Safaricom joins e-commerce space

[Nefertiti]

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Safaricom is developing an e-commerce portal for launch next month. Long overdue. E-commerce is likely to do very well going by the huge amounts poured into Jumia by big VCs.

I hope they look for proper talent to drive this like they did with the Lab at Karen.

In Summary

• The platform, known as Masoko, Kiswahili for markets, is modelled after retail e-commerce giants Alibaba (Chinese) and Amazon (US).
  
• It is currently undergoing internal testing ahead of rollout later this month, according to people familiar with the matter.
  

http://www.nation.co.ke/business/Safaricom-sets-up-online-sales--portal/996-4172784-jq0m5n/index.html

[Nefertiti]

Of course I still think that Lab is long overdue... and they should come up with big things to live up to their larger-than-life image - which is not matched by revenues. M-pesa remains the only product under their belt - which is a shame for their cash & talent. Calling the e-commerce portal "Masoko" is also moronic.

[hk]

Ecommerce is bound to disrupt kenya retail market because already manufacturers are looking for a different distribution channel as supermarkets struggle. Also kenya has a sizable internet users mainly mobile. If safaricom can mine its data to target potential customers that might make the platform quite appealing to sellers. Already Jumia and olx has intergrated Mpesa into their system, unless safaricom comes up with one click payment like they have  in their fibre home payment option.

[RV Pundit]

E-commerce in kenya has surmounted some challenges - mainly trust  & payment(m-pesa)- but still delivery or shipping is big problem-- if someone hacks delivery in  a place with no addressing systems - then e-commerce will fly. Maybe work with uber-little-taxify-mondo for instant delivery at least in Nairobi

[Nefertiti]

Ecommerce is bound to disrupt kenya retail market because already manufacturers are looking for a different distribution channel as supermarkets struggle. Also kenya has a sizable internet users mainly mobile. If safaricom can mine its data to target potential customers that might make the platform quite appealing to sellers. Already Jumia and olx has intergrated Mpesa into their system, unless safaricom comes up with one click payment like they have  in their fibre home payment option.

Safaricom are going one-click. They have muscle so they will hold stock to ensure delivery. Amazon has this advantage over Alibaba and sites like eBay. Stocking ensures quality of goods plus speed and guarantee of fulfillment. The downside is the extra cost which narrows margins for everyone. If you look at the Amazon and Alibaba reports you will see the dramatic margin difference.

But it's better this way (stocking and fulfillment stores) in a place like Kenya with a myriad of trust issues. Fulfillment will be guaranteed which helps small sellers. Safaricom will be a reseller (middleman) rather than just a platform. Meaning legal and organizational impact should the dominance maneno continue.

Mpesa will continue to grow with this. They may have to integrate other payments - Equitel, paypal & cards - which I think is now mandated by the CBK.

Another thing Safaricom has a mature data analytics platform. With acres of customer, network and Mpesa data they must have proper insights to target and entice buyers and sellers. If they play this well they can be a local Amazon. It all depends on many perfect steps they must take. Jumia is well funded and run - while OLX is the local eBay - these two are no pushovers.

[Nefertiti]

E-commerce in kenya has surmounted some challenges - mainly trust  & payment(m-pesa)- but still delivery or shipping is big problem-- if someone hacks delivery in  a place with no addressing systems - then e-commerce will fly. Maybe work with uber-little-taxify-mondo for instant delivery at least in Nairobi

They should have their own delivery system - or cheap Sendy - for cost reasons. Also control due to the strikes which can be disruptive. I think GPS should be explored for address. Dial-a-beer and -pizza delivery have seen their growth hampered by this address issue where they could deliver to highend address and corporates but not to mitaas.

[Nefertiti]

E-commerce is more advanced in Southern and West Africa. SA is dominated by Takealot Online. Econet's Ownai is the big player in Zim - they even have a CEO for the complete subsidiary - since 2015. Nigeria is Jumia territory together with Konga. Trust is a big issue there due to the corrupt culture.

SA is estimated at $2.2B
Nigeria at $12B
Kenya at <$1B

[Georgesoros]

The only problem is the post office has not developed physical addressing system for the 50 million Kenyans. I heard they were supposed to do it ten years ago, and a commission was appointed but ........they took the money and did nothing

[Nefertiti]

The only problem is the post office has not developed physical addressing system for the 50 million Kenyans. I heard they were supposed to do it ten years ago, and a commission was appointed but ........they took the money and did nothing

You can build it yourself and make a buck.

[hk]

Safaricom are going one-click. They have muscle so they will hold stock to ensure delivery. Amazon has this advantage over Alibaba and sites like eBay. Stocking ensures quality of goods plus speed and guarantee of fulfillment. The downside is the extra cost which narrows margins for everyone. If you look at the Amazon and Alibaba reports you will see the dramatic margin difference.

But it's better this way (stocking and fulfillment stores) in a place like Kenya with a myriad of trust issues. Fulfillment will be guaranteed which helps small sellers. Safaricom will be a reseller (middleman) rather than just a platform. Meaning legal and organizational impact should the dominance maneno continue.

Mpesa will continue to grow with this. They may have to integrate other payments - Equitel, paypal & cards - which I think is now mandated by the CBK.

Another thing Safaricom has a mature data analytics platform. With acres of customer, network and Mpesa data they must have proper insights to target and entice buyers and sellers. If they play this well they can be a local Amazon. It all depends on many perfect steps they must take. Jumia is well funded and run - while OLX is the local eBay - these two are no pushovers.

