21st February 2020
e-commerce

5 ways to solve e-commerce failings in Zambia

e-commerce
e-commerce

E-commerce is purchase of goods or services online including mobile money transactions. E-commerce is empowering the new industrial age making Rockerfellers from modern day inventors and entrepreneurs. When WhatsApp was sold for $19billion to Facebook in 2014  Jan Koum the company CEO and co-founder netted close to $7billion. According to Forbes 43% of Kenya’s GDP flowed through mobile money with 237 million person to person transactions. Why are we as Zambians failing to make it work?

As part of the research I reached out to local developers to ask them why there has not been  a commercially successful and publicly recognisable Zambian app. The responses were diverse and intriguing. The concerns and my suggested resolutions follow.

Quality of local Developers

In the article on the failings of tertiary education we did touch on the few reasons why the quality of Zambian graduates are below expectations. When deciding on the requirements for app or web development there is a plethora of languages, tools, databases and operating systems available. The diversity of tools is not the only problem, they have a short lifespan, for instance Ruby on Rails initial release was in 2005 and it gained mainstream acceptance in 2007 when it was shipped with Apple’s Mac OS Leopard. It took 2 years from inventing the language to mainstream adoption, way too quick for our education system to get into gear. The tools, languages, etc fork regularly allowing developers select the version that best suits them; making it difficult for syllabi creators to do their work. Generating syllabi for multiple versions would push the costs of education beyond the means of most Zambians and only allow a genius to learn. Traditional education cannot and will not deliver quality gratitudes in the face of unrelenting, fast paced change.

Solution

Corporates, parents and students must understand that there are cheaper and better disruptors available for higher education to deliver of ICT courseware. People or companies with an interest in app or web development must to turn to Nanodegrees. Nanodegrees in old parlance are diplomas focusing on single area of expertise. Nanodegrees allow the lego block method of learning where you assemble your educational expertise as per the demands of commerce or your personal interests. A nanodegree has the flexibility to rapidly adopt to a changing world. One of the better nanodegree organisations in the market is Udacity whose courses are sponsored and delivered by Google, Facebook and other Fortune 500 companies. Other notable mentions are the educational entities Coursera, edX and Udemy. The cost of a Udacity nanodegree is $200 over a 6 to 12 month period making it extremely affordable, there is no additional courseware to buy either. My prescription is

  • Local tertiary institutes supplement their current offerings with Nanodegrees
  • Give students a lab and a connection removing the device and/or connectivity barrier to learning
  • Enrich the nanodegree by marrying it with an accounting, business or marketing course
  • Most importantly educate corporate HR that ICT is the new blue collar and a nanodegree will perfectly meet their corporate needs

Project Stagnation

This is when a developer has a fantastic idea and spends hundreds of hours working on it but it fails to leave the safety of their laptop. Developers continually think of improvements to their app or better ways to solve current problems. The endless development process is a feature creep hamster wheel, with the app continuously being improved with no completion date. As Techtrends, we have followed local developers on the verge of releasing their application for months on end and are still on the verge. Before I give my solution I will break down what I believe to be the roots of project stagnant.

  • Developers tend to be primarily introverts. They are happy to be stuck in code and have minimal motivation to break the cycle
  • Developers can get too emotionally attached with their projects.  Emotional attachment makes anyone either ultra sensitive to criticism or resistant to it.
Solution

Get a mentor you do not idolise but respect enough to challenge. Give your mentor an incentive to have a vested interest in your application, this could be through share offerings or paying them a fee. If you are paying someone for their time you will respect and use the time wisely. When you give them shares you will expect that they carry their share of the burden and will engage them actively on equal footing. Local app developers need to stop looking for angel investors as the only panacea to their problems. Developers also need to talk amongst themselves and rate mentors; decide which mentors are worth their salt and which are not.

Opportunity Cost

Is defined as the cost of the value of the best alternative foregone. Simply put, we have 24 hours and have to focus our efforts where we think we will get the best returns.  We compare these against other options and decide if indeed this is the best use of talent and time. I will quote the developer ‘Chizzo’ here on the challenge of opportunity cost facing developers

To add on, a huge issue is opportunity cost; most developers in Zambia are into development part-time. Employment and business are more sustainable and viable than app development at the moment, hence we don’t go all out and focus all our energy on a mobile or web development, unlike our counterparts in more developed industries where you are more likely to get monetary returns on time, effort and money invested. My favourite example is a kantemba. You can make more money running a Kantemba than a website because you can easily receive payments from customers and startup cost is lower. With a website you have recurring hosting fees and development costs, which are more like sunken costs, for a free service. 

