E-Commerce Takes Root in Uganda

They come with all forms of offers: a fast food joint ready to deliver lunch to your work station a cab firm ready to pick you when it’s pouring or help to sell your second-hand TV on their platform.

Welcome to Uganda’s online market, one of the fastest-moving trends in the country today. OLX is the latest firm to enter the market, with the company signing up celebrities to endorse its platform. Last week, the online trading firm, officially announced its entry into Uganda, where it unveiled a free portal for buying and selling all sorts of goods.

“OLX has seen tremendous success in the countries in which we are present. Kenya is on the lead with 98 per cent brand awareness, meaning almost everybody knows OLX and can tell you what it is about. This is the kind of response we hope and know we will get from Uganda,” Thomas Platenga, OLX Kenya’s country manager, said in a statement.

Uganda is the third market in East Africa to launch OLX after Kenya and Tanzania. But OLX is not entering a blank market. A host of firms are already experimenting in Uganda. Kaymu, another online trading firm, says anyone can order for a product on its platform and have it delivered anywhere in Kampala within five days. It charges Shs 2,000 for delivery.

Jumia, which describes itself “as the most trusted online store in Africa”, sells itself as “your saviour from infuriating traffic jam in town. In a statement, the company noted: “With increasing traffic jams and packed shopping malls, Jumia is changing the way Ugandans shop… ”

Anamaya Bajpai, the manager of Jumia Uganda, said: “The beauty of our online shop is that you can order anything and have it delivered directly to you in time for the holidays without ever leaving your home.”

And there are many more firms looking to tap the exposure that the internet comes with – from real estate to trading cars, to job recruitment firms.

But is online shopping in Uganda sustainable?

It is not the first time that online shopping platforms have been launched in Uganda. More than seven years ago, websites such as Akatale.com were launched, where Ugandans could buy and sell anything. Such websites, however, were launched during a period where social media was non-existent, and could buckle under the aggressive pressure that the new firms such as OLX have come with.

Albert Mucunguzi, the founder and managing director of PC Tech Uganda, an IT firm, said while there was progress, many Ugandans still did not trust online firms quite a number still prefer to shop the traditional way of going to town physically.

“Some of these firms are not selling legitimate products. You order for a product, but they deliver a ridiculous one. This actually discredits some of these firms,” he said.

Mucunguzi is also not impressed with the way the firms respond to orders. They are rather sluggish, he said.

“Recently I ordered for lunch online at one of the fast food joints. I called them 30 minutes later and they said ‘are you sure you sent your order?’ This was unserious.”

But he also has more worries with the number of Ugandans using internet. Out of the 35.9 million Ugandans, less than 10 million can access internet. And many of those who have access to internet would rather update their Facebook statuses than transact business.

“The big percentage is on Facebook,” he said.

Uganda Communications Commission (UCC) says as of June 2014, Ugandans with access to the internet had reached 8.5m, up from 6.4m in June last year. Another challenge is that firms which are not locally based, demand for payment before delivery. A very tiny number of Ugandans use visa cards.

There is hope, though, that as many firms come in, Ugandans can slowly shift to using internet for shopping.

Source : The Observer

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