Is Mauritius ready to switch to e-commerce?

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How big is e-commerce in Mauritius?

Only 42% of the world population is connected to Internet (3.025 billion humans online). The Internet penetration rate in Mauritius is 57.88% as of March 2016, against 26% for Africa and 78% in Western Europe. Mauritian banks in recent years have seen a significant growth in the number of their customers using Internet Banking, to conduct financial transactions. They were 269,188 in 2014 and 316,850 users recorded in August 2015, according to latest figures released by the Bank of Mauritius. By comparison, only 47,000 customers used to pay online in 2007. The increase is undeniably important, but slow though, since almost ten years have passed. This means above all that technically the market is limited to just over 300,000 potential customers, which is far too little for most economic models. For whatever the products you wish to sell, obviously those are generally not aimed at all age groups, or neither to both sexes. For example, suppose you sell men's apparel, this immediately eliminates nearly half of potential customers. Then you will be unable to appeal to all men of the targeted age group anyway. As you might have guessed, the pool of potential customers is in reality much lower. Not to mention that obviously some customers have more than one online payment card, which also reduces the actual number of real potential customers.

Why e-commerce is not kicking off?

In reality, it is difficult to accurately assess the weight of e-commerce in Mauritius. If the Bank of Mauritius publishes many statistics indeed, those include all type of Internet Banking transactions. The bank does not provide detailed statistics, thus the amount of 215 billion rupees (8.43 billion euros) of online transactions for the year 2015 refer to both bills settlement and e-commerce payments. Moreover, it is interesting to note that among the 600,000 online payment cards holders, including 121,000 credit cards, only half of those cardholders as we have seen above are really paying online. If indeed the amount of trade progresses, it was 117 billion rupees (2.98 billion euros) in 2014, the market does not extend so far. Customers who pay their bills, or already paid through the Internet, simply tend to do it more often while others have not changed their habits.

Facts do not lie. Indeed, many global players like Amazon refuse to deliver some of their products, or offer their services in Mauritius. And when they accept, the transport costs and customs complications can be unattractive to buyers. PayPal is another example, they will not allow you to receive payments in Mauritius as a corporation for some obscure legal reasons. While elsewhere on the African continent mobile financial services are making real progress and are regularly mentioned on the cover of magazines, the Mauritius Commercial Bank (MCB) mobile payment called “Juice MCB” failed to even convince its users in Mauritius. The Mauritian public does not really see the point of such services and prefer to continue to queue at the counter. No wonder therefore that the public is still not converted to e-commerce.

If the main obstacle to e-commerce in Mauritius remains the issue of online payment security, the true reason is above all economic. Although Mauritius has undeniably succeeded in reducing poverty over the last decade, in terms of per capita income the country is only 63th out of 84 among the developing countries. Or maybe people are simply not ready yet to include e-shopping in their culture? Given the small size of its population of about 1.2 million inhabitants, it is clear that the e-commerce market can not be only local for Mauritian companies wishing to live the adventure of online commerce.

2 Comment

  • It seems not worth it investing in e-commerce in Mauritius since the market is so small. Even PayPal which is the most globally accepted internet payment system does not work in Mauritius!

  • Hello Robin Hood, in fact 1 year after, Paypal is in Mauritius, via a collaboration with the MCB payment app- Juice. I think that E-commerce is slowing making its way in Mauritius.

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