Online Business

The Blurb: The future of e-commerce in Ghana lies in boosting internet penetration and infrastructural development, educating internet users to trust Ghanaian online market for purchases, and the sustainability of vendors' strategies. Click To Tweet

The United Nations Conference on Trade and Development (UNCTAD) recently released their 2018 B2C E-commerce Index, which measures an economy’s preparedness to support online shopping in 151 economies. The index comprises four indicators that are highly related to online shopping and for which there is wide country coverage:

  • Account ownership at a financial institution or with a mobile-money-service provider (% of population ages 15+)
  • Individuals using the Internet (% of the population)
  • Postal Reliability Index
  • Secure Internet servers (per 1 million people)

Of the ten African countries ranked in the publication, Ghana was placed in the sixth position –  with a ranking of 39.

As seen in the report, a competitive B2C e-commerce ecosystem appears to be enticing foreign investment. “Several of the top ten developing countries in the index saw inflows of foreign direct investment (FDI) into their e-commerce sectors in 2017, amounting to at least $1.7 billion. Venture capital is also attracted to favorable e-commerce environments. In Thailand, e-commerce companies were the largest recipients of the $106 million of such investment in the country in 2017.”

Although many African countries surpassed world growth on three of the indicators used in the index, it is estimated that only three countries (Nigeria, South Africa, and Kenya) accounted for almost half of the 21 million online shoppers in Africa as at the time of the publication. By the look of things, e-commerce readiness indicators across the continent are progressively improving but many e-commerce vendors still struggle to prove product-market-fit. Nigeria, ranked at the second position, was in the news recently for high profile cases of e-commerce business failure. “OLX, a popular classifieds platform backed by Naspers—Africa’s most valuable company, Efritin, an e-commerce platform for used goods, DealDey, an online discounts platform, and Careers24, an online jobs marketplace also backed by Naspers, have either scaled back operations significantly or shut down entirely.” Ghana is not left out of the e-commerce readiness “bittersweet” tales with some of its e-commerce household names still faltering. Yet, looking at the remarkable increase in disposable incomes of many Ghanaian families as well as the rate of internet and smartphone penetration, there’s every reason to believe that e-commerce is the future of doing business in Ghana.

Keys to building the future of B2C e-commerce in Ghana

The recent mobile money interoperability policy, digital addressing system initiative and government’s interventions to get Small and Medium Enterprises (SMEs) online has contributed to facilitating the ease of online transactions in the country. The Deputy Minister of Trade and Industry, Hon. Robert Ahomka-Lindsey stated at the 2018 Germany-Ghana Investors Forum that as part of the government of Ghana’s infrastructure development agenda for the ICT sector, the Ghana Post is set to be transformed into a competitive ICT enhanced service provider to help in connecting the underserved. When executed, this initiative will help to fast-track courier of purchased goods.

UNCTAD Top 10 African countries in the B2C E-Commerce Index

Nevertheless, to reach the full potentials of Ghana’s B2C e-commerce sector, the following pieces need to be put in place:

  • Reliability in the delivery of products

Like many African countries, trust deficit has hampered e-commerce business growth in Ghana. Poor customer relationship and uncertainty around receiving your orders or returning them, as the case may be, often make it difficult for customers to purchase online. Companies like Jumia Ghana have tried to solve this by introducing a “pay upon delivery” option but limitations still exist. Some people I spoke to about this issue admitted to using some of these e-commerce sites for price comparison purposes before heading to the mall or nearest market to make their purchases. Business owners need to find a way to bridge this gap and educate internet users to trust the Ghanaian online market for making purchases.

  • The high cost of data and fragmented infrastructure

Despite the commendable efforts made in connecting the unserved and underserved Ghanaian households to the internet, the cost of broadband data is still quite expensive for both business owners and consumers. In its Internet Affordability report, the Alliance for Affordable Internet expressed that Ghanaians spend an average of 3.89% of income on 1GB of data per month. Ghana’s top think-tank group, IMANI reflecting on the above information observed: “this clearly shows [the] internet is still not affordable to all income groups.” Clearly, more work needs to be done by “reducing the price of 800MHz spectrum to reflect the true market value,” increasing internet connectivity as well as investing in infrastructural developments to facilitate e-commerce transactions in Ghana.

