Traders feel the pinch  as consumers buy less

Friday December 25 2020
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Traders in down town Kampala. The purchasing power of consumers has reduced compared to the previous days without the pandemic. Photo/Eronie Kamukama

By Joanita Mbabazi

The Covid-19 pandemic has affected all sectors of the economy. More than ever, all chains of different sectors have been affected ranging from people losing their jobs as a result of companies downsizing their staff to meet operating costs. 

This, to some extent, has trickled down to the consumption behaviour among consumers too as many are adjusting their budgets to rhyme with the status quo.

According to Mr John Walugembe, the chief executive officer of Small and Medium Enterprises (SMEs), the pandemic has financially constrained consumers who have become very selective in what they purchase. 

“30 per cent of SMEs are still struggling. Even when most of them want to stay afloat and continue manufacturing merchandise, those consuming them are still very few.  About 25 per cent of these are still struggling with cash flows. To make matters worse, these have not been able to get financial support from financial institutions and stimulus packages from government,” Mr Walugembe says.
Embracing e-commerce 
Mr Walugembe adds that businesses that have invested in easing the lives of customers amidst this period of the pandemic have seen a growth trajectory in their business. 

“Technology has enabled these traders to continue reaping some cash,” he says. 

“People have become more innovative by designing websites and apps to access their customers. Gone and the days when people have to comfortably sit in their shops or businesses to wait for customers. People are more concerned about their welfare and trying as much as possible to social distance. But their purchasing power should not be affected either by tapping onto the e-commerce efficient digital platforms,” he says. 

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According to Samantha Abaho, the public relations officer Jumia Uganda, Covid-19 has reinforced consumers towards e-commerce which has provided a platform where they can access essential goods and services. 

“We are witnessing customers moving towards buying essential items online almost on a daily basis especially for supermarkets, groceries, home essentials, home appliances and safety items like masks and sanitizers and we have delivered them safely,’’ Ms Abaho says. 

Thriving sectors 
Businesses in the health and sanitation sector have been able to make money. Mr Walugembe says as people are becoming more cautious about their health and to avoid contracting Covid-19, products such as sanitisers and soap are becoming daily necessities for consumers.

 Therefore businesses in the making and selling of sanitisers and soap are have been able to stay afloat and make some money. 

The agriculture sector, despite the pandemic which was followed by lockdown, has continued to thrive. People are not stopping to buy food. 
“Foods such as vegetables, fruits are on market as these are foods needed to boost our body immunities, meaning traders in the agriculture sector continue to reap some cash,” Mr Walugembe says.
Hard hit sectors
For those who invested in education, lack has not been on their side in 2020. The education sector will continue to suffocate because only a few learners are continuing with school, a situation that is likely to continue into 2021 even when schools reopen. 

The tourism sector despite airports opening up is still struggling. People fear to travel as their health comes first. Many tourists are cancelling their bookings especially for the festive season to March next year with hope for a vaccine to cure the deadly disease. This is likely to drag a bit longer. 

Mr Walugembe adds that the real estate sector will also continue suffering as there are limited investments from both the auction investors and local investors. These are long term investments as most people’s cash flows were affected by the pandemic to venture into such long term businesses at the moment. 

For along as social distancing has to go on to contain the transmission of the virus , people in the entertainment sector have to continue braving for the worst because people are concerned about their well-being. 

Traders are feeling the pinch

“This time, few consumers are buying products such as Christmas cards, trees and other luxury goods. Instead, they are going for essentials and other basic things such as clothes, shoes and bags among others. This has forced traders to trade cautiously as they cannot make orders from their main suppliers such as China, India, Dubai and Pakistan among others. In addition, movement of people into and out of the trading partner countries is still limited,” Mr Kayondo says.

Uncertainty about trading in bulk
Traders have not fully embraced e-commerce especially when dealing with overseas orders.   

“Traders have been disappointed by their would-be suppliers who sometimes supply them with things they do not want or that are not saleable here. Most traders prefer physically placing their orders and thus import directly back to Uganda,” Mr Everest Kayondo, the chairperson Kampala City Traders Association admits. 

Last year, the festive season was good for traders because the outbreak of the pandemic happened in early February and March this year. 
 Traders worry this is likely to worsen ahead of general elections next year.

jmbabazi@ug.nationmedia.com

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