More Industry InsightsUganda: How Ugandan Businesses Are Embracing E-Commerce

August 26, 2021by myles0
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The impact of COVID-19 and its containment measures has shifted the landscape of how trade can be conducted, a survey of several Ugandan businesses shows.

Interviews with several ICT and leaders in trade shows that businesses today are seizing every opportunity provided by digital technology and innovation to offer enormous products that drive economic growth and business development.

It gets clearer by the day that that future of commerce through E-Commerce has massive potential to create major shifts in cross border trade or exports and imports, widen markets, and enhance competitiveness of businesses and efficiency in delivery of goods and services locally and internationally. It also has the ability to cause the emergence of new business models and removal of some traditional intermediaries while introducing other intermediaries that suit the online marketplace.

A quick look at several sectors shows that the prevailing pandemic only emphasizes that the business world must quickly adapt to e-commerce. While the electronic sale of goods still represents only a small fraction of economic activity, the use of internet and digital innovation seems to be the unlimited possibilities–as both a conduit and a disrupter of business. These are all great strides in embracing the progression of commerce in the 4th industrial revolution.

James Odomel, the Communications and Public Relations Officer of the Uganda National Chamber of Commerce and Industry (UNCCI) says while the pandemic has provided a good opportunity for businesses to integrate technology into their day-to-day transaction, its impact has limited trade, commercial transactions thus rendering a lot of businesses incapable of operating.

To repair the damage to the economy, Odomel recommends that the government provide incentives to businesses in the form of tax holidays, business reliefs and loans at favorable lending rates. In addition to government efforts, Odomel advises the youth to embrace vocational creative jobs and innovate around the financial sector because emerging trends like the Oil & gas sector, present novel opportunities to tap into.

The Ugandan e-commerce scene is a fast-growing startup that is providing solutions to wholesale and retail traders. Founded by a group of young entrepreneurs in 2019, Kikuubo Online has managed to garner 7000 to 10000 users a month on the e-commerce platform in a space of two years.

Paul Muyobo the marketing manager of Kikuubo Online says, their innovation was born after observing the difficulty many traders in remote areas of Kampala and surrounding areas were experiencing in restocking their merchandise during the peak of the lockdown. The stock uncertainty provided market shocks and price increment in areas that did not receive new stocks in time.

“We decided to build an online platform that address this challenge. Our innovation operates on the iOS and Android mobile application, a website and a toll-free number. We have a catalogue of 3600 items to choose from for traders plus a network of transportation to deliver the goods, all one has to do is contact us electronically” Muyobo said.

Adding with a fleet of Tuk-Tuks, boda-bodas, vans and trucks, we are able to serve businesses in Kampala, Mukono, Wakiso and Entebbe.

According to Muyobo, the Kikuubo online Innovation has been embraced but not without challenge. The digital divide especially for traders who are in the lower-income bracket and don’t own smartphones has presented lots of challenges. Also, the high cost of the internet has made it expensive for people to operate online. The company has tried to remedy this with a team that moves physically from trader to trader, raising awareness of how to utilize the App Kikuubo online with and without a smartphone.

Nonetheless, Kikuubo Online still celebrates its wins as a fast-growing indigenous e-commerce platform that has become a go-to place for traders.

While Kikuubo Online is an indigenous startup making strides in the e-commerce scene, DHL Express is a global leader in the logistics industry that provides international shipping, courier services and transportation.

The Managing director of DHL Express international Uganda Ltd, Joseph Odole says that in this context of online trade where people find everything they like on the internet, DHL solves the problem of delivering these items to the customer. While DHL is a well-established player internationally, it has met with similar challenges that are experienced by any player in the Ugandan market.

“Uganda has a low internet penetration and high internet costs which makes the adoption of e-commerce difficult. Also, the ecosystem has an insufficient number of Fin-Tech companies to help customers purchase or ship products online as well as finding Fin-Techs that can enable cross-border purchases is difficult” Odole said

Owing to the insufficient information on cross border regulations, Odole says that there is a fear of unknown tax barriers and regulatory frameworks. This, he says, eventually leads to limitations on engaging fully in e-commerce. As a remedy, Odole advises entrepreneurs to acquaint themselves with the choice of destination they are exporting goods, know the target market, trade policies and whether they meet the standards of that country.

To ensure the success of e-commerce for those starting out, DHL offers a holistic induction to entrepreneurs who sign up for the service and render their support in how to best utilize their platforms through analytics in a way that informs their marketing budget. “If you set up a website, in order to priorities the marketing budget, DHL is able to help you know and guide your marketing based on the analytics.”

Recently, DHL partnered with Omwoleso Africa, an online marketplace for the creative and artisan tribe at MoTIV. In partnership Mastercard Foundation through the Young Africa Works strategy, MoTIV is training entrepreneurs to incorporate e-commerce, sell products online, and trade domestically and internationally.

Arnold Byarugaba, the Lead Small Micro, Small and Medium Enterprises (MSME) at Mastercard Foundation Uganda reiterates e-commerce has since given birth to the Digital Economy which is becoming a necessity and a catalyst for financial inclusion, youth employment, and economic development.

“This is a priority area under the Mastercard Foundation Young Africa Works program. Locally, it continues to play an important role in making transactions convenient and cheaper by offering a platform to increase reach to markets beyond our borders. It also has the potential to develop brands by providing a feedback mechanism that allows for quality advancements and sales. To make it possible, this requires a strong ecosystem that responds and innovates around skilling, markets, and financing.” Byarugaba adds.

The Innovation Village strives to create an enabling environment for young innovators who are doing their bit to expand e-commerce across the country.

“We have created an enabling environment that supports entrepreneurs with funding, mentorship, skilling and providing digital markets to entities that are leveraging technology to solve critical problems in agriculture, health, education, tourism, media, supply chain, energy, finance and manufacturing” said Japheth Kawanguzi, Team Lead at The Innovation Village.

Read the original article on Independent (Kampala).

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