Back in December 2010, when the eCommerce opportunity in Zimbabwe was all but invisible, a startup launched with a name all too obvious – zimazon.co.zw. They were going to be the Amazon.com of Zimbabwe and the market not being ready with things like payment systems wasn’t going to stop them. Their bet was on cash on delivery and bank transfers, and ordering from offshore after customers order online locally.
How did that go? We interviewed the company’s Operations lead, Alex Grujicic and below is what he shared with us.
What has been you experience running an eCommerce company in Zimbabwe so far?
In a word… “uphill!”. We always believed that eCommerce was an ideal solution for Zimbabwe, but like anything new, it has taken some time to grow. A large part of our working day is spent helping customers understand what eCommerce is, and how to use it.
What have been the major challenges?
The list is long! As the first ever eCommerce site in the country, we did not just face the traditional start up headaches, but also had to contend with a non-eCommerce-friendly customer base. Our vision was always “massive variety at a reasonable price”. At first a lot of customers told us that we were expensive, and that even though they could not get the product anywhere else, they could not justify the cost. Our markups vary from 10 to 15% of the purchase price in America (not the landed price) – that is a relatively tiny margin and includes local delivery to your door. Add duty, airfreight, VAT and the likes onto that and a product quickly costs a lot more than what it would cost if you purchased it in the USA.
Interestingly, we are finding now that customers are starting to tell us that we are the cheapest – especially for the higher end products. Another issue we faced at a technical level was managing and maintaining the tens of thousands of products that we have on the site. We had to develop an extremely complex site management platform but this is now working well.
When Zimazon started it was the only visible eCommerce company operating in Zimbabwe and targeting Zimbabweans. A few more have emerged especially in 2013. How do you stand out as a player as more people are seeing and attempting the eCommerce opportunity?
We welcome the competition. We know our prices cannot be beaten (legally)… and we believe that the single most important progression for Zimbabwe on eCommerce is for the merchants and customers to start using it at a mass scale. We do not want to dominate the playing field, just to play!
Also, our model is unique in Zimbabwe and having more e-commerce will make people use more e-commerce.
How competitive are you against brick and mortar businesses like Goldtech Electronics, City Mobile, Mobile City, iClik, CellOne, Econet etc… What are your major differentiators besides being an online store?
It depends on the product. Zimazon differentiates itself through massive variety. We do not bulk buy anything, and so if a company focusses on a small product range that they push in numbers, they will be hard to beat.. But at Zimazon you know you will be able to get exactly the item you want.
At one point (or maybe it still is) Zimazon would source the products from international markets like the US after customers had placed orders, which we’re guessing would increase the time of delivery significantly? If this is still so, are there any plans to supply from a local warehouse and what would be the likely impact to the business besides just early deliveries?
All Zimazon products are still based on www.amazon.com in the USA. This does mean a delay from point of order to delivery to your door… We do store stock of some of the more popular goods, but as a rule people come to Zimazon for two main reasons: 1) variety 2) unbeatable prices on higher end products, especially items attracting lower duties like laptops and tablets.
Have the online payment options been a big opportunity for you or you find people still prefer COD to paying online?
We stopped our “cash on delivery” some time back. Too many customers were making orders and not honouring them. We integrated to V-payments about a year ago – I believe we were the first online – but uptake has been slow as the platform has only now completed its pilot period. We are introducing Visa in the next few weeks, which will hopefully open up the diaspora..
Your outlook for 2014?