14th November 2019

Kaymu shuts down Zambia presence: Why e-commerce is struggling in emerging countries

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Image Source: Kaymu Zambia

Online shopping platform Kaymu ( formerly www.kaymu.co.zm) has shut down its operations in Zambia with ‘macroeconomic reasons being the official cited by some internal sources here. The official site now shows only the following countries with its presence:

Kaymu Locations

Here’s why I think it failed to thrive in an emerging economy as Zambia has:

  1. The population here is largely unbanked, and Kaymu knew this before setting up (online) shop here. That’s why they operated on a cash-on-delivery basis or received payments on behalf of buyers through MTN’s Mobile Money platform. However, there are still some buyers who were far too skeptical of the whole online shopping process and stuck to physical shopping. The lack of extra payment systems hindered its growth for the remaining banked population that does have cards and many are now learning how to use them for e-payments. That was an area left out in selling opportunities.
  2.  They outsourced their delivery service, meaning deliveries were made depending on the schedules of the delivery service and availability of deliverymen. If Kaymu had its own internal delivery system maybe it would get the orders to its consumers in the same town faster, except those out of town would obviously have to depend on 3rd party delivery services as it would be expensive for the company to travel to deliver those orders.
  3. They needed an offline presence to earn consumer trust: there seemed to be  a higher focus on pushing sale online and I get it, they are an online marketplace and they could provide links to goods they have on sale, but people trust an online business more if they see the faces behind it. Yes, there were field agents who walked the streets to find new clients and explain to them how to use the site to buy or sell goods, but that was restricted to one area, Lusaka. They could have invested in more radio and TV ads to reach out to a wider audience across the country. There’s nothing like a human being talking about a product to instill a level of trust in it in cash-payments-loving country like Zambia.
  4. They should have competed against the more efficient physical retailer. Most customers would feel it’s much easier to just walk to the store and get what they need rather than wait a day (or 4) to get it. Some deliveries took longer due to the point above in 2. Others who did math well calculated that the cost of paying for the delivery of the item was less than it would take them to walk to a store that had the same item so there was no point using the site at all.
  5. Sellers didn’t have the stock they advertised. Many of the items being ordered were either not available or not sold out, which was the fault of the sellers who advertised goods without updating their stock online. This frustrated many sellers, reducing the return rate of most of them to the site.
  6. It wasn’t great timing to open up. Many people are still far behind in understanding online shopping and e-payments, or are still scared of being conned out of money. No matter how established a business is in other countries, there is a sense of insecurity about having to make payments online in Zambia at the moment due to the many stories of people losing money to such. The Kaymu Facebook was flooded with questions regarding its location, clearly showing they didn’t get the ‘online’ part of the business. Many expected Kaymu to stock the items in one massive shop. Refer to 3 for how they could have combatted this.

With these reasons, it’s easy to see why Kaymu could not yet thrive in Zambia. Maybe they could come back in a few years when Zambians are a little more open to buying what they need online. For now, we’ll continue to teach them about e-payments with credit cards and mobile money…