Will emerging online marketplaces survive?

It has been seven months since Zoctu app became available to Ugandan users. When its founder Jackson Mugisa thought about the state of employment especially among youth, he thought more broadly about what he could do to alleviate the problem.
“If we cannot provide adequate full time employment for the youth, then we can provide ad hoc employment by getting to the public and small and medium enterprises that might not be in position to provide full time employment, to instead hire temporarily for completion of certain tasks and pay up,” Mugisa explains the inspiration behind the online platform that caters to services of plumbers, photographers, graphic artists among hundreds of job categories.

Solving problems
Take for instance, a mother whose child is suffering from a minor ailment. Mugisa’s idea is that instead of driving kilometres to the hospital, a click on the app enables this mother to get a nurse in the neighbourhood to treat the child.
From ordering food from hotel based restaurants, drinks from major distributors, construction items from neighbouring hardware stores, ordering groceries from markets and supermarkets to retailers, ordering goods from importers and wholesalers, the on-demand services platform is stepping into a territory commanded by Jumia, Uber, Safe Boda, Kiku among other e-commerce market players. Users can order rides across the country or rent out their boda bodas, trucks or vehicles on a short term basis for a fee.

With subscribers slightly above 20,000, Zoctu notes that it is now participating heavily, especially as regards home deliveries of essential goods. Mugisa says orders range between150 to 200 a day.
“Before Covid-19, our focus was primarily on the transportation sector. That has literally disappeared due to lockdown. What is active is deliveries,” he says without ignoring current challenges such as having to work with fewer employees amidst this new kind of demand.

Online platforms take shape
It is not only Zoctu’s services that are becoming more important in times like these. The Covid-19 pandemic has frozen physical business operations and the flexible ones have quickly positioned themselves to thrive through online platforms. Those who love to order food, you have certainly seen Café Javas announce its app. The platforms have become creative about it, offering free deliveries to customers.
In the past, similar businesses have emerged in the e-commerce market and disappeared. Remember the heavily advertised OLX that once connected buyers to sellers? Mugisa says the key to survival is the business’ strategy.

“It is about the strategic partnerships that you put together and as long as you find a niche. This is about on-demand services and how people get jobs, especially because there might be a significant loss of jobs post the pandemic,” he says adding that the comprehensiveness of the platform gives it an edge in the market.
Newton Karera is co-founder of Kafeero Foundation, a social enterprise that accelerates the digital strategy of businesses among other things. This is a good time for entrepreneurs to redefine what the country should be in terms of business and technology, he says.

Online businesses make their mark
This is a good time for online platforms to make their impact known to ordinary downtown traders. More than ever, it is said companies must invest in the digital space either today or tomorrow. They do not need to know the perfect platform but start with the one they believe in and keep improving it overtime. Older players have already invested heavily in their infrastructure and the same will have to be for newer ones.

“They need to use a freemium model of business that allows them to have customers than just cash immediately. Everyone is moving online and the best thing is to reposition what we do. Realise that the number one objective is not profit maximisation in the short term but it comes with time,” Karera advises.
“Definitely, customers will choose the new platforms too. Those coming up may not work at the rate of the old ones in a day but will build a takeover along the way.”
He points to Safeboda and Uber. Uber made its mark enabling users to order rides using vehicles. Safeboda arrived and has made its mark, tending to simpler transport needs.

He says, “The aim is not to necessarily compete with existing brands, but to redefine what that industry can do. Someone who is going to rival Jumia, must have something speaking to the needs of the local community.”
There are other ways around surviving in a market others have thrived in or abandoned.
Elijah Kitaka is co-founder at Fezah, an app that enables artists to get booked to concerts and live events. He believes there is still room for several players and that failures of online marketplaces in the past were due to slow adoption on the demand end.

E-commerce on the rise
Now that consumers are limited in terms of choice, he believes this will accelerate demand for services. What he has seen since lockdown is the emergence of new marketplaces as well as direct e-commerce adoption from vendors especially supermarkets and restaurants.
“These have now bypassed marketplaces like Jumia and have directly connected with the customer to meet their needs. I think a big number will survive because of proximity to the customer and the turnaround time for deliveries. I live in Lubowa, an order that I make from Quality supermarket in Lubowa is likely to be delivered much faster than one I make off Jumia,” Kitaka explains.

But to survive, they will have to do a lot more with the biggest issue as earning customer trust. They will have to work extra hard not to erode it in any way.
“Once an online customer moves away from you, it is very difficult to win them back. Trust is earned by keeping your word repeatedly. Now is not the time to over promise and under deliver. Do not promise what you cannot do,” Kitaka finishes off.

Trends shaping consumer behaviour
Contactless is here to Stay. According to a Consumer polling by Mastercard, a significant majority of consumers turned to contactless card payments for necessary purchases.
This shift in consumer behaviour is particularly clear at checkout, as people express a desire for contactless and voice concerns over cleanliness and safety at the point of sale, according to the new Mastercard study
Therefore, we are in a sustained period in which consumers are making purchases in a very focused way; it’s reinforcing contactless use in markets where adoption is more mature, and it’s stimulating use in newer markets. This trend appears to be here to stay.

Statistics. Nearly two in three respondents (64 percent) confirmed that the pandemic has led them to use less cash, and 81 per cent said they will continue to use contactless post-pandemic.