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The rise of Chat Commerce in Africa

By , Senior Vice President of Global Sales, Clickatell.
11 Apr 2024
Werner Lindemann, Senior Vice President of Global Sales at Clickatell.
Werner Lindemann, Senior Vice President of Global Sales at Clickatell.

In the world of African commerce, Chat Commerce has become a powerful influence. Chat Commerce enables consumers to engage with businesses and make purchases through chat-based platforms like WhatsApp and Apple Messages. As a pioneer in mobile messaging and chat commerce innovation, Clickatell has navigated the complexities of African markets, witnessed substantial growth and confronted challenges that pave the way for exciting opportunities.

The past year has been a testament to our success in Africa. The value of our chat commerce deals signed in 2023 increased by 201% compared to 2022. This proves that businesses and consumers have started to embrace chat platforms, recognizing their effectiveness in facilitating seamless and effective business communication and transactions. The widespread adoption of chat commerce solutions represents a significant opportunity across industries.

Our close observation of the African market has unveiled some key trends. We have noticed a surge in the use of artificial intelligence (AI) and natural language processing (NLP) algorithms to enhance the chat experience. This included chatbots and virtual assistants that could understand and respond to customer queries, offer personalized recommendations, and facilitate seamless transactions. We also observed the integration of secure payment systems within chat platforms, enabling users to complete purchases without leaving the conversation.

The African market has its own unique requirements. Many African countries have a young and rapidly growing population, which presents a substantial opportunity for businesses to tap into this tech-savvy demographic. However, the market's diversity and varying levels of digital infrastructure across different regions require tailored solutions that can accommodate different languages, cultural nuances, and connectivity challenges. With a prevalence of feature phones and limited high-speed internet access, we have solutions that are compatible with low-end devices and adaptable to low-connectivity settings.

While it's difficult to pinpoint a single technology or market need driving the African market, the overarching need for accessible and convenient solutions is evident. Chat commerce fulfils this need by leveraging the ubiquity of messaging apps, which are already widely used by Africans. By integrating commerce capabilities into these platforms, businesses can reach customers wherever they are, reducing barriers to entry and enhancing convenience.

Looking ahead, we envision countries like South Africa, Nigeria, Kenya, and Egypt to spearhead chat commerce adoption. Their robust digital ecosystems and expansive consumer bases position them as frontrunners when it comes to market potential.

Throughout 2023, we've witnessed many success stories across industries, showing the power of chat commerce. One notable success story from 2023 involved one of the largest retailers in Southern Africa. By embracing chat commerce, they were able to reach a large customer base, particularly in rural areas where less than 70% of their customers have access to the internet. The retailer introduced e-brochures that contained their specials on WhatsApp and received incredible results. They sent the e-brochures to over 118 000 customers on WhatsApp over a few weeks. Only 6% opted out, 12% did not have WhatsApp and 94% of their customers who received the WhatsApp messages also read it.

The regulatory environment within the African countries we operate in has shown positive developments during 2023. Governments and regulatory bodies are increasingly recognizing the potential of digital commerce and are making efforts to create a supporting environment. Some of the efforts included the establishment of guidelines that protect consumer rights, ensure data privacy, and promote fair competition. These changes have contributed to greater confidence among businesses and consumers, fostering healthy growth for chat commerce.

Looking ahead, we are optimistic about the future of chat commerce in Africa. As internet accessibility continues to improve and smartphone penetration deepens, the adoption of this technology will accelerate. Innovations in AI, NLP, and secure payment systems will further enhance the chat experience, encouraging customer loyalty and driving increased conversions for businesses. With the African market's vast potential and appetite for digital solutions, chat commerce is poised to become a significant driver of economic growth, convenience, and inclusivity in the years to come.

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