South African click-and-collect firm Pargo considers foray into rest of Africa

South African click-and-collect company Pargo is exploring an expansion into the rest of Africa, its CEO said in an interview, betting on e-commerce growth on the continent.

Africa is forecast to surpass half a billion e-commerce users by 2025, having shown a steady 17% compound annual growth rate of online consumers in the market, according to the International Trade Administration, a United States government agency.

This growth is driven by increasing internet penetration, smartphone adoption and the growing use of digital financial services, especially mobile money. "We're looking at an expansion strategy to move into multiple markets. We're already operational in Egypt as a second country, but we are quite seriously looking at, in the future, building a network across Africa," CEO and co-founder Lars Veul told Reuters.

He said the options would span the main economies in Africa.

"We don't know exactly [where] yet. So, it's more about the countries where e-commerce is booming or is expected to boom."

The expansion will also be driven by following its existing clients into countries where they operate outside of South Africa, he added.

Veul, a Dutch citizen who moved to Cape Town in 2012 from Amsterdam to help set up online marketplace Groupon in South Africa, said he co-founded the company in 2015 after realising that last-mile delivery was a serious challenge for e-commerce businesses on the continent.

Click-and-collect allows shoppers to avoid delivery costs and the agony of waiting for the delivery. It also lowers costs for last-mile delivery companies, who grapple with fuel expenses, product returns and difficulty in delivering to townships and rural areas.



-REUTERS