There is life after Jumia. This was once the main online shopping store in Tanzania to a country’s estimated 23 million internet users.
Towards the tail end of 2019, Jumia left the country, and since then shopping online or ordering online has been, shall we just say ‘order-less’[1].
Jumia, which used to be the main e-commerce platform in the country, no longer operates, leaving a big portion of Tanzania’s online shoppers, shop-less. With at least 15% of the total population connected to the internet, there is a big chunk of the country that shops online.
What is the significance of e-commerce in Tanzania, or what is the relevance of having the capacity to order your daily consumer productsfrom the palm of your hands and delivered to your door step? Extremely huge.
This remains a largely untapped sector being operated by a few, informal individual suppliers, store owners, who can take your order on WhatsApp and bring it to you. The result is the government losing revenue and the consumer left unprotected.
For example QNET which is an e-commerce based direct selling entity that has taken interest in covering this gap and mending the trade holes so created. As a direct selling company that incorporates e-trade to be widely accepted and benefit the millions of Tanzanian internet users, it needs to be broadly understood by the relevant parties that govern such access.
E-commerce in Tanzania is still in its infancy, however, it undoubtedly has the potential to grow rapidly. Now, while the demand is great, there is a hiccup; Tanzaniansare very skeptical of e-commerce and for that matter, direct selling.
Ironically, the country is one of the leaders in mobile money transfers across the continent but paying online just doesn’t "sit" right with them, for now.
This is why Jumia left and the very reason why a global e-commerce businesssuch as QNET has stepped in.
Considering the fact that only 0.7 per cent of the population owns or uses credit cards and only 1 per cent of the population buys or pay bills online.
Now couple that with unplanned housing settlements which means no proper delivery addresses and the mistrust in online sellers,and the growth of e-commerce in this huge market is, if anything very much stalled.
It should be noted that, Tanzania has the fourth largest e-commerce consumer base in Africa commanding an estimated 1,593 million users, this according to the UNCTAD B2C E-Commerce Index. In fact, UNCTAD ranks Tanzania only second to Kenya in the e-commerce trade potential.
“While there are no statistics on the volume of online sales, 1,444.6 million transactions valued at USD 21.73 billion were carried out through mobile money transfers between July 2016 to April 2017,” reportsBank of Tanzania. [2]
With only 0.7% of the population using credit cards (Hootsuite Survey 2018), there is a massive need to build Tanzania’s online shopping confidence.[3]
The current gap is enormous and the thirst for consumer goods is in demand.
Records show that QNET is an experienced e-commerce company with a large presence across West Africa and a global footprint which offers a unique solution.
Trade in the region, especially with the outbreak of the Covid-19 pandemic and the requirements for social distancing, demonstrates that the need for e-commerce has never been greater.
Tanzania is an underdeveloped nation with lack of infrastructure specifically in many urban centers, which enables an opportunity for e-commerce to take off. In this respect, QNET faces an enormous challenge in capitalising on this market and fulfilling the needs of many.
The African continent has more than 400 million internet users making it the second-largest internet user population across the World, after China. So, while this may be a challenging market, the need to explore it is vital.
Companies such asQNET and the former Jumia are the solution. Amazon, for instance has already penetrated South Africa. The Mall of Africa in Nigeria is an online mall that is expanding its footprint across West Africa. Alibaba has also taken a lead in Africa and Kilimall in Kenya has realised the growth projections for of online e-commerce.
QNET for instance, with its accreditation of carrying e-commerce successfully across West Africa, stands not only with the consumer but also with individual distributors, who form the sales force of the company and are the small businesses and micro-entrepreneurs that add revenue generation and GDP output for the respective nations. The company offers an opportunity to revive e-commercein Tanzania after the exit of Jumia.
With the country's quest to alleviate poverty by improving the quality of life, and with much of the population living in rural areas, e-commerce via the channel of direct selling offers that solution.The ability to sell and buy from the comfort of one's mobile phone, via a known entity,equalizes the opportunity to provide access to goods to people in the most remote parts of Tanzania.
Essentially, direct selling employs the opportunity to market goods and services directly to consumers, in their own homes, away from permanent retail premises.
The word-of-mouth referrals enables direct sellers the opportunity to showcase products unavailable at many retail outlets, directly in a person's home, where in many cases that person is already a friend or an acquaintance.
Huge e-commerce platforms like QNET cannot single handedly operate in a country where logistics come down to ‘the third street by the church with the blue door’, they need a local, and trusted, on ground partner that can actually understand logistics in the country.
The issue is not access to the goods and services. In fact, Tanzania is one of the regional leaders in the use of the Internet. The real issue is the ability to trust where the product is coming from and to determine whether the product will be delivered to the consumer. To do this, oneneeds to locate that consumer, and the consumer needs to trust where that product is coming from. Furthermore, with no proper address, the task is a proverbial puzzle to solve for any seller; not unless ofcourse you have an "on-the-ground partner," such as QNET!
To better understand the process, a product is ordered via QNET’s online platform, a local partner completes the trade. The multiplier effect is enormous and with huge benefits to the government.
If this process is replicated, manifold, in the thousands and hundreds of thousands, e-commerce will increase the base of trade in Tanzania. It essentially makes transactions easier for both parties, the seller and the buyer.
With a functional e-commerce platform, local businesses have the opportunity to increase the sale of their products, and the consumer attains access to products without the hassle of fragmented logistics, doing sowith a service delivered at international standards.
If one were to understand the direct selling arena, one may realize that it’s an industry based on relationship-marketing and has lasted more than 150 years. To date, more than 100 million people globally are involved, either full-time or part-time.
E-commerce coupled with direct-sellingmeans safer and affordableaccess to goods and services for the consumer and likewise, safer, cheaperavenue for small businesses to grow. If QNET is a player in this mammoth global industry, why not allow it to serve the people through the intricacies of the direct-selling e-commerce arena!
