If you’ve been following African tech for the past decade, you’ve watched the same movie play out repeatedly. A well-funded e-commerce startup launches with fanfare, promises to become “the Amazon of Africa,” raises millions in venture capital, expands aggressively across multiple markets, then quietly shuts down or pivots away from the original model.

Jumia went public on the New York Stock Exchange in 2019, only to see its stock price collapse by over 90%. Konga changed hands multiple times before being absorbed into a logistics company. DealDey shut down. Efritin closed. Gloo barely lasted a year. The list of African e-commerce casualties stretches long, and the pattern is consistent enough that it demands explanation.

The conventional wisdom blames infrastructure—poor roads, unreliable addresses, expensive logistics. Or it points to low credit card penetration and payment friction. Sometimes it’s attributed to cultural factors: Africans prefer to see and touch products before buying, the story goes. These explanations aren’t wrong, but they’re incomplete. They describe symptoms without diagnosing the disease.

The real reasons e-commerce struggles in Africa are more fundamental and more interesting. Understanding them reveals not just why companies fail, but what it actually takes to build sustainable e-commerce businesses on the continent.

The Last-Mile Economics Problem

Every e-commerce company knows that logistics is expensive. What African e-commerce founders underestimate is just how brutally unforgiving the unit economics become when you’re delivering low-value items across sprawling, poorly mapped cities with terrible traffic.

Consider a typical scenario: a customer in Lagos orders ₦5,000 worth of groceries from your platform. Your gross margin on that order might be 15%, or ₦750. Now calculate the cost of picking, packing, and delivering that order. You need a rider who spends an hour in traffic navigating unclear addresses, burning fuel in stop-and-go congestion, calling the customer multiple times to find their location. The all-in cost of that delivery easily exceeds ₦1,500, even before accounting for failed deliveries, returns, or customer service.

This wouldn’t be fatal if order values were high or if customers ordered frequently. But African e-commerce basket sizes remain stubbornly low compared to other markets. A customer might buy a single bag of rice, a phone charger, or a few toiletries. They’re not placing weekly grocery orders of $100 or buying expensive electronics regularly. They’re making small, infrequent purchases that barely cover the cost to serve them.

The math gets worse when you factor in customer acquisition costs. In mature e-commerce markets, companies can afford to lose money acquiring customers because lifetime value is high. A customer acquired for $50 might generate $500 in margin over several years. But in Africa, that same $50 acquisition cost might generate only $75 in lifetime margin because order frequency is low and retention is poor.

Some companies tried to solve this by raising delivery fees, but customers simply abandoned their carts. Others tried minimum order values, but that killed conversion rates. A few experimented with subscription models, but willingness to pay upfront for delivery benefits proved limited. The fundamental problem remained: the cost structure of e-commerce wasn’t compatible with African consumer behavior and purchasing power.

The companies finding success have either fundamentally restructured the economics or redefined what e-commerce means. They’ve built logistics networks that serve multiple revenue streams, not just their own platform. They’ve focused on high-margin categories like fashion or electronics rather than low-margin groceries. Or they’ve moved into B2B e-commerce where order values and frequency justify the delivery costs.

The Trust and Payment Paradox

African consumers are extremely price-sensitive and deal-conscious, yet they’re simultaneously reluctant to pay online. This creates a paradox that cripples e-commerce conversion rates.

Cash on delivery became the dominant payment method across African e-commerce specifically because consumers didn’t trust platforms with their money upfront. They wanted to see the product, verify its quality, and only then hand over cash. This makes intuitive sense from a consumer protection standpoint, but it destroys e-commerce economics.

Cash on delivery means you bear all the risk and cost of delivery before receiving any payment. You front the capital to purchase inventory, pay for logistics, and send riders across the city—all before collecting a single naira. If the customer isn’t home, changes their mind, or ordered the wrong item, you’ve spent money with nothing to show for it. Industry data suggests that 20-30% of cash-on-delivery orders in African markets end in failed deliveries or returns.

Even when delivery succeeds, you now have cash scattered across your rider network that needs to be collected, reconciled, and redeposited into your accounts. This creates additional costs, operational complexity, and opportunities for fraud or theft. Meanwhile, your capital is tied up in inventory and outstanding deliveries rather than being available for growth.

The companies that pushed harder for online payments found that conversion rates dropped dramatically. Customers who were perfectly willing to buy with cash on delivery would abandon their carts if required to pay upfront. Even customers with bank accounts and debit cards preferred not to use them for online purchases, citing concerns about fraud, failed transactions, or simply not wanting to share financial information with unfamiliar websites.

