E-Commerce Readiness Assessment of Madagascar

The Project at A Glance

The Malagasy Government has demonstrated its deep commitment to making e-commerce a lever for economic development. E-commerce is increasingly viewed as instrumental in allowing buyers and sellers to trade more efficiently and it facilitates the elimination of barriers between marketplaces. However, there are major challenges that persist with regard to e-commerce, including obstacles that hinder its effective uptake.
International Economics Consulting Ltd. (IEC) conducted an eTrade Readiness Assessment in Madagascar, including the mapping of e-Trade-related needs specific to the local context with the aim of establishing a basis for UNCTAD and eTrade for all partners to assess their potential support for e-commerce development to the next stages.

What We Found

The e-commerce ecosystem in Madagascar remains insufficiently developed and lags behind in contrast to other countries in the region. Madagascar is ranked 118th out of 144 countries in UNCTAD’s 2017 B2C e-commerce index, which measures countries’ ability to engage in e-commerce, based on four indicators namely: the number of internet use; secure servers; account penetration; and postal reliability score.
Madagascar’s efforts to develop e-commerce faced significant disruptions in the period of institutional non-recognition between 2009 and 2013, during which the country was unable to benefit from international institutional aid. However, the private sector has played a major role in the development of e-commerce in the country. In partnership with the European Union, and the French Embassy, private sector institutions developed a vision of ICT advancement, constituting the foundation for the development of e-commerce and digital services.
Based on our consultations with the public and private sectors, we found that:

More than 85% of respondents consider it necessary to make the promotion of electronic commerce a priority for the country;
A strategy is needed to better integrate the various efforts aimed at making e-commerce a lever for economic and social development, especially to promote internal trade and exports;
The development of a strategy could reduce the significant digital divide between the main cities and the rest of the country, and the promotion of access to ICT infrastructure for SMEs;

Our Strategy and Impact

To improve Madagascar’s performance in e-commerce, major efforts are needed. Some of the recommended actions for Madagascar include:

Developing a national strategy for the advancement of e-commerce, integrating a plan to promote the digital economy and e-commerce in the various sub-sectors of the economy, and promoting a business framework better suited to the specific needs of e-commerce.
Developing a national development plan for 2025 for the development of the digital economy in Madagascar.
Identifying indicators to obtain and evaluate key data on e-commerce, and launching a regular study on the use of ICT in general and e-commerce in particular.
Including e-commerce and its export potential in the development strategies and/or updating diversification and export strategies.

Our Core Solutions

At International Economics Consulting, our team helps clients in identifying the strengths of online trading platforms, gaps and strengths in the legal framework, payment systems, infrastructure, packaging and standards gaps, logistics and trade facilitation framework to take advantage of online tools for sales. We offer a full diagnostic of the e-commerce sector, mapping out the enterprises’ strengths and the institutional ecosystem enabling it. We work alongside different organisations and the private sector to empower them to leverage the opportunities presented by the digital revolution.