In a changing technological world, many innovations to ease the common man’s way of life have been developed. From making phone calls, sending messages to travelling at supernormal speeds across continents in vessels of all shapes and sizes.
The development of the internet is one of mankind’s greatest milestones. This has subsequently seen businesses built on a network platform, blow up. E-commerce has strongly gained momentum in different parts of the world especially in line with shopping. People no longer need to move distances to purchase a good or a basket of goods. They’re just a click away.
Ugandans have not been left out of this craze with various online shopping platforms setting up shop. Thus far, more than 10 online shopping platforms have been established online and can easily be accessed by the masses. I myself use a number of these sites for instance jumiafood for food and beverages, dondolo shop for mobile phones and accessories, OLX for second hand merchandise, killimall for general accessories, to mention but a few. The list is endless. But their cost of using and prices are preposterous.
The greater population in Uganda is of a common man who only affords what they can buy to survive, we could hardly see these online platforms flourish. Internet alone, is a hard nut to crack for the poor. Although the number of users is gradually increasing, a significant chunk of the population is still isolated. Yet business is a game of numbers. The less the numbers, the lesser the performance.
Only about 31.2% of the total population has access to internet of which most of the people under this blanket do not access the web regularly. With the high cost internet bundles in relation to the common man that the oligopoly telecommunication industry is offering, this access will continue to decline. Although competition among these companies has managed to drive down the prices, spending on a bundle daily is still above the average Ugandan’s income. The growth will be exponential but can these online companies like Jumia handle this kind of patience?
Extortionate service experience
Yet Hypermarkets are on rampant cessation, you would think the e-commerce franchise could have picked a lesson or two from Uchumi and Nakumatt. Rationally they couldn’t expand upcountry where the market was presumed inadequate. To the shock of many stakeholders, even the so-called catchment market here in Kampala was not good enough to sustain their operations. With massive debt, and supernormal tax deficits, Nakumatt Kampala has been closed till further notice. These facilities failed to achieve optimality. They were accessible in that any low income person living in Kampala did not pay more than Ugx. 1,500 for a taxi to reach this destination. Nevertheless, their problem would arise from the accrued costs, say they wanted to buy something from any of these hypermarkets on a daily basis. More so, many of the citizens complained about Nakumatt’s overpriced products. Makula, a local in the suburbs of Bugolobi admitted that he could only purchase bread at Nakumatt because the price of bread was the only unison factor with other shops. Implying, they had a competitive disadvantage with their rivals.
Price factor is very crucial. Take Jumia Uganda for instance, most of the products they deliver are for the higher class. Remember the higher class of Uganda is just about 10% of that 31.2% connected to the internet. That’s narrowing down its market by more than double. Even crazier, these products are still overpriced for the higher class especially those cost-efficient Ugandan entrepreneurs who only spend their money after exhausting all possible less costly possibilities.
In a survey SB carried out around Kampala road, Uganda’s home for electronics, an HP-probook i3 laptop goes for Ugx. 1,300,000. The same machine goes for Ugx. 1,500,000 less transport on the Jumia website unless there is a promotion. Additionally, an upgrade to the HP-probook, the i5, goes for Ugx. 2,000,000 at the former while the latter charges Ugx. 2,300,000 less transport. Even the well-to-do locals will find it difficult to ignore these price variations. A rational stakeholder knows that promotions are limited. Basing your market on promotions could work in