Data analytics for Mpesa and a proper delivery system might be the secret sauce . I also think there are plenty of opportunities for fully vertical platforms, e.g party.jumia.co.ke that's doing very well in alcohol segment.

[Georgesoros]

The only problem is the post office has not developed physical addressing system for the 50 million Kenyans. I heard they were supposed to do it ten years ago, and a commission was appointed but ........they took the money and did nothing

You can build it yourself and make a buck.

Absolutely, but this usually comes from an act of parliament. Has to be very detailed and must be included in the building code of every jurisdiction - like all odd numbers for houses on your right hand side, etc.

[Nefertiti]

The only problem is the post office has not developed physical addressing system for the 50 million Kenyans. I heard they were supposed to do it ten years ago, and a commission was appointed but ........they took the money and did nothing

You can build it yourself and make a buck.

Absolutely, but this usually comes from an act of parliament. Has to be very detailed and must be included in the building code of every jurisdiction - like all odd numbers for houses on your right hand side, etc.

It's the craftwork they lack. The technology and initiative. The act can materialize any day. It's probably in the bylaws already.

[Nefertiti]

Parkrpen, any chance we're gonna see that addressing system of yours in this millennium?


It seems Nigeria is way ahead.


https://www.standardmedia.co.ke/business/article/2001262526/africa-s-start-ups-stuck-in-the-red-as-e-commerce-thrives-globally

Nigeria has emerged as the leading e-commerce hub in sub-Saharan Africa with 40 per cent of e-commerce startups located in the West African country.

Exciting findings

[RV Pundit]

Yeap Nigeria seem to be stealing the show with e-commerce however in the long run I bet kenya will emerge the winner 1) we have sorted payment system with m-pesa 2) we have largely sorted internet infrastructure with broadband on steroids 3) Kenyans are entrepreneurial - we are just some few missing steps - mainly logistics - if we had POSTA transforming into FEDEX - or someone in the logistic business working the whole last mile -

[Nefertiti]

Not likely. Nigeria is the African talent powerhouse which is why they have beat mzungu-dominated SA. SA on the other hand has a much better infrastructure than Kenya and Nigeria. Kenya will be playing third fiddle to SA and Nigeria for a long time.

Yeap Nigeria seem to be stealing the show with e-commerce however in the long run I bet kenya will emerge the winner 1) we have sorted payment system with m-pesa 2) we have largely sorted internet infrastructure with broadband on steroids 3) Kenyans are entrepreneurial - we are just some few missing steps - mainly logistics - if we had POSTA transforming into FEDEX - or someone in the logistic business working the whole last mile -

[Nefertiti]

E-commerce in kenya has surmounted some challenges - mainly trust  & payment(m-pesa)- but still delivery or shipping is big problem-- if someone hacks delivery in  a place with no addressing systems - then e-commerce will fly. Maybe work with uber-little-taxify-mondo for instant delivery at least in Nairobi

Jumia seems to have cracked delivery by hiring freelance drivers and boda boda crews. They have a Sendy-like delivery network. Very good.

[RV Pundit]

Not in tech. Kenya will emerge the sub-saharan leader although Nigeria has huge scale.

Not likely. Nigeria is the African talent powerhouse which is why they have beat mzungu-dominated SA. SA on the other hand has a much better infrastructure than Kenya and Nigeria. Kenya will be playing third fiddle to SA and Nigeria for a long time.

[hk]

Not likely. Nigeria is the African talent powerhouse which is why they have beat mzungu-dominated SA. SA on the other hand has a much better infrastructure than Kenya and Nigeria. Kenya will be playing third fiddle to SA and Nigeria for a long time.

Yeap Nigeria seem to be stealing the show with e-commerce however in the long run I bet kenya will emerge the winner 1) we have sorted payment system with m-pesa 2) we have largely sorted internet infrastructure with broadband on steroids 3) Kenyans are entrepreneurial - we are just some few missing steps - mainly logistics - if we had POSTA transforming into FEDEX - or someone in the logistic business working the whole last mile -

Other than sheer scale of nigerian market, the other factor is the informal nature of the nigerian's retail market compared to SA or even Kenya. So ecommerce in Nigeria was bound to take off faster than SA or kenya. But with the implosion of kenya retail sector, kenyan ecommerce market is bound to accelerate. Here's an earlier report by mckinsey on africa digital https://www.mckinsey.com/industries/high-tech/our-insights/lions-go-digital-the-internets-transformative-potential-in-africa

[Nefertiti]

Other than sheer scale of nigerian market, the other factor is the informal nature of the nigerian's retail market compared to SA or even Kenya. So ecommerce in Nigeria was bound to take off faster than SA or kenya. But with the implosion of kenya retail sector, kenyan ecommerce market is bound to accelerate. Here's an earlier report by mckinsey on africa digital https://www.mckinsey.com/industries/high-tech/our-insights/lions-go-digital-the-internets-transformative-potential-in-africa

I hope Pundit and you are right. I was surprised to see all 3 top African Fintech startups go to Nigeria.

http://allafrica.com/stories/201707130001.html

[gout]

Going by what I am seeing on Facebook the online model is picking. On Facebook there are purely online shops as well as those advertising their businesses. Makes it very easy for price comparisons.