  • Sustainable business model and funding

For the past year and a half, I’ve used Laundry Chief for all my laundry needs. The convenience of placing my orders online and having it picked from and delivered at home, on my timelines, makes it easy to plan such activities. As they begin to scale, they are establishing shops closer to their clients thereby complimenting online transactions with in-person services.

This allows them to target different types of clients and increase sales. Although their strategy might not be sustainable for all types of businesses, it shows a business progressively shifting gears to address the needs of its clients.

Surely, funding does play a part for companies looking to utilize this strategy or scale across borders. Nevertheless, any business that would withstand the market pressures today must, of necessity, have an “international agenda” as part of its business model.

To conclude, I think the best days are still ahead for e-commerce in Ghana. With a growing tech-savvy, digital natives and increasing demand for made-in-Ghana products and services, the possibilities for e-businesses are limitless. Essentially, the future of e-commerce in Ghana lies in: Boosting internet penetration and infrastructural development, educating existing internet users to trust Ghanaian online market for making purchases, and creating sustainable e-commerce business strategies.

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About the Author

Tom-Chris✨ #Readyforwork
Tom-Chris Emewulu is the President & Founder of SFAN. He is an education enthusiast, entrepreneurship and career coach, a consultant at Mastercard Foundation, Seedstars Ambassador for Ghana and an aspiring venture capitalist. He is a big believer in people and has trained hundreds of young entrepreneurs on how to find their purpose, actualize their goals and tell compelling stories about themselves and their work. Follow him on Twitter and LinkedIn.

A step-by-step guide to building for the next billion

You’ve probably heard that 90% of all internet startups fail within the first 120 days.

For May edition of #SFANLiveChat, we invited two entrepreneurs who have built remarkable online companies to share their insights on how to actually get it right.

Kojo Dougan is the Director of Interpay Africa, an electronic payment platform that makes transactions and e-commerce simpler, secure, and seamless, while Melissa McCoy is the Founder and CEO/CTO of ConnectMed, a South Africa and Kenya-based online Medicare company that helps patients access quality and faster/efficient healthcare.

The combination of their expertise served our agenda very much. Below are some of the thoughts from the chat that stood out to us:

1. Find a need and provide an epic solution

“You have to solve a problem that people actually have. But it’s not always a problem that they know they have, so that’s tricky.” — Joshua Schachter (creator of Del.ici.ous)

A lot of people who are beginning their entrepreneurial journey often focus on building a product or service before finding a market. Unfortunately, this is one major reason for the failure of many startups. But to improve your chances of success, Kojo says, identify a need and aim to provide a relevant solution to that need.

In most instances, you’ll need to do some research to understand where there are gaps in the market: listen to your frustration or those of people around you. Find out what people are complaining about.

When you have identified the market gap, then you’re set to dig a bit deeper:

  1. Why is the issue persistent?
  2. How do people currently solve this problem?
  3. What can you do better than the players on the ground?

The result of this research will help you create a solution that pays off. ‘”Paying off’ to me means that we’re positively affecting our patients’ lives — every time we do that, it’s worth it,” Melissa says.

2. Build your tribe

“If a tree falls in the forest and no one is there, does it still make a sound?” — Jehookah Jarmon, Gorvenstof, Ukraine.

You may have equally heard the clichéd phrase “build it and they won’t come.”Guess what, it’s true! Just because you’ve built something cool does not mean that customers will come to you by auto-pilot. To find people who are interested in what you’re offering, Melissa says, you need to do the legwork of identifying an already established market or a new one.

Depending on what your business is, the first thing to do in finding your users is to create a clear picture of who this hypothetical customer is. “We create user personas — young professionals, new parents, university students, and shift workers — that we developed through surveying.”

Position yourself as a customer, Kojo says, would you revisit several times? Would you be interested in making several purchases? Use the product again? “Observe, listen, monitor, personalize the solution; user experience is key.”

The art of copywriting

Whether you’re creating a new product for existing market like Apple or creating a new market like M-Pesa, you need to master the art of copywriting. “We use HubSpot to do A/B testing on emails to decide on the best copy,” Melissa says: We also create our own A/B tests with Facebook Ads to see what’s best.”

If you choose to create your own copy, this article by Henneke Duistermaat has valuable insights on how to nail it like Apple.

A great copy helps you highlight your value proposition and find your tribe.


3. Create a monetization strategy

“The single necessary and sufficient condition for a business is a paying customer.” — Disciplined Entrepreneurship: 24 Steps to A Successful Startup by Bill Aulet (2013)

Now that you’ve acquired an audience, you need a strategy to turn them into loyal customers and brand ambassadors.

To be able to convert your website visits into sales, it “must be informative, interactive, simplified and allows visitors to sign up or understand how to use your product/service,” Kojo advice.

At ConnectMed, Melissa and her team leverage analytics to understand their users and how to deliver better services. “We have a funnel (site visits > signup > consult) and use event track to quantify where users fall off and session record to qualify why.” She says: Basically, pick one metric (for us it’s consults booked) and then understand the funnel to get there and keep optimizing.

A word on pricing

In a previous chat, we looked at how you can price your product or service. Although the focus is on a different audience, it has valuable insights you can apply.

At Melissa’s ConnectMed, they started with a higher price point to ensure their product is perceived as quality and then offer a discount on the first one to try.

But at Interpay, Kojo says their strategy is influenced by market forces. “As we have progressed, we have passed on economies of scale to our merchants.”

4. Review and Refine

“Ideas don’t come out fully formed.” — Mark Zuckerberg

When you have implemented your model, always review what works and what doesn’t, Melissa says. “Try to listen to the committed users that love you for determining best-added features. Our product development has been iterative — we started with base telehealth platform and added features based on user feedback”

Kojo reiterates that as much as you want to acquire new clients, you must also pay attention to your existing clients. “Learn, learn, learn; know what’s trending and stay ahead of curve.”

Above the bottom line

You have some structure and process, then you’re ready to play in the big league.

It’s time to launch and scale your impact.

How to launch your product or service

  • Firstly, decide on the type of launch you want — either a stakeholder launch or a media launch.
  • Then you need to figure out your timelines, it’s always great to have enough time for pre-launch PR. Do not neglect the impact of influencer marketing; try to make your product available to key influencers in your industry for some great reviews/publicity.
  • If you don’t have an elaborate budget to do a massive stunt, get on with what you can do and start marketing. The launch date is for you to tell your audience that a new kid is in town!
  • Understand that it’s your job to create your press release; a lot of bloggers won’t have the time to edit or review it unless you’re paying for that service. Also, know when is a good time to submit your article to enhance the chance of it getting published. Aim for the local bloggers first as they’re the easiest to reach.
  • You’re the PR girl/boy of your brand; keep releasing fresh insights, products, and announcements to remain visible to your audience.

When you have something great going on, the city needs to hear about it, so make as much noise as you can about your work.

Achieving scale…

Once you’ve launched your product or service, it’s time to scale your work. Depending on what you’re offering, look for strategic partnerships that create better leverage. Partner with banks, MNOs, MTOs, FSPs, to provide a solution to end user, Kojo advice, “our business will not be where it is today without our partners. We have two categories: partners and merchants.”

Unleash the power of email marketing.

Experts have confirmed that email is the crown jewel of online marketing strategy.

According to McKinsey, Email marketing generates 40 times more revenue than Facebook and Twitter — combined! Actually, you are 6x more likely to get a click-through from an Email than from a tweet. Furthermore, Email marketing can generate an ROI of 3800% and $38 for every $1 spent.

To grow your mailing list, work with partners who you can incentivize to share their lists (e.g. every booked consult from a user on their list gets X KES), Melissa says. Also, you can table at events to get participants to subscribe to your list. “Finally, a pop-up CTA on the site that asks for email in return for the discount has worked well for us.”

The bottom line

Building a successful online business takes time and skill.

But like every skill, it can be learned. As we’ve established above, if you build it, they won’t come. So, your best bet is to: a). Find a need and provide a viable solution to it; b.) Build your market — find the people that need your offer; c.) Ensure you have a monetization plan; d.) Ensure your product development is iterative; e.) Launch and Scale

“Stay focused, don’t go alone; work with your team, get your team motivated, believe in your dream, believe in your team, be mentored, don’t wait for a perfect moment- just create it,” Kojo concludes.

We’re interested to know what you think about this subject and what has worked for you, please leave your thoughts in the comment. To stay in the loop on what’s going on at SFAN, subscribe here.

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