Let’s give this a try.
I’ve been thinking about doing this for a while and realised that unless I just jump in head first I will procrastinate indefinitely and be tormented with my digressive thoughts, random quips, pearls of ignorance and my need to claim my stake of airspace in already crowded skies.
I’m a dilettante. I have no problem admitting this. I’m interested in a number of things instigated by the work I do, the life I live and an innate curiosity. I’m a Juma-of-all-trades and proud of it. The words I put out here will be representative of this and take this as a disclaimer — I represent no interests, organisation, cult or clique. My ideas are my own (or those borrowed, inspired, stolen from the ether) and while I will likely reference and show bias to my work, my company, my people this is because these things are impossible to escape when you’re just trying to vent. Now that that’s out of the way time to plug my business and make myself a thought leader! ;)
I’ve been thinking a lot about customer adoption to new things and the role of digital commerce in Tanzania, naturally inspired by what I’ve been throwing myself into recently. There is the widely touted analogue of mobile money as an example of the uniqueness of Tanzania(ns) in product adoption (Mobile money has joined the pantheon of single stories in Tanzania. When we talk about leadership icons we have Nyerere, when we talk about digital product we talk about MoMo). On the grown peoples internets (LinkedIn) there is the insightful musings of Ricky Boshe and Firas Ahmad which I highly recommend. I feel left out and thought I would throw my two cents into the wishing well.
When it comes to my perspective (and that of inalipa) to e-commerce we actually see the ‘e’ as a misnomer.
“inalipa™ is in the business of commerce for Africa 2.0. We believe to truly achieve our middle class awakening and to increase the market for goods you need to enable every step of the retail value chain. We provide solutions to distributors, manufacturers, retailers and micro-retailers all within an integrated ecosystem of products. We’ve dropped the ‘e’ from ‘e-commerce’ as we believe it is redundant. For Africa 2.0 all commerce will be sustained by digital tools.”
When you look at the retail sector within Tanzania and the fragmented data that exists the one thing that is apparent is that retail is primarily informal and the typical consumer journey is reinforced by Social Ties, Peer referrals and Point-of-sale accessibility over product accessibility. Of course this is a generalisation and there is a growing segment of consumers driven by brand affinity, product quality and the aspiration of a premium retail experience. That said, I strongly believe that the key to unlocking online commerce in Tanzania is through recognising that in an industry where retail is informal it is counter-intuitive to adopt copy and paste marketplace models from the rest of the world and expect success beyond the Dar Peninsulans.
Without going down a rabbit hole — it is essential to recognise that every B is also a C in the B2B/B2C dichotomy and that success is driven by recognising the ecosystem needs to generate value and not any one single actor within it.
How are we starting to do this?
- Demand Generation at the Supplier level
- Instant, digital customer payments (anyone still doing Cash on Delivery does not have an eye on the long-game and that behavioural change is vital)
- TRA Integration to ensure all sales are instantly upgraded to formal status.
- Logistics infrastructure that we’re laying out as a benchmark for the wider ecosystem of fulfilment partners rather than adopting their inefficiencies.
- High-frequency customer contact to build customer trust.
We’ve had a very keen eye on the data and metrics since our soft launch on April 21st and have made some profound discoveries:
- Conversion rates are above global averages.
- Cart abandonment can be reversed through customer contact.
- The delivery footprint that has the highest demand of premium range product is outside the widely catered areas (Masaki, Msasani, Mikocheni, Upanga, CBD, Mbezi) and is actually within areas that are typically seen as ‘mainstream’ (Tabata, Goba, Vikindu, Tandale).
Where we are is at a watershed moment — there has been a proliferation of e-commerce platforms over the past 4 months. This only helps to broaden customer awareness and change retail behaviour. Some of these platforms are treading the thin line of legality, a few are B2B focused, others are leveraging existing retail brands and I believe many more are in incubation. What all of us must remember though is this isn’t new. InstaMerchants have been laying the foundation of B2C online commerce for years. Before them classifieds and the dalali network were driving product curation. I believe there is a lot of room for many players to succeed but also more room for the bulk to fail if the vectors of retail consumption in the informal trade are not adopted and the barriers refined.
I wish we had some concrete validated statistics available, however, from our inferred research this is what we see today:
That means— 75% of the total market is ripe to be enabled through a well structured ecosystem rather than destroyed and competed with. Value creation needs to be cognisant of a diverse array of actors. I’m excited about the next few years and see how this story plays out. Does it become a new narrative on how we have managed to once again demonstrate deep sectoral change through technology? Are we going to see the revamp of logistics infrastructure, POS solutions, consumer behaviour and the rails that will make us a sophisticated retail market? Will consumer demand through new channels be a catalyst in driving domestic production and the missing link in encouraging local industries and manufacturing?
I think yes and I will try and keep you updated on our role and journey through this (while also sharing my other distractions).
Feel free to disagree, call BS, critique or validate anything I’ve said. Like I said earlier, I’m just a dilettante.
