How Africa’s B2B e-commerce platforms can thrive in tough times

In Africa, businesses are facing major challenges due to inflation and currency pressures, but despite these headwinds, Omniretail has managed to achieve a 9% growth in gross margins. Deepankar Rustagi, the CEO of Omniretail, recently sat down with CNBC Africa to discuss how B2B e-commerce platforms in Africa can not only survive but thrive in tough times. Rustagi highlighted the significant challenges faced by the retail landscape in Africa, particularly in Nigeria. Issues such as limited access to working capital, high interest rates, and increased costs of logistics have put a strain on businesses. The impact of inflation and currency devaluation has further exacerbated the situation, leading to rising prices for basic consumables. Despite these challenges, the retail sector has proven to be resilient, serving the economy through highs and lows, including times of economic downturn and the COVID-19 pandemic. Omniretail has been focusing on efficiency and scalability in response to the tough economic climate. By collaborating with ecosystem partners and digitizing the supply chain, the company has emerged as a profitable player in the market. Rustagi emphasized the importance of strategic partnerships with brands and distributors to streamline operations and improve credit worthiness across the value chain. One of the key factors contributing to success in the B2B e-commerce space is the ability to navigate competition and sustain growth. Rustagi acknowledged the challenges faced by startups and traditional businesses in the industry, noting that many companies struggle to achieve the right unit economics necessary for scaling. Some players have failed to prioritize value addition and sustainable margins, leading to capital burnout and eventual pullback from the market. Collaborations, mergers, and acquisitions have become strategic moves for companies seeking to expand in challenging environments. Looking ahead, Rustagi discussed the future of retail and supply chain management in Africa. He emphasized the importance of modernizing traditional trade and digitizing existing stakeholders to enhance efficiency. By investing in digital warehousing and logistics partners, the industry can elevate small businesses and contribute to economic growth. When it comes to funding, Rustagi highlighted the essential role of capital in building a strong and scalable startup. Despite the changing global economic landscape, he remains optimistic about securing funding from development institutions, finance institutions, and family offices that view Africa as a key market for growth. By tapping into the right quality of capital, companies like Omniretail can navigate tough times and continue to expand their operations. As Africa's B2B e-commerce platforms navigate the challenges of inflation and currency pressures, innovative strategies, strategic partnerships, and sustainable funding sources will be crucial for building resilience and driving growth in the sector.