Take advantage of disruptions
What you need to know:
- In 2000, Shoprite Uganda opened two stores in Kampala to substantial fanfare. Until then, the definition of a supermarket was a small shop with shelves, containing a few goods. After South Africa’s Shoprite came the Kenyan Uchumi, Tuskys and Nakumatt.
In explaining the concept of disruption in business, South African entrepreneur Vusi Thembekwayo says that if your competitor can deliver the same product as you, at a lower cost, faster and on more convenient terms, then your business is in trouble.
Thembekwayo argues that if the entity in trouble does not adjust its operations to meet the new challenge, it is bound to lose business and possibly, collapse.
In 2000, Shoprite Uganda opened two stores in Kampala to substantial fanfare. Until then, the definition of a supermarket was a small shop with shelves, containing a few goods. Then, Shoprite showed how expansive and engaging a shopping experience could be, at competitive prices.
Up to this point, many thought this experience was the preserve of people who traveled to foreign countries. After South Africa’s Shoprite came the Kenyan Uchumi, Tuskys and Nakumatt. But by 2010, the size and definition of Kampala’s metropolis was growing, stretching from as far as Buloba along Mityana Road, Kireka along Jinja Road, to Sonde, just beyond Namugongo, as well as Gayaza.
Many middle-class customers that Shoprite, its South African competitor Game, as well as Uchumi, Tuskys and Nakumatt were targeting, were moving to areas far from the City centre where these supermarkets were located.
Customers had to debate whether to brave the notoriously heavy traffic, then search for almost non-existent parking spaces for their vehicles, before they could enjoy the much cherished shopping experience.
Then, entrepreneurs seized the opportunity, putting up huge supermarkets in neighborhoods where the middle-class lived, which were stocked with the same commodities and the same shopping experience that they were hunting for. This effectively cut off clients, who would have been braving the crowded roads to shop at Shoprite, Game, Uchumi, Tuskys and Nakumatt. And in time, after failing to adjust to the new reality, this foreign contingent of supermarkets shriveled and closed shop altogether. Now, a new form of disruption is about to hit a new sector of largely unsuspecting businesses.
For two years now, several vehicle owners have been buying electric vehicles, from motorcycles, to cars, pickups, and SUVs. The owners of these vehicles, acknowledge that battery-powered cars are cheaper to operate than their fuel-powered counterparts. Those who have not bought the new vehicles note that the uncertainty of charging outlets in the country to ensure a comfortable driving experience is hindering them.
One expects that the numerous fuel stations in the country would have adjusted their model to set up battery charging points alongside their fuel pumps.
Two players have already applied for financing to set up charging points countrywide. As Thembekwayo predicted, if these players set up these units and provide the service at affordable cost, do not be surprised to see the fuel business disrupted!