This trust deficit isn’t solved by better checkout experiences or payment partnerships. It’s rooted in years of experience with fraud, whether from fake online sellers, unreliable delivery, or substandard products. Building trust requires sustained investment in customer service, consistent delivery experiences, generous return policies, and quality control—all expensive propositions that further pressure already strained unit economics.

The Marketplace Mirage

Many African e-commerce companies adopted the marketplace model, thinking it would allow them to scale quickly without holding inventory. Just build the platform, attract sellers, take a commission, and let network effects do the rest. It’s worked brilliantly elsewhere: Amazon started as a marketplace, Alibaba is a marketplace, and so is Jumia.

But the marketplace model only works when three conditions are met: enough buyers to attract sellers, enough sellers to attract buyers, and sufficient trust in the platform to mediate transactions. In most African markets, none of these conditions exist at the scale needed to sustain a marketplace.

The cold-start problem is brutal. Sellers won’t invest time listing products on a platform with few buyers. Buyers won’t browse a platform with limited selection. You need to subsidize both sides simultaneously—paying for customer acquisition while also incentivizing seller onboarding. This burns capital faster than almost any other startup model.

Even when you solve the cold-start problem, quality control becomes a nightmare. Third-party sellers often list fake products, use misleading photos, fail to fulfill orders, or provide terrible customer service. Every bad experience reflects on your platform, destroying the trust you’ve worked so hard to build. But policing thousands of sellers requires massive operational overhead that erodes your commission-based business model.

The successful e-commerce players in Africa have increasingly moved away from pure marketplace models toward inventory ownership or hybrid approaches. They curate sellers carefully, hold some inventory themselves, and exercise strict quality control. This requires more capital and reduces asset-light scalability, but it’s the only way to ensure customer experience and build the trust necessary for repeat purchases.

The Category Selection Mistake

Walk through any African marketplace or shopping district and you’ll see why replicating Amazon’s “everything store” approach doesn’t work. The products people buy most frequently—fresh food, household staples, personal care items—are available everywhere at competitive prices. Street vendors sell them. Neighborhood shops stock them. Supermarkets offer them with loyalty programs and credit. Mobile money agents now sell airtime and data. Why would someone order these items online, pay a delivery fee, and wait hours when they can walk five minutes and get them immediately?

Many e-commerce companies started by selling precisely these high-frequency, low-margin categories because that’s what drives repeat purchases in developed markets. But in Africa, these categories are the hardest to compete in. You’re asking customers to change behavior that’s deeply convenient, pay more for delivery, and trust you with products they can easily inspect elsewhere.

The categories that work for e-commerce in Africa are those where online provides genuine advantages: products that are hard to find locally, items where selection and comparison shopping matter, goods where price transparency benefits consumers, or products people prefer buying discreetly. Fashion works because stores have limited sizes and styles. Electronics work because people want to compare specifications and prices. Books work because local bookstores carry minimal inventory. Beauty products work because authentic products are hard to source and counterfeits are common.

Starting with the right category focus isn’t just about product-market fit—it’s about building a business model where e-commerce’s cost structure can actually deliver value that justifies its expense.

What Actually Works

Despite the graveyard of failed e-commerce ventures, some companies are finding sustainable models. Their success offers a blueprint that has nothing to do with simply copying Western playbooks.

The winners are deeply vertical. Rather than trying to sell everything to everyone, they dominate specific categories where they can control quality, build expertise, and create differentiated value. They’re in fashion, beauty, or electronics—not groceries and household goods.

They’ve rebuilt logistics from scratch rather than relying on third parties. They own warehouses in strategic locations, employ their own delivery teams, and invest in technology that makes routing and tracking efficient. This capital intensity looks expensive, but it’s the only way to control costs and customer experience.

They’ve accepted that African e-commerce requires patient capital and longer payback periods than Western models. Profitability might take five to seven years, not two to three. Growth is slower but more sustainable. They’ve designed for the reality of their markets rather than the fantasy of replicating Amazon’s trajectory.

Most importantly, they’ve recognized that “e-commerce” in Africa needs to be redefined. It’s not about replacing physical retail—it’s about complementing it. It’s not about competing on price—it’s about offering selection and convenience for specific categories where those attributes matter most. It’s not about rapid, venture-backed scaling—it’s about building trust slowly, one successful delivery at a time.

The future of e-commerce in Africa belongs to companies willing to accept these realities rather than fight against them. The opportunity is real, but success requires patience, capital, and a willingness to build differently than companies have built anywhere else.