On the 16th of March we introduced Friday Deals, an experiment to explore the possible bottlenecks to a thriving e-commerce ecosystem in Zimbabwe. Here is what we learnt:
Online payments are not really a problem
This was more of confirmation to what we knew already. The biggest player in online payments between Limpopo and Zambezi is Paynow. They just didn’t attempt to clone Paypal, they really thought through and created a unique solution for Zimbabwe. Shoppers online can use Ecocash, Telecash, Visa, Mastercard, Vpayments. We hope One Wallet will be an option soon.
Paynow has built a brand that people can trust hence if you are a verified merchant, online shoppers trust that you will deliver whatever it is you are selling. If you are not verified, they trust that Paynow will keep their money in an escrow account until delivery. Trust is hugely important to the success of e-commerce no wonder Paypal is worth more than USD 57 billion.
A few months back, we ran into a merchant who thought they needed a biller code before they could accept online payments via ecocash. Paynow only requires you to have a bank account in Zimbabwe and you will receive payments from all the platforms available on Paynow. So, as far as payments were concerned, we did not have a problem with our Friday Deals experiment – almost.
The only challenge we had was when one customer elected to pay through a bank transfer. The problem with this is that it reduces automation quite much. Someone has to verify that indeed the transfer has been made. Zipit of course allows for instant transfers however, verification must still be done. Aside: we wish Zipit would make it possible to preview the transaction before you confirm it showing the name of the account to which you are transferring. This protects us from costly typos that will see one transfer money to the wrong account.
Choice of wares
Our experiment clearly showed us that the item to be sold clearly determines if people are going to buy online or not. We cannot say definitively what kind of wares work and what don’t but we clearly saw that the line between works and doesn’t work exists.
In our case, shoppers seemed to be more ready to buy items they had seen online before but did not know were available in Zim. They were more willing to buy ‘unique’ items like the Powercube and not generic ones like cell phones. This requires further investigation of course because so many things come into play when you consider consumer behavior for example price, time of month etc.
Logistics logistics logistics
As far as our experiment revealed, logistics remains the biggest impediment to the growth of a vibrant e-commerce economy in Zimbabwe. The biggest challenge is the cost.
To run this experiment, we were absorbing all the delivery cost and selling our wares at cost. Very early on we could see that it was really expensive to keep this up. DHL charges $5 for local deliveries of packages between 0-1 kg and Zimpost charges $4. This may seem like change but only until you want to buy a $5 item. The cost doubles at the snap of the delivery man’s finger.
We see great opportunity in this logistics space if only eyes be opened. Zimpost can be revitalised again without much increase in their spend just by rethinking their pricing models. We have engaged them on this and we hope they will take this opportunity seriously. Their thought has to move from thinking of ‘parcels’ as an added service to the ‘core business of LETTERS.’
The management of Zimpost acknowledges that they are the biggest logistics player in terms of the last mile reach in Zimbabwe. They can only come second to ZRP. They have to utilise this position otherwise the ZRP will take it up. Seriously, why wouldn’t the ZRP do it? They can just employ one more officer at every post and outpost to handle deliveries. Maybe they will raise enough money to motivate them to ease up on the road blocks. As much as the ZRP reputation is damaged at the moment, they still remain THE POLICE and so they can easily build up trust in the system. Watch out Zimpost.
Where from here?
The Friday Deals were really exciting for us and they gave our readers something to look forward to every weekend. The engagement was amazing and humbling at the same time. There is definitely value for us to explore here: for our readers/customers and ourselves. We are looking at this potential value closely and as soon as it makes sense to pursue particularly at the logistics end we will jump right back in with the Friday Deals.
We have suspended Friday Deals unless we get a petition with 1 000 signatures… 😉
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