Solution

Starve or live under the stars! This may be the crux of the matter. To fix this problem developers have to be realistic with development times to ensure investor interest is maintained; you too are an investor in your own project. If the app is due out in 6 months give the investor regular updates and notify everyone interested when milestones are missed. Recalibrate the delivery dates and update everyone, keep a running dialogue on delivery. The second fix is understand what the estimated developmental period will cost you financially. If you are bootstrapping your startup, understand how to cut costs, for example, using an innovation hub. Get a job and allocate yourself time after hours for your project but be honest with your employer that you will be unavailable after hours due. The most important adjustment will be to your lifestyle, every spare ngwee should go into your project. Before you dive into the project, have a time and financial budget, do not get caught in long developmental cycles you cannot fund from your personal equity.

Accessibility

Developers faulted the user for not having access to the media to commercialise the product. The view has strong correlations to a fictional but relevant quote “If I had asked people what they wanted they would have said faster horses”.  The need has to be there or else people will not change their habits. The market exist and when priced right can be financially viable. We look at the MTN 2015 year end financials, the Average Revenue Per User (ARPU)  was $3.63 but that is only half of the picture, the ARPU of first world countries below paints the rest of the picture.

ARPU per User in 2015
ARPU per User in 2015
Solution

Research and understand the available share of wallet. A user in America will pay $1.00 for his or her favourite app because it is only 2% of their ARPU, a negligible part of their telecommunications spend. Pricing an app for $1.00 in Zambia is asking the user to add 25% to their telecommunications spend, does your app do that much for their lives? Some sad alternative realities here; stop developing for Zambia and target markets with a larger audience, a higher ARPU or reduce the cost of your app to less than 5% ($0.20) of a users ARPU.

Lack of a Market Place

Users get their staple apps from the operating system ecosystem market place be it the Google Playstore or the Apple App store. A user will search for an app using a generic keyword, and pick one from the first few apps the list, if a developer does not have a uniquely named app or a big App Store Optimisation (ASO) budget their product will not be found. The sheer size of the app stores mean the likely hood of a user stumbling across your app is improbable.

GooglePlay vs Apple App Store
GooglePlay vs Apple App Store

With 50 billion apps available on each platform the app is almost guaranteed to be lost in the noise.

Solution

Developers need to have better local media coverage of their work to generate interest in it. Word of mouth is the largest driver of app adoption, and when mentions are from the media or celebrities the impact is magnified. Developers have to identify these social convincers and fight to get on their radars. The second solution is for developers to bypass the traditional app store and focus on the corporate market. Corporates have secure markets for their core goods and/or services short cutting the need for the developer to go out and find buyers. When engaging corporates developers must be willing to risk it all by allowing the corporate to be a shareholder in the product, reducing the cost and risk of development for the corporate partner. This approach will build greater trust with the corporate ensuring a long term partnership as everyone has a vested interest and you have some ownership rights.

I am certain many developers out there will feel they are being targeted or have tried all of the solutions above but nothing has worked. Let us have the debate on the cause of Zambian e-commerce failings. We have to understand how a Zambian solution will work and bring a template from elsewhere and expect it to deliver.

Img Sources: www.statista.com, www.theappentrepreneur.com,

Vinni

A wantreprenuer always hungry for new opportunities. A passion for technology and heart for influencing people.

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3 thoughts on “5 ways to solve e-commerce failings in Zambia

  1. Some good insights especially on the dynamic nature of the tech world and the need for developers to constantly update there skills. A couple of things I’d like to highlight; 1st mobile commerce will not follow the same path or model as it has in Western countries, developers and entrepreneurs must think of solutions that are suited to the local mass market (smart phone apps are not yet viable a mass market e-commerce channel – USSD has been extremely successful because of its simplicity and universal compatibility with almost all phones). The base interest in e-commerce is certainly there, just looking at Zo’ona’s annual transfer figures, the long snaking lines at Shoprite money transfer counters and you’ll see what I mean. Money is already moving around, now we just have to figure out how to channel it to goods and services, Airtel Money and Mtn Money have had some success in this regard (bill payments etc), but a greater array of choices need to be made available to encourage people to keep there money in the ‘ecosystem’. #MyTwoCents

  2. I agree with the first comment. On developers we are way behind. I have noticed that Zimbabwe has provided some of the best developers to the Zambian market. As you stated Zambian apps are in an ocean of other apps. We need apps that are more zambiancentric. I did like an from bogwehive on translating local languages, it had it’s limitations but nice idea. I think if big companies invest in developments for apps for their services we can get somewhere. Currently companies that do have apps import them from their international parent companies. Another point as stated is that if a services can be provided via ussd chances are customers will choose that option because it doesn’t chew data. On the mobile money front research shows that Zambia has more dynamic services than other markets , problem here falls to our population size and the number of people who can access the services we only have 8.7 million adults. However 86% are willing to try out new technology.

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