In recent months, we have been seeing the shift in companies from cash sales to the trendy electronic and online platforms. Some of the most unlikely “traditional” corporate are showing an interest in these “new age systems”.
A list of companies recently adopted this strategy to try and boost sales by tapping into online payments. Rainbow tourism launched a platform through which they auction rooms and bids are made online. ABC Auctions launched their own version of online auctions. Unlikely candidates like Mambo Press are also making a presence and Telone seems to have duplicated the Topup platform with their Telpay online payments.
The latest in the line of companies adopting this stance is the Bata Shoe Company which announced that it would be launching an online platform and complimenting it with a home delivery system.
Are we finally seeing the start of a huge shift into online payments and mobile payments in Zimbabwe?
We talked to Vusi Ndebele, Webdev’s Sales & Operations Director and Co-founder of Paynow and Topup on these developments in Zimbabwean e-commerce.
- Is this the dawn of payments in a realistic sense or is it more of an image stance by companies?
I think the age of online payments has truly arrived in Zimbabwe. Consumers in Zimbabwe, like elsewhere in the world also want convenience and value for money. That said, achieving mass market adoption is a journey and some business sectors are more ripe than others for online payments for a plethora of reasons. Our belief is supported by evidence that service/online bill payments will develop faster than the purchase of physical goods. This is largely because of the real-time nature of online service provisioning. If I want to buy my Telone/Powertel voucher, pay my DSTV, buy ZESA tokens, buy limited concert tickets, in all those cases delivery (activation, re-activation, ticket confirmation) is immediate. A consumer doesn’t need much convincing to realise that this is the most convenient and often most cost effective way of consuming services. This also is the most efficient way for Service Providers to render service because the process can be automated.
For physical goods retailers, the value proposition must also be clear to the consumer. How do you convince a consumer to make the purchase online and part with his money before they’ve had the opportunity to inspect the goods and when delivery isn’t immediate? This flies against the good judgement of the long suffering Zimbabwean consumer who has witnessed their fair share of scams and been routinely subjected to poor service delivery.
The retailer has to counter those very real disadvantages with some clear benefits of which the most compelling is cost saving. An online retailer must in fact overcompensate for removing the buyers traditional ‘comforts’. Delivery timescales and cost must be reasonable and the refund/exchange policy clear.
Because many of the new e-commerce ventures in Zimbabwe are operated by traditional retailers who have existing fixed costs and possibly a revenue base to protect, the online price tends to be the same or only marginally cheaper than in-store. Such a marginal saving is not sufficient to convince a skeptical consumer to ‘take the risk’ of purchasing online if the same item is readily available at retail outlets.
I think the moves being made some of the big brands regarding e-commerce are a good and necessary first step but there is much more to be done. Ironically, companies that are struggling for survival in this economy may in the best position to restructure their businesses for an e-commerce future.
Some of the International brands like Bata have a great deal of experience with e-commerce globally and even in the region and so it will be interesting to watch them adapt their strategy and execute in Zimbabwe.
2. What are we most likely to see in the coming few months?
I think we will see many more companies trying to improve convenience for their customers, making their organisations more efficient and improving their cashflow by accepting online bill payments. Private and public sector players are embracing the convenience of electronic bill payments. As a result, consumers will have a choice of channels to pay their regular bills through agency banking, mobile platforms and online. The days of driving around to pay your many service providers every month are finally coming to an end.
In the coming months, Paynow will also introduce additional payment channels to complement our current five (Visa, Mastercard, EcoCash, Telecash, Zimswitch). Paynow will continue to take advantage of any opportunity to expose the public to the convenience of online payments so you’ll see more of us partnering with consumer-facing businesses in the Insurance, Transport , Media & Entertainment sectors.
3. Is just launching an online platform sufficient, what else do companies need to do?
Clearly launching is not enough. We’ve seen businesses spend a huge amount of money developing e-commerce websites and haven’t done a single transaction. Consumers won’t be buying online for the novelty factor no matter how pretty the website is or how much you advertise it, if the proposition doesn’t satisfy a fundamental consumer want/need, the operator will struggle.
The e-commerce companies that manage to gain traction have a new set of challenges to deal with including fraud which happens even here in our young e-commerce market. The outside world knows that we are newcomers to internet based retail and we are a dollarized country so we are frequently targeted by fraudsters and criminal syndicates with varying levels of sophistication. We encourage businesses to stick as much to their core business as possible and partner with experts to deal with the specialized parts of the stack like payments.
4. Is there some of sort of convergence discussion in payments or is everyone going in their own direction (MasterCard, Paynow, Zimswitch, EcoCash etc)?
I can’t really talk of much convergence or interoperability with regard to the payment channels operators you mention but there is consensus that electronic payments is the future and all the banks and wallet operators are battling it out to capture or retain the primary financial relationship with the consumer. At Paynow, we continue to be agnostic to payment channel and strive to demystify electronic payments. Our business is to make it easier to pay and get paid.
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