Digital Marketplaces or Brand-Owned Stores – What’s the Best Path for African Sellers?

African e-commerce is expanding rapidly, and sellers have two primary options for reaching consumers: digital marketplaces and brand-owned stores. Both models offer unique opportunities and challenges, making the choice between them crucial for long-term business success.

As more African consumers shift to online shopping, businesses must decide whether to leverage the visibility and reach of established marketplaces or invest in building a self-sustaining brand store that allows full control over operations. This article explores the pros and cons of selling on digital marketplaces vs. owning a branded online store, how each model fits into Africa’s evolving e-commerce landscape, and which option is best suited for different types of sellers.

The Rise of E-Commerce in Africa

Africa’s e-commerce sector is projected to reach $46 billion by 2025, fueled by mobile adoption, digital payments, and an increasing number of online shoppers (Statista). With over 570 million internet users, African sellers now have unprecedented access to digital consumers, but choosing the right platform to sell on remains a critical decision.

The rapid urbanization and expansion of middle-class consumers are driving significant growth in online retail. More shoppers are seeking convenience, better product variety, and secure payment solutions, making the competition in the digital retail space fiercer than ever. Sellers must understand their audience, operational capabilities, and long-term goals to determine which model aligns with their business strategy.

The two primary models are:

• Selling through digital marketplaces (e.g., Jumia, Takealot, Kilimall, and social commerce platforms like Facebook and Instagram)
• Running a brand-owned online store (via Shopify, WooCommerce, or custom-built websites)

Each approach has distinct advantages and limitations that sellers must evaluate based on their business goals, product types, and target audience.

Digital Marketplaces: Opportunities and Challenges

Advantages of Selling on Digital Marketplaces

1. Instant Access to a Large Customer Base:Digital marketplaces already have millions of active users, allowing new sellers to immediately reach a broad audience without spending heavily on marketing.
2. Lower Upfront Costs:Setting up on a marketplace is faster and cheaper than building a standalone store. Sellers avoid expenses like website development, hosting, and payment processing setup.
3. Built-In Trust and Credibility:Established marketplaces have trust mechanisms (ratings, reviews, buyer protection policies) that help sellers gain consumer confidence quickly.
4. Simplified Logistics and Payment Handling:Many marketplaces offer integrated logistics and payment solutions, reducing the complexity of order fulfillment and ensuring seamless transactions.
5. Optimized for Mobile Commerce:With 65% of e-commerce transactions in Africa happening via mobile devices (PWC), marketplaces provide mobile-friendly platforms that simplify the shopping experience.
6. Marketing Support from Marketplaces:Many platforms run promotional campaigns, sponsored ads, and seasonal discounts to drive more traffic, benefiting individual sellers.

Challenges of Selling on Marketplaces

1. High Competition and Price Wars:Marketplaces are crowded with sellers, often leading to price wars and slim profit margins.
2. Platform Fees and Commissions:Marketplaces charge listing fees, transaction fees, and commissions on every sale, reducing seller profitability.
3. Limited Brand Control:Sellers have less control over branding, customer data, and marketing strategies, making it harder to build long-term customer relationships.
4. Dependency on Marketplace Policies:Businesses are subject to platform regulations, algorithm changes, and potential account suspensions, which can disrupt operations.
5. Data Limitations:Sellers have limited access to customer data and analytics, making it harder to personalize offerings or re-engage past buyers.

Brand-Owned Online Stores: Opportunities and Challenges

Advantages of Owning a Brand Store

1. Complete Control Over Branding:A brand-owned store allows for full customization, enabling sellers to create a unique customer experience that strengthens brand identity.
2. Higher Profit Margins:Without marketplace fees or commissions, sellers can retain more revenue and set competitive prices while maintaining profitability.
3. Direct Customer Relationships:Sellers own customer data, purchase history, and contact information, allowing them to build loyalty programs, remarket to past buyers, and personalize offers.
4. Greater Flexibility in Pricing and Promotions:Unlike marketplaces, brand-owned stores do not restrict discounts, bundles, or special offers, providing sellers with more pricing freedom.
5. Scalability and Business Growth:A brand store allows sellers to scale without restrictions, integrate third-party tools, and explore omnichannel selling across multiple platforms.
6. Independence from External Policies:Business owners do not have to worry about sudden changes in marketplace policies, giving them full control over store operations.

Challenges of Running a Brand-Owned Store

1. Higher Upfront Investment:Setting up an independent store requires website development, hosting, security, and payment processing setup, which can be costly.
2. Marketing and Traffic Generation:Unlike marketplaces that provide traffic, brand-owned stores rely on SEO, paid ads, social media, and content marketing to attract customers.
3. Managing Logistics and Customer Service:Sellers must handle fulfillment, shipping, and customer support independently, requiring investment in logistics infrastructure.

The Role of Live Shopping in African E-Commerce

Live shopping is emerging as a powerful sales channel that bridges the gap between marketplaces and brand-owned stores. Platforms like Auqli are enabling sellers to:

• Engage directly with customers in real-time, answering product questions and addressing concerns.
• Showcase product quality through live demonstrations, increasing buyer confidence.
• Generate immediate sales conversions, capitalizing on impulse buying behavior.
• Build brand trust by offering transparency through interactive selling.

Businesses that integrate live shopping into their marketplace presence or brand-owned store strategy can benefit from higher engagement, improved customer trust, and increased conversions.

Final Thoughts

There is no one-size-fits-all approach when choosing between a digital marketplace and a brand-owned store. African sellers must evaluate their business goals, budget, and scalability needs before committing to a model.

However, the future of African e-commerce is increasingly omnichannel, and sellers who leverage a combination of marketplaces, brand-owned stores, and live shopping will maximize their sales potential and brand growth. Sellers looking to enhance consumer trust, increase engagement, and drive more sales can start by exploring Auqli—Africa’s leading live shopping platform that combines interactive selling with secure, transparent transactions.

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