Gains in internet connectivity in Djibouti over the last decade are laying the foundation for more online-based commerce to flourish. Although e-commerce is at an early stage of development in the 1m-strong domestic market, online retail presents a strategic opportunity to create new income sources for communities that have traditionally remained outside the formal economy, notably women and small-scale entrepreneurs.
Female Participation
Less than one-third of women between the ages of 15 and 64 are active in Djibouti’s labour market, according to a January 2019 World Bank report, signalling a sizeable cohort who could potentially help the country achieve both macro development targets and more inclusive growth. Given the well-demonstrated effects of rising female incomes on child welfare, education, health care and nutrition in developing economies, bringing more women into the formal economic fold is a priority.
To enable more women to participate in e-commerce, in late 2018, the World Bank launched a $3.8m regional project targeting small and medium-sized enterprises (SMEs) run by women that produced e-commerce-marketable goods. The programme provided training in online commerce, and better access to domestic and export markets via e-commerce platforms. In addition, it offered inroads to financing by connecting SMEs with financial institutions focused on lending to women.
Internet Penetration
The growing share of Djiboutians with internet access has laid the groundwork for accelerating the growth of e-commerce (see ICT chapter). The share of the population connected to the internet rose from 6.5% in 2010 to 22.9% in 2015 and 59% in 2019. This figure remained steady in 2020, according to the World Bank. Another report by the UN Conference on Trade and Development published in March 2022 noted substantial progress in Djibouti’s e-commerce readiness indicators over the 2017-20 survey period. In addition to improved internet penetration, the study highlighted increased postal reliability as an important contributor to e-commerce readiness gains. In contrast to markets with more decentralised footprints or several commercial centres of note, the capital, Djibouti City, is home to more than two-thirds of the population which is expected to facilitate economies of scale in terms of domestic retail logistics as the market develops further.
The proliferation of social media in the country similarly lends itself to e-commerce growth, as these platforms represent an important avenue for micro-targeting potential customers. As of 2022 Djibouti had roughly 260,000 active social media users, equivalent to more than one-quarter of the population and representing close to half of all internet users.
Early Movers
Although e-commerce is still in its early days, there are several local and regional players active in this space. Toukam is one of the largest online retailers in the country, selling clothing, domestic goods and electronics. The platform uses targeted ads on Facebook and Google among other social media sites to reach local consumers. Djiibuy and Djibstore are two other niche merchants that sell clothing and accessories in the e-commerce space.
Africa’s largest e-commerce portal, Jumia, is also present in the country, operating as a virtual bulletin board for consumer-to-consumer sales. Founded in Lagos, Nigeria in 2012, Jumia became the continent’s first unicorn – a technology company valued at more than $1bn – in 2016. As of 2021 they had partnered with over 100,000 sellers and offer a range of goods including clothing, electronics, vehicles and real estate.
Despite the fact that Djibouti remains a frontier market when it comes to e-commerce, its experience facilitating transport logistics for the broader East African region’s more than 400m consumers (see Transport & Logistics chapter), as well as its improving indicators on internet connectivity and social media use, point to growth potential in the segment, with positive carry-through prospects for women and SMEs in particular.
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