agricultural cooperatives would like to have websites to reach their customers online, but it rural connectivity problem is hampering the development of the e-commerce sector,” he analyzes.

In West Africa, Togo is not the least favored country in terms of internet connectivity, both in terms of fixed broadband internet and in terms of mobile internet penetration. According to the Togolese authorities, the Internet penetration rate has tripled, from 7% in 2016 to 21% in 2019. Nevertheless, Togocom, the most important provider of Internet access ever publicly and recently privatized, maintains its dominance in terms of market share in the provision of Internet access, but the quality of the service offered remains desirable. The rise of the e-commerce sector is starting to attract foreign companies specializing in the sector, such as the French group Majorel, which has just established itself in Togo.

But will the arrival of foreign competition help this sector better? For the time being, the experts gathered at the first edition of the e-commerce week, which was held in the Togolese capital from August 16 to 29, rather recommend cooperation between the different actors to lay the foundations for initiating the post-Covid – 19 period. Because, if the prominence of e-commerce is well established around the world, especially with the current health crisis, the sector is just starting to structure itself in Togo.

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