The future of African digital marketplaces in the post-COVID-19 era

Note: as an alumnus and current Accelerator member of the Entrepreneurs Organisation - Kenya and was pleased to have it published in Kenya's The Standard newspaper. For more insights like this download my 2021 Trend Report.

COVID-19 opened an opportunity that forced many to adopt and experiment with new behaviours such as ordering online for food, drinks, errands, and more. For years, Nendo has been keeping close tabs on several types of online entrepreneurs and the platforms they trade in.

These include gig economy contractors such as drivers for Uber, Bolt, Little Cabs, motorcycle, or bicycle riders for Glovo, Uber Eats, Jumia Food, Sendy, and 'do-for-me' apps for laundry, shopping, domestic work, and short-term gigs. We also track marketplace entrepreneurs trading in established peer-to-peer marketplaces such as the online classifieds websites Jiji or PigiaMe and those trading in B2B and B2C marketplaces such as car marketplace Cheki.

E-commerce vendors trade their wares as suppliers of Jumia, Kilimall, Sky Garden, Goby, or Avechi, to name a few. There has also been a steady rise of social media entrepreneurs, trading on Facebook marketplace, Twitter, Instagram shops, and WhatsApp for business. People are familiar with the large e-commerce companies because they keep top of mind by advertising on-and-offline. What does not change is their behaviour.

For instance, premium shops deliver great quality groceries. But it is no substitute for feeling and picking the fruit and vegetables by oneself or making small talk with the proprietor as you shop. However, online purchasing becomes acceptable after the upside is clear - time, convenience, and price. During the pandemic, e-commerce companies experienced a rise in new users even though order sizes were smaller owing to lower disposable incomes. It is said that poor cybersecurity is impeding the growth of e-commerce in Kenya.

Security as a concept comes more from the fact that there is cash-on-delivery in Kenya, mostly done via M-Pesa. E-commerce is about growing trust. Customer satisfaction is the hallmark of trust. You get what you ordered, and payment often follows this. Among e-commerce providers, there have not been many publicly disclosed instances of cybersecurity breaches. Because their payment processes are likely to be mobile money platforms with a predefined user journey that is hard, but not impossible, to intercept and interrupt.

E-commerce companies are spending millions of shillings in logistics to ensure that customers have a consistent and memorable experience with receiving their items. In terms of product discovery, e-commerce companies have helped surface specific products for purchase. They are also recommending bundles of complementary products. Besides advertising on and offline, companies are also investing in search engine optimization (SEO) for their websites to ensure that they build strong brands that can attract customers and prospects.

The pandemic made maintaining the trust factor more challenging as lockdowns and travel restrictions disrupted the supply of many goods from international sources such as China. In the services sector, businesses such as restaurants suffered lower revenues from walk-ins or online reservations owing to closures, reduced operating hours, and social distancing. Lower disposable incomes dragged down consumer demand even for home deliveries placed online. When rolling out digital solutions, many organisations overlook how easily their client base can access the internet.

Even the most tech-savvy Kenyans rely on prepaid data bundle plans. 4G connectivity is available countrywide, but a combination of price and lower disposable incomes impedes more access, more time spent online. Based on the concept of reverse billing of data, businesses can adopt solutions that allow their stakeholders to access the internet at no cost.

Banks could decide that nationwide there will be no data charges for accessing their websites. Removing the limitations of their prepaid bundles could encourage the banks' customers to utilise their online channels.

It could be that the Communications Authority one day asks banks to enable their customers to access online banking without having to use internet data. Much the same way that the Central Bank of Kenya mandated banks not to charge for moving money from bank accounts to M-Pesa. We do not expect this to happen soon, but it is a possibility.

All in all, COVID-19 has changed how we interact in the digital marketplace. It will be interesting to see how this will evolve in the coming years.