Uganda set to become East Africa’s second-largest online market

Uganda is projected to become the second-largest online market in East Africa, trailing only Kenya, as digital commerce transaction values are expected to reach $1.88 billion. Industry analysts say the sector is on track for a growth rate of 15 to 20 percent through the end of 2025.

While the country is experiencing a rapid rise in internet penetration and mobile phone adoption, experts warn that small and medium-sized enterprises and agropreneurs must move faster to digitise or risk being left behind. Despite the massive market potential, many local businesses still face significant barriers to entry, primarily due to a lack of technical expertise and digital literacy.

Abdelbasset Boulelouah, a programme manager for the International Trade Centre, said digital marketing remains an underused asset in the country. He noted that while many small business owners are active on social media platforms such as WhatsApp and TikTok, they often lack the skills to turn that engagement into a formal e-commerce strategy.

The scale of the challenge was highlighted in a study by Ipsos, which surveyed more than 3,000 small businesses across Uganda. The report found that only 35.5 percent of these enterprises have access to a smartphone, and fewer than 10 percent use a computer for their daily operations.

The digital gap is particularly pronounced in the agricultural sector. Claire Konwujuni, a branding and marketing strategist, said that for agropreneurs to access international buyers, they must transition away from traditional sales models. She noted that without digital tools, local businesses are essentially locked out of foreign markets.

In response to these gaps, the ITC recently held training sessions in Lira City as part of the Strengthening Agri-business Resilience and Competitiveness project. The initiative is designed to teach entrepreneurs how to conduct market research, build digital brands and navigate international trade requirements.

As Uganda’s middle class grows and consumer habits shift toward the convenience of online shopping, the pressure on smallholders to adapt is increasing. However, researchers point out that high registration fees and the difficulty of obtaining certification for agro-based products continue to hamper the ability of small businesses to compete on the global stage.