Sunday, 13 September 2015

Uganda’s Online retail industry.

Uganda is home to a growing sector of online entrepreneurs such as web developers, e-commerce sites for online retail services such as Jumia and Kaymu. 

Hellofood for online food orders and delivery, Lamudi for real estate, Jovago for hotel booking and travel. There is also a crop of job portals such as Everjobs, Brighter Monday and Uganda jobline and many more that cut across the East African region that every job seeker is now familiar with names.
Today however I choose to focus on the online retail sector in Uganda, where store owners have adopted the use of websites and social media platforms such as Facebook, Instagram and Whatsapp to promote and drive sales of their available stock.

Online retail is a young industry and with the Ugandan market that is driven by the physical, there is a great deal of scepticism on whether the industry will develop enough to be profitable for industry entrepreneurs. Ugandans are online previewers and often complete their purchase at the store after confirmation of specifics that they require from the given item to be purchased.  

This is usually because the store owners conveniently leave out sizes and prices when they advertise their items online mainly because they do not want the competition to know to know how much they items cost. However this can be a problem for them when a real customer who does not have time to inbox or call them but wants to make up their mind and effect payment by either mobile money or sending someone to the shop for a quick up of their purchased item.

The phrase, ‘Amaso gali munaglo,’ directly translated to mean ‘the eyes are in the hands,’ best describes the nature of Ugandan shoppers. However, there is hope on the horizon with a new online retailer showing Ugandans willing to experiment with trials, that this is a business model that can actually work after immense investment in awareness. Yes, awareness and I do not mean just the customers but also the vendors that are sourced locally because if the conversation that I overheard recently is anything to go by; we have still got a long way to go.
Vendor: ‘So you called me about some of my things the other day.’

Vendor Manager: ‘Yes!’ she responded as she wondered where this conversation was heading.

Vendor: ‘So since they were delivered to the customer yesterday I want my money now.’

Vendor Manager: ‘Now…, what do you mean?’

Vendor: ‘Shoes was delivered this week so i want my money, ’he said as only a Kikubo retailer 

Vendor Manager: ‘Sebo, that is not how this works. If you remember at the beginning I told you that you will receive payment at the end of the month. I explained all this before you signed the contract.’

Vendor: ‘But I want my money now.

Vendor Manager: ‘Sebo, it is not about what you want now, it is …’ she said before she was cut off by the vendor.

Vendor: ‘Shoes was bought, not so, I want my money.’

Vendor Manager: ‘No we have policies and processes sir. Processes that I need to follow.’

Vendor: ‘Tongamba ku processes, is this your father’s company?’ (Don’t tell me about processes, is this your father’s company?)

Vendor Manager: ‘Sebo, let’s not start talking like this I clearly explained this to you before you agreed to become a vendor.’

Vendor: ‘Naye, you know me also you make an exceptions for me.’

Vendor Manager: ‘Sebo, there are no exceptions. Besides it is midway the month, I will be calling you in 2 weeks to pick your payment. Just be patient.’

Vendor: ‘Eh nyabo, 2 weeks naye njagala sente zokulya kati.’ (But Madam, 2 weeks – but I want to eat my money right now.)

The vendor did not leave with his payment that day but he was smiling all the way out 2 weeks later with a month’s pay in cash. Therein lies the dilemma –the smaller retailers are willing to risk and sign up to utilise the online retail service and yet the more structured establishments with financial muscle that would greatly benefit from the platform as a means of reduction in advertising spend - are still sceptical. It seems to me that the vendor has indeed gained the upper hand from this arrangement or has he?

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