There is no lack of appetite in the Zimbabwean market for ideas and products that have done very well in the first world. Looking at the examples of Amazon in the US and Takealot in South Africa the question begs as to whether Zimbabwe would ever have such eCommerce giants operating within our borders? The short version has good news and bad news. The good news is we are not far away, the bad news is we have not been far away for a very long time.
Let’s briefly look at the factors that contributed to catapulting both Amazon and Takealot to their levels of success. From this point, we can start to see what has stood in the way of those who have tried in Zimbabwe. My goal here is not to do a complete study of Amazon and Takealot but rather to highlight some factors.
Amazon started with one thing, books. I count this as an important success factor because mastery of the market must come before success. From this point, they developed an insane customer focus which saw them investing in faster distribution of products. Amazon has also swallowed many smaller companies like Zappos they saw succeeding but not before trying to beat them and failing. Amazon has shown a long term focus and dedicated to relationship building rather than sales. Today the behemoth has branched out into many other areas but in every case, Amazon has delved to make things better. In business in general and eCommerce specifically, if you cannot describe your business with a word that ends in er (faster, easier, cheaper, stronger, longer etc) you will find it very difficult to break into any market. The Fulfilled By Amazon program, which allows retailers and manufacturers to place their stock in Amazon warehouses and let Amazon take care of the selling also proved very fruitful.
Takealot may be less popular but has a lot in common with Amazon. Takealot was born with the takeover of an existing eCommerce business Take2 by an American investor who poured US$100 million into the venture. This money was put to good use as over the next few years the company snapped up Mr D courier (delivery), Superbalist (fashion) and Kalahari.com (bookseller) to be part of its growing unit. Takealot also adopted a fulfilment programme similar to Amazon’s. I’ve had the fortune of using Takealot, they also show customer focus. They have included options such as paying cash on delivery to counter the payments system deficiencies (though currently on hold due to Covid-19). However, eCommerce was estimated to make up only 1.4% of sales in South Africa before Covid-19. None the less if there is a leader in South African eCommerce it is Takealot.
Success blockers in Zimbabwean eCommerce
There are a few factors that block the success of eCommerce in Zimbabwe and we can quickly contrast them with the factors that lead to the successes of Amazon and Takealot.
The Money Problem
We cannot, of course, ignore the elephant in the room. As Edwin Hama perhaps prophetically sang in the 1990s “we’ve got a problem, a money problem”. Zimbabwe’s chop and change rules around currency are hurting any efforts at stability. Pricing is complicated and while the government mandates we use a conversion rate of 57 to the US dollar for pricing goods as of the latest foreign currency auction (June 23 at the time of writing) businesses are not accessing foreign currency at that rate. Even those involved in the auction.
Logistics are the next huge challenge. Big industry has shown a disdain for working on the logistics side. Zimbabwe is still very much a brick and mortar nation but surely logistics companies would be spearheading developments here. Instead, fledgeling businesses are forced to invest in their delivery infrastructure which is great until you’re overwhelmed or nobody comes. Fresh in a Box experienced this boom and quickly outsourced logistics but it proved to be an early bottleneck for them.
Payments are the next big success blocker. Cash is simply not accessible in the nation. Ecocash, the darling saviour of the nation in this regard has its fair share of problems. The banks seem happy to be an unattractive payment method. This results in complicated payment systems. There are two success factors when measuring payment systems which are speed and cost. Payment systems in Zimbabwe can at best get one right but not both.
The digital divide
Access to the internet is another big success blocker. The US and South Africa have massive populations and even if they had low. internet penetration the market would still be big. Zimbabwe’s small population coupled with a skew towards the population being rural make this a big problem. The icing on the cake being low, rarely increasing income levels in the face of high ever-increasing prices. We may not acknowledge communicating through it daily but the internet is a privilege in Zimbabwe. Developments over at WhatsApp have certainly made online marketing easier and Sasai’s attempt to rope in payments certainly makes sense but the app is yet to gain traction. WhatsApp launched payments in Brazil but the move was soon blocked by the Central Bank.
To answer the question posed earlier I will quote something Jeff Bezos, Amazon founder said: “Overnight success takes about 10 years”. In Zimbabwe 10 years, let alone 10 months of stability is a lot to ask for. We currently have a lot of eCommerce businesses in Zimbabwe that are trying with varying success. Ideas like 10ngah have struggled. Perhaps its fitting that the success story we can point to is a simple greengrocer come grocer, Fresh in a Box. I think it reflects where the economy is, small purchases for immediate consumption. Rainbow Tourism Group has ventured into grocery eCommerce to save revenues from Covid-19 effects. Both Amazon and Takealot eventually went into groceries. Amazon purchased Wholefoods to do so.
I guess after reading all that my short version answer makes sense. We are not far, some monetary stability will do every industry some good including payments and logistics. The digital divide is being closed by apps like WhatsApp which give people an easy entry point to the online world. However, we have been in the same state for quite some time now and that is the hard part. It will not take us long to get up but as things stand it’s hard to see us getting up.