Covid-19: Businesses better placed to win

Can six weeks make that much difference in a business’ life? Many business owners say one more day in operation would change their current balance sheet. Inside the nation’s busy towns, the Covid-19 crisis has taken its toll on commerce.
In a proactive stance, President Museveni slapped a month-long suspension on everything entertainment, causing a halt to business in bars, cinemas and sports centres. This was March 18, 2020. Businesses feeding off the education sector suffered the same fate as schools, universities and tertiary institutions closed.

Three days later, he returned to our television screens with a fine-tuned strategy to fight the virus’ spread. This time, the transport businesses got their first hit. All incoming passengers by air, land and water were prohibited for 32 days.

All business by public passenger vehicles such as taxis, buses, tricycles and Boda bodas was suspended. In markets, only food vendors received a licence to operate.

March 22 transformed life. A feverish 36-year-old man had landed that morning at Entebbe International Airport, having returned from a business trip in Dubai aboard Ethiopian Airlines. His nasal swab samples sent to Uganda Virus Institute for analysis read positive for Covid-19.

President Museveni issued fresh guidelines prohibiting transport by private vehicles and boda bodas. He ordered a halt to business in shopping malls, arcades, hardware shops, salons, garages and lodges.

Stores selling detergents, pharmaceuticals, agricultural and veterinary products remained the exception.

Telecoms, fuel stations, media companies and financial institutions were spared. Farms too. Factories and construction sites too, but only those that could arrange for workers to stay close or within the presmises for 14 days.

Without changing these measures, the president has extended the lockdown period to May 5, 2020 to study the situation longer. By his address on April 14, 54 people had tested positive out of 5,664 samples tested. Despite orders that screeched the wheels of many businesses, it is clear some are better placed to emerge winners in this crisis.

Local manufacturers
The president has been cognisant of the fact that some sectors are suffering including tourism, entertainment and sports. On the other hand, it is his view that the manufacturing sector would get a boost with the right actions in place.

The country’s $7b import bill is expected to decrease with local products taking centre stage in trade.

Uganda Manufacturers Association (UMA) executive director Daniel Birungi speaks of gains made in development of specific products including sanitisers, personal protective equipment for medics and facial masks.

“Within other areas, three weeks that we have been in lockdown is not a long enough period to judge mostly because if you look at our supply chain, it takes more than three weeks to get the raw materials here. As an association, we see a lot of member rejigging their production to cater for items previously unavailable locally,” Birungi says.

A number of people and agencies have also reached out to UMA to produce specific products previously imported and inaccessible because of the lockdown.

“This has also resulted in a bit of interest in locally manufactured goods. If you go to most supermarkets, a lot of the shelf space is slowly being taken over by Ugandan products, we have different capacity to produce quite a number of products we have been importing and I think this will give Ugandans an opportunity to check out products that have not been on their radar,” he explains.

Online businesses
Jumia Uganda managing director Ron Kawamara doesn’t exactly consider the business as a winner but subscribes to the idea that any business currently operating is better than a bar or hotel closed.

“Business is different,” Kawamara says. The online retailer is altering its commercial offers to fit the needs consumers are cashing in on.

“Customers are making sure they have things that enable them to survive, stay home and be safe which are food, medicine and cleaning supplies. They are not looking to buy the latest IPhone or a fridge. Many have lost their jobs and a big segment of consumers do not have the cash flow to enable them make large purchases beyond the essentials,” he says.

It is not all bleak for wholesalers prohibited from opening shop. The company has adjusted to holding its vendors’ stock in its warehouses to push sales up under lockdown.
“These are costly to do but necessary to serve vendors and customers,” Kawamara says. The online retailer has observed an increase in new users but believes it is too early to tell what impact this could have for future business.

“We do not know how long this pandemic will last or the impact on the economy. What we see is majority users come back and we anticipate that this will be the same,” he says.
SafeBoda co-founder Ricky Rapa Thomson predicts the company’s success based on what all winning businesses must do.

“Companies that are flexible, innovative, data driven and those that know where the world is moving to are the ones that will definitely survive the effects of Covid-19,” he says.

He strips down the details to innovating with the App users and 18,000 riders. With the lockdown, passenger rides are have stopped. The startup faces challenges raising funds and cannot grow certain segments of its business but admits to doing fairly well.

“We are majorly into delivery of groceries, medicine, cooked and uncooked food from markets. we charge for some deliveries, others are free,” he says.

The ride hailing App is focusing on delivery, something it had been testing.

“We were working slowly to understand it but now we have to move faster than we had planned,” Thomson says.
With this new venture, the ride hailing App is experiencing a growth in new users amidst the pandemic.

“There are so many new users trying the system as of today. Most of our old users are now making best use of the App, they were using it to order rides but now they can buy airtime or load money into their wallet and buy groceries riders deliver to their doorstep,” Thomson says.

Internet providers
Telecoms have experienced improvements in usage among customers during the pandemic as people stay indoors.

“It is not like many more people are using the internet. The people who were already using it are using it much more than before because they are working from home,” Wim Vanhelleputte, MTN Uganda chief executive officer, says.

He paints a mixed picture for the entire business. “Internet is about 20 per cent of our business, that 20 per cent is up. Internet is for the upper class and those still have money to purchase. But the voice and mobile money customers are affected by the reduction in purchasing power. Mobile money is down at least 30 per cent since lockdown.”

PayTV companies
Part of what has happened is that people spend most of their time at home and are in dire need of something to entertain them, as well as educate their children. This explains the changes in programming by PayTV companies. Without Sports content, it is making business sense to avail fitness content.

“In terms of market share, we have to wait a little longer to find out the result. In terms of boost in sales, there was a bit of a scramble as people hurried to make TV subscriptions. We have many customers who actually paid for three months yet they would normally pay for one month. There has been a growth in subscribers and we saw that at the end of March just as the stay home announcements came up,” Joan Semanda, public relations and communications manager Multichoice Uganda says.
She believes companies that quickly adapt to the changes caused by the pandemic are best placed to weather the storm. But also, international businesses like theirs stand a good chance.

“There is a lot of organisation in terms of looking at the world globally, predicting situations and what we can do to prepare. There were plans as we saw this come towards Uganda,” she says before delving into the sustainability of gains made in the crisis.

“We have content on TV but on our Apps, we see spikes in numbers of people downloading Apps so people can watch in separate spaces. We have scaled down on physical staff in customer care and I would like to think the pandemic will allow customers to do a lot of things on their own.”

Supermarkets sales rise on lockdown

They experienced sales similar to those on Black Friday when the Ministry of Health confirmed the first Covid-19 case. The only difference this time is there was a mad rush for groceries, detergents and other sanitary products especially in big chain supermarkets like Capital Shoppers and Shoprite.
Some supermarkets reported running out of stock as demand for certain products rose.

President Museveni has since categorised supermarkets as essential services in lockdown.

With more people staying home and unable to access big chain supermarkets in towns like Ntinda, Kamwokya or central business district by public and private transport, supermarkets in suburbs like are now enjoying the bigger share of sales in competition with small grocery shops.