Mugume: Online business is my lifestyle

Having tried his hand at a number of businesses including a print magazine known as Techzine, which lasted one year, Collins Mugume says he finally found one thing that suites his lifestyle; an online business.

Together with a friend of his David Madra, Mugume started Meka, an online platform that enables vendors and sellers have online stores without having to change their daily routine. The virtual business platform gives people an opportunity to purchase items from a variety of online stores without leaving their abode.

Explaining how he came up with the idea, Mugume says, “Meka was a result of an old business idea called Roadrunner. Roadrunner gave people an opportunity to order for goods on phone and have them delivered at their doorstep. Roadrunner was more like a test run because shortly after, the Meka idea hit me.”

Currently run by a team of five including two developers and three marketing and support staff, Meka is an online product of an Information Technology company called Binary Logic.

A pilot run of Meka was done in October 2012 when it signed up more than 300 vendors, half of whom are active to date.

Like a Ugandan amazon.com of sorts, the Meka website has a cart for a customer to order for desired items.

“Once goods are ordered for, we notify the vendor by email or phone to prepare the item for delivery. We then call the client to inform them on how long delivery of the item will take,” explains Mugume.

Apart from having an order tracking sytem, Meka also has a contract with Aramex, an international distribution company that picks items ordered for from the vendor to the client.

Mugume says one does not need much to start an online business but discloses the co-founders have spent $25,000 (about Shs63 million) on maintaining the website.

“We have raised this money from family and friends,” he says.

As a company that depends on commission charged on every item sold by vendors through Meka, Mugume recalls their biggest commission to have been a 15 percent commission earned on their first order for an HTC, one costing Shs1.4 million.

After this first successful order came a second for a Samsung galaxy duos by one Brenda who accidentally stumbled upon Meka website. To this, Mugume says, “This showed us Meka had great potential.”

Making almost a year, Meka has been among the top 10 finalists in the enterprise category, at three different high profile demos in Africa namely: Demo Africa 2012 in Nairobi, Startup World in Kigali and Pivot East held at Sheraton Kampala Hotel in Uganda.

Challenges
Operating in a developing country like Uganda and being a business reliant upon internet, Mugume and his team face a number of challenges. With their first challenge being lack of a mode of payment in Uganda, Mugume says most Ugandans do not understand how credit and debit cards work. However, customers currently pay for items through mobile money.

Secondly, a number of vendors in Uganda do not have access to internet, implying they cannot consistently update their online stores.

Thirdly, people do not have trust in purchasing goods online. “It is for this reason that the company registers only officially registered vendors. We also have a return policy to boost people’s trust in the company,” Mugume says.

Mugume praises Aramex for their ability to take care of the delivery ably well for the fact that they know how to trace client’s physical addresses.

What keeps Meka afloat?
Mugume says Meka has kept in business by ensuring clients get exactly what they see on the website and being available. According to Mugume, availability in this business means someone being online round the clock responding to clients’ inquiries. “I personally spend 20 hours online daily,” he says.

In a week, Meka has about one or two purchases whose commission depends on how big the order is. For example, they can earn Shs25,000 commission on wine. “Our profits and commission earned vary depending on the items ordered,” he says.
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Blu Flamingo’s Seanice Kacungira talks about running an online business

Despite there being several online businesses in Uganda, Kacungira says there are very few purely online businesses in the country. She says an online business implies your shop is online. Without internet, it does not exist. One cannot have an online business without a website or blog.

“It is best for one to start an online business with back ground knowledge in Information Technology. For example you love blogging or you are really passionate about the idea,” says Kacungira.

Essential requirements
“Depending on one’s resources, starting an online business could cost approximately Shs3m, which one would spend on having the essentials: a laptop, internet, camera, a basic blog designer and the delivery support staff. We are not yet at the level of amazon.com,” says Kacungira.

Having a strategy and setting goals for the online business then finding the right audience and giving them something of exceptional quality also sets one on the path to a successful online business.

Determining factors
Kacungira says content is key online because people have a wide variety of choices.

Relevance, creativity and innovation is the way to a successful online business. Kacungira says: “Working hard to improve the website is a must because one is not only competing with Stella the shop owner down the road but with Mr and Ms White in Orlando, USA.”

Kacungira says people rarely want to ask for advice yet asking people what they think of one’s website helps one have essential feedback.

Important principles
Consistency: “If you are going to update your page once a month, you are going to lose cash,” says Kacungira. One should update their websites daily and spend most of their time online answering customer’s questions instantly. Utilising feedback and rectifying a complaint or problem instantly or within a few days, increases client loyalty and satisfaction. “There is no set period for an online business to pick up because some people are lucky, have relevance while some have learnt from past experiences.”

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