November 22, 2018, is an unforgettable day for shoppers. By midnight, Lugogo shopping mall was overcrowded. Once the door at Game Uganda opened, shoppers pushed and shoved each other just to get to the supermarket shelves. Those who failed to stay up late, woke up as early as 6a.m for what has now become popularly know as “Black Friday”.
This year’s announcements remind Ms Pamela Muhiirwa of the impatience with which she waited to return home with her goods in November.
“I bought a home theatre, cooker and refrigerator. The advantage was obviously the great discounts. But the disadvantage was that the queues were very long. We need more cashiers or they should partner with online retailers to reduce on the cues,” she says as she waits to take advantage of this year’s offers.
Black Friday has its origins in the United States of America, happening a day after Thanksgiving. The name of this major event first originated in Philadelphia and then spread across America. Back then, the term ‘Black Friday’ pointed towards how businesses used to do their accounting and fill in their books. This reference dates back to when companies moved from being in the red (making a loss) to being in the black (making a profit).
Black Friday invaded top Ugandan stores more than two years ago and is steadily gaining traction. It commences the long anticipated Christmas spending period in November and it includes “huge” discounts from retailers. Twelve days ago, this sales bonanza returned to get consumers to spend their yearlong earnings.
Over the years, changes have been registered in terms of opening hours. Stores say they have moved from opening at 6a.m on Friday to midnight on Thursday because of the overwhelming turn up of shoppers. Today, buyers are prepared for weeks and sellers are mobilised to bring quality product ranges at attractive prices.
Retailers say they are opting for Black Friday every year to maximise sales and hit their annual revenue projections. It is a time to experience the biggest share of new customers.
“This Black Friday sale is our biggest sale of the year so we are expecting to triple not just sales but also customer acquisition,” Jumia Uganda’s head of public relations Samantha Abaho says.
It is also seen as a way to create alternative revenue streams for vendors. That also means something for the economy.
Last year, Jumia Uganda reckoned that business activity from its sale would add Shs17.5b into the economy. This year, shoppers are expected to exchange their cash for 1.4 million products from one online retailer alone.
The cheaper goods?
Retailers are using past experiences to avail deals on specific products. For instance, phones and home appliances are most popular among customers, retailers say.
This year, there are many deals on televisions, smartphones, home appliances, alcoholic beverages, soft drinks, groceries and fashion among other things. But are these products actually cheaper?
For example this November 15, a Hisense 50 smart television was advertised online for Shs2,299,000 whereas in the market, it can go for as low as Shs1,950,000.
A Phillips blender with one grinder was advertised online at Shs300,000 but costs at least Shs150,000 on the market.
The Tecno Camon 11 Pro was advertised for Shs820,000, with a 32 per cent discount online but costs Shs859,000 on the market.
A Samsung 230 litre single fridge door refrigerator was advertised online at Shs1.26m after a 3 per cent discount and costs Shs1.3m on the market.
Groceries such as a kilogramme of sugar cost Shs4,000 on the market. This was slashed to Shs3,300 in online sales.
With sales expected to rise, analysts share mixed feelings about this shopping frenzy. Retailers expect a change in the way people spend but the response from shoppers is viewed as an indication of a bigger problem.
“The country here is a very low wage economy and people do not have money to buy goods and services so when such opportunities come, people grab it. What we need is not such onetime discounts but the increase in household incomes so that we have sustained ability to purchase goods,” senior economist Augustus Nuwagaba says.
On the other hand, he believes it is a good practice for both retailers and consumers.
“It is good if you can suspend consumption and buy cheaper at a later time. But in terms of sustained household incomes, it is not good that all the money is spent, even on things one does not need because they have seen black Friday deals. They have to find a balance,” Mr Nuwagaba says.
Mr Henry Richard Kimera is a team leader at Consumer Education Trust. He has received invitations to participate in Black Friday but will only partake if anything catches his eye, he says. He argues that Black Friday deals could stir indebtedness among people who do not have ready cash but want to purchase discounted goods.
Nevertheless, he believes the concept is good as long as goods sold are genuine and offer consumers value for money.
“Globally, products are discounted if there is a promotion. Discounting products does not mean poor quality. The most important thing is to know what makes a product of good quality. If someone gives you a warranty, guarantee and a return policy, those are some of the things that give you some confidence in a product,” Mr Kimera says.
To ensure whether the products are actually cheaper than at other times of the year, he says consumers can only make an informed decision if they do a comparison of prices of discounted goods with prices of goods on the open market.
“When companies do discount sales, they use advantage of buying in bulk and there could be times when the producer of the goods gives them on credit. If they have their projections and think that during Black Friday they might sell over 1million units, they can reduce the price and mark up with a number of items to make a profit,” Mr Kimera says.
E-commerce on the rise
Jumia confirms existence of demand for goods sold online because of the convenience with which they order and receive their offers.
“The intense promotion of Black Friday acts as a catalyst for driving more businesses and consumers online. By creating awareness for the benefits of online shopping, Black Friday is also supercharging the growth of online business overall. We see that now many other Ugandan businesses are celebrating Black Friday too. Indeed, the challenge for all online businesses is to win the trust of consumers,” Ms Abaho says.
Analysts of this trend are now asking consumers to ensure they know that the company will respect and protect their privacy.
“There should be consumer data privacy where they guarantee to protect your data so that not everyone can see the information you have shared. We put in our telephone numbers, no one should get to know them because out of that, database can be hacked and out information used for telemarketing,” Mr Kimera says.