I have been watching Zimbabwe’s eCommerce scene for the past decade or so. I like to consider myself an expert or at the very least someone with considerable knowledge of this sector. I will be the first one to admit that things have changed a lot. In the beginning, around 2011 we didn’t even have a way to process local payments.
Worse still only very few locals had access to cards that could make international payments. You had to fill heaps of application forms and jump through hoops just to get a Visa or MasterCard. Then FBC came along with their MasterCard and now all you need to get a card is five bucks and a couple of minutes. We also have PayNow processing local payments for most sites.
Naturally, we have seen a rise in e-Commerce endeavours. I am particularly impressed by efforts by entities like Fresh Ideas (the owners of Fresh In a Box) and Yanaya for example. These are just two leading examples of entities that seem to be passionate about eCommerce and embracing it as a viable business strategy. All in all, there is a lot to cheer for when it comes to eCommerce development in Zimbabwe as we continue to see more entities and startups come in.
Naturally, the pandemic has helped. It has forced companies that traditionally shunned eCommerce as a way to make sales, to actually consider and embrace it. Traditional entities like OK, Spar and FoodWorld now sell online. Lockdowns have also changed to public’s attitude when it comes to accepting eCommerce. People were hesitant to make purchases online before but now we have thriving Facebook and WhatsApp markets.
Two glaring issues stick out
I have noted however with concern three glaring issues when it comes to the state of eCommerce in Zimbabwe:
- I have tested most major sites in Zimbabwe and the majority are half-hearted attempts. Take OK for example. Only OKMarts are involved and you have to pass your local OK branch to go to a store further away to collect your items. It’s either that or you pay through the nose for delivery, now that’s just plain stupid if you ask me. The same applies to Spar and FoodWorld. Only specific branches are involved.
- A lot of startups build platforms and online markets in a bid to attract local vendors. I will be blunt most of these startups will fail because it takes more than code to make the next Amazon. Look at how much Ownai has invested in order to make people come to it’s platform. You cannot just launch a fancy site and expect people to flock to it. Why would people come to your platform instead of say using Facebook and WhatsApp? Most market creators have no response to this. That’s why I mentioned Fresh Ideas, they have a compelling selling point. They handle all the complicated payments and website stuff for you. Even with that proposition they have only managed to take a couple of clients on board based on their own list of clients. You need an strategy to solve the chicken and egg problem i.e. people will only flock to your marketplace once it has people on it. One such strategy is in the title but more on that later.
- There is the issue of local payments being uncessarily hard to make. This has been somewhat alliviated thanks to the authorities raising mobile transaction limits to $20 000ZWL. Even with that generous limit imagine trying to pay for a T.V, Stove or even a phone. In other countries banks and the financial authorities have teamed up to make online payments easy. For a country with authorities who are always whining about people not accepting the local currency they are letting us down. It would be better if accepting international payments was easy. The truth is that getting to accept Visa/MasterCard or Paypal remains an impossible ask for most Zimbabweans. They have to open foreign bank accounts to do this. This again has hurt eCommerce uptake in Zimbabwe. It’s much easier on the side of paying clients who only, as I have pointed out, need five bucks to get a prepaid card.
Will somebody launch a local version of Instacart
So I have already mentioned the casual attitude with which traditional stores have taken up eCommerce. This creates an opportunity that a local version of Instacart can exploit. If you are not familiar with this startup here is how it works:
- The system hires people known as shoppers. These are more like drivers for Lyft or Uber. People with a means of transport and who live near a given supermarket.
- When you as a customer want to order something you select your closest /desired supermarket or shop and if there is an Instacart shopper linked to that store, you are then presented with the latest catalogue and prices from that store.
- You select the items you want. Pay for delivery and tip the shopper.
- The shopper goes to that shop, buys the items and delivers them to your doorstep.
What’s the advantage of this you ask? Well, the startup doing this doesn’t have to waste money, time and effort trying to establish a physical presence in every area they serve. In fact, they don’t have to even stock anything. They are just providing a convenient delivery service. Customers get more variety and pay less in delivery fees because goods are coming from the closest supermarket.
Of course in a country like ours, there will be the usual unique issues. Not least of which is making sure we have an updated catalogue. In normal countries, most items are always in stock. In our beloved country, basic items can be plentiful today and disappear from shelves tomorrow. A stubborn government can also cause shortages with mind-boggling price controls that have little to do with economics and all to do with pandering to their populist base.
These difficulties are not insurmountable in my humble opinion. You could task each shopper with making sure they keep their catalogues updated for example.
One response
Thanks for this (I would have missed this interesting write-up if it wasn’t for the tweet).
I think Spar deserved better visibility in your analysis, even better than Yanaya. I have used Spar online store many times, with all its shortcomings, I felt l had a true ecommerce experience especially during the pandemic waves.
1. Vaya had something (VAYA Express Personal Shopper) close to Instacart but was badly executed. WhatsApp just didn’t seem to work. There was too much wait time before you finish ordering. It was a mess. I even wrote a review on it. In any case it wouldn’t have gained critical traction due to point 2) below.
2. Overall, outside of the current pandemic (when the waves keep everyone at home), its hard to get ecommerce (as we see on the international scene) going in Zim. We just have too much excess capacity. Almost every household has someone sitting without a job. These are free runners, if you like. Even working people have excess capacity in an economy under performing in many sectors. There is always an hour or two to go and grab groceries yourself at the nearest supermarket.
3. Because of 2), any successful local ecommerce site just has to have a strong diaspora market segment. My reading in-between the lines points to this being the case with Fresh In a Box. The diaspora is exposed to what I would call true ecommerce and in any case they have need for the services since they are not on the ground.