I am intrigued by the growing number of E-Commerce platforms entering the Ugandan Market. In the era where there is a sudden shift from PC to Mobile, I have been fascinated at how Africa has skipped the entire PC era and jumped right into Mobile. The fact that our parents never used PCs but are very busy swiping through smartphone makes me very optimistic about the future.
Today am very optimistic about the E-commerce platforms that are going to disrupt traditional ways of doing business in Africa, but am going to use Kaymu Uganda as my case study partly because the team at Kaymu was very generous to accept my offer to talk to them about how they operate in Uganda, and because I think they have a better chance of survival according to the reasons am going to dive into.
I don’t know about other E-Commerce platforms but according to Justin Christianson, “Kaymu has an upfront investment of 3 years in Uganda, and we shall not be able to make a single profit off commissions for 3 years. We trust the system and we want people to first get value from the service before we can go ahead and make money”. I don’t know about you but if someone is putting this much money upfront, then I have all the reasons to trust the system.
Educating the Users:
Before I talked to Kaymu, a lot of my cousins who work downtown had reached out to me and told me about these “Kaymu guys” who come and teach them how to use the service. Now, I know for a fact these guys don’t care about anything but money and for them to be willing to try a new things means these “Kaymu guys” are doing something right. According to Justin, Kaymu spent the last year trying to sensitize the sellers about this new idea.
“We pointed out that this is a marketplace where you can go and place your product, and if someone likes the product, we shall take it from your hands, deliver it to them, collect the money and pay you. We inform the seller every step of the way via phone calls and SMS. The seller can also deliver the product themselves,” Justin added.
Slowly we see the traffic going online increase every year. I don’t remember the last time I sent an SMS and 3 years from now I will surely not remember the last time I went to a physical shop to buy my T-shirts or baby pampers (lol). In February 2014, Kaymu entered the Ugandan Market and right now they get more than 30,000 Visitors every day. If the conversion rate is 10% (for people who add items to their basket/cart) and the number of paying customers is say between 1-3% that means they will be getting about 300 customers doing business on Kaymu and am just speculating here. If someone can get this kind of traffic in less than a year, I have all the reasons to say they are going to thrive in the Ugandan market.
We mostly pay using mobile money and integrating this in the E-commerce platform will make the work very easy. However we have trust issues as individual and we don’t trust some systems right now, this makes the Kaymu model very easy to adopt because the customer only pays when they are satisfied with the product. With over 6,000 sellers on the platform and more than 60,000 products sold through the system, this show that customers are getting real value out of the service.
The Time factor:
When I asked Justin where he sees e-commerce in 5 years, he said there is a lot of hands-on work needed, you don’t just turn on the site and expect people to come. You have to teach sellers how it works and that there is an actual customer waiting for their product when an order comes in and this is no different from a buyer walking into their shop. However, with that in mind, e-commerce has reached a point where there is no going back. In Uganda, e-commerce is going to have more power here because it will remove a lot of middlemen who would ideally be increasing on the cost of the product without really adding a lot of value to it. Kaymu is going to make the market a lot more efficient because it is building a system that will be a go-to for anyone who wants to buy anything.
There are however some few issues with online shopping like delayed delivery and getting a product I might not want. I therefore am going to try buying something from Kaymu and I will follow up with my experience using the e-commerce platform in my follow up article.
Be sure to let me know or your experience shopping online and what you think about the e-commerce platforms in Uganda.