Don't Sell Online in Africa, Unless,...
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Transcript of Don't Sell Online in Africa, Unless,...
US (You & me)
Good News & Cross Border eCommerce
What Country
Risks & Tips
Case Study: Cool Stuff
Our Vision
TEST:1. Offline before online
2. Find Price Point > Target market
1. Rival the French Revolution
Be Excellent at Execution
2. Think Prius
Be Hybrid
THE EXPERTS SAY:
MY TWO CENTS:
REALLY SMART PEOPLE SAY:
African e-commerce market:US$ 8 billion in 2013
US$ 50 billion in 2018*
Population: will surpass the 1.5 billion by 2026
2 billion 15 years later**
Mature internet users
Improving payment solutions
Affordability of data
Improved Platforms
Economies of Scale
GEARING
Cross-border E-commerce History (China)
MY THOUGHTS: DEVELOPMENT OF SECTOR DRIVES GROWTHINFORMATION TO TRANSACTION
CROSS-BORDER ECOMMERCE: SOUTH AFRICA
INTERESTING:
30% of Nigerian consumers purchase from SA.
Top locations for goods export for South Africa are;
China (8.3%), US (8.1%), India (7.8%) and the UK (7.2%)
27.1% US (3RD most visited: Amazon.com)
14.6% Europe
84.3% SA200 Billion USD Imports into China by 2020
86 Billion in 2016**
International CrossBorder Trade 1 Trillion USD by 2020
43% YoY growth rate
In 2015 B2C was only 15.7% of this.
Cross-border E-commerce Turnover (2015-2020)
Source: Ali Research
What Metrics?ADVANTAGES
Scalable product rangeLong-term profitabilityCompetitors Barrier to Entry
Team Resilience
Robust DemandLow price/Better quality
Unique/Exclusive Product
Marketing Spend
Inquires/ReferralsWell-known Brand
SEO or Userbase
NicheDigital ProductHigh Profit Margin
PRODUCT
MARKETING© 2017 Jonathan David Novotny
EFFICIENCIES
INTANGIBLE
What Metrics?RISKS
Legal ChallengesDelaysOpportunity Cost
Local CompetitionDirect Foreign Competition
Informal Markets
Model IncompatibilitiesExpat Costs
Theft & Corruption
Warranty ChallengesLanguage & CultureDistrust
COMPETITION
OPERATIONS
© 2017 Jonathan David Novotny
INTANGIBLE
TRADITIONAL
Market Readiness?FILTERS
GDP per CapitaEducation Level
ITU Broadband Dispersion
Market Saturation Market Size
ARDI (African Retail Development Index)
ONLINE TRAVEL BOOKINGSTIP: Amadeus CC vs. Bank Transfer
PARCELS PER COUNTRY Crossborder Trade Study
Mature Internet Users% Market > 1000 USDBanking Sophistication
RETAIL
ADDITIONAL
© 2017 Jonathan David Novotny
AWESOME
TRADITIONAL
How Big is eCommerce in Emerging African Nations?
oDigital: Domains, Digital, Apps,
oInternational Imports: eBay, Amazon, Alibaba
oOrdering Sites: Larger orders made via websites
oPeripheral Movements: Classified & Realestate Listing Sites
oBill Payment: Mozambican’s pay for products & services in SA
oFlight Tickets:
oDomestic Facebook: Selling Groups, Pages, Page Services/Whatsapp
oInternational Facebook: Cross-border Orders via FB Pages & Ads
oDomestic E-Commerce Players: Compra.co.mz , Jumia
CASE STUDY: BEFORWARD MOZAMBIQUE
Perceptions:Don’t trust online retail
You can’t sell expensive things online.
Want to touch and
Will never send their money
CASE STUDY: REVIEW
Website & Personalization
Simple Communications - Whatsapp
Simple Payment – Bank Transfer
Offline Marketing – Massive Billboard Campaigns + Tire Covers
• 20 Different Massive Companies could have done this from Japan –Kept on developing, personalizing & investing.
• Zambia: Partnerships & Rollup Banners in Telco Offices – Order in-store
• Why cheaper? 100% upfront payment.
WHATS COOL:
• Didn’t need investment
• Are not a digital company
• Are not losing money
• Probably, were always profitable
• Active Worldwide
• Persistence: Solving increasingly more pieces of the problem –Complete Solution.
• Completely localized/agile
THE LESSON:
Consumers are willing to trade comfort for
lower price.
If you make them feel as comfortable. ;-)
What Compra.co.mz Does?
Who?
Online retailer looking to simplify business in Africa.
What?
Allow Retailers and Brands to Sell Online effectively and simply• Domestic retailers
• Cross-border retailers
Why?
Love creating solutions and simplicity.
HOW WE MITIGATE RISKS:
• Use local suppliers
• Use Third-party suppliers (which are either expensive, unreliable or terrible.)• Vehicle isn’t working today
• Not answering calls
• Business shut down
• 3PLs don’t have an automated calculator – Get individual quotes.
• Market Sophistication:• SEO – Jumia & OLX (World-class competitors & previous market entrants)
• Super powerful
HUMANS ARE NOT RATIONAL BEINGS:
Complex Tech
Retail or
Mozambican Network
Marketing experience
Capital raising
Zero suppliers
Payments: No local currency payments
No Experience:
TIPS & OPPORTUNITIES:
Angola: Know a General
Malawi: Sell Nshima (pap) really cheaply
Somalia: World’s first Online AK47 marketplace