The latest numbers from the Julisha ICT Survey report released early this week by the ICT Board, having been carried out by the International Data Corporation show that the online opportunity is growing with over 17 million internet users up from under 10 million only three years ago.
The value extraction from this online audience will obviously be from mobile and electronic commerce that has seen quite abit of activity over recent years, with the creation of marketplaces where users can buy and sell physical good to online directories where consumers can find contacts from validated businesses. Many have tried to get a piece of the action and many have fallen by the way side – both from well heeled initiatives and the bare bones startup ideas.
On the business directory front, Nation Media Group made an attempt to take its offline business directory online without much success, opting to partner instead with a third-party. Yellow pages I feel is yet to really stamp its authority in a space that they should have really been leaders in if they innovated right and got onto the mobile band wagon in good time. Mocality of the well oiled Naspers is shutting down. This was one of the services that in my opinion was primed for success as the crowd sourcing model complete with reward system saw them grow what was arguably the most accurate small and medium sized business listing. SME’s drive the most business by volume hence why this approach made sense to me. What I did not agree with were the numerous freebies that were given to these very same businesses, who I believe should at some level pay for value received; whose premium while minimal would make bottom-line sense for Mocality based on the possible volumes.
The online shops with physical product sells have also been around; most prominent by virtue of marketing spend was Kalahari, yet another attempt from the Naspers stable who closed shop in multiple African markets in late 2011. Rocket Internet, a online business incubator brainchild of the Samwer brothers who have cemented themselves as master cloners are making entry into the Kenyan market with Jumia, after tackling the South African market with Zando – which recently announced having reached 10 million consumers.
While there is clearly a market, I am keen to see how these new entrants will tackle issues such as; the lack of proper address systems – which makes logistics a nightmare, true value proposition on prices offered, warehousing or other storage model and of course the return on investment being privy to some of the investments made into some of the initiatives.
In the end, the consumer stands to benefit from successful implementations of online commerce, so all the best to those taking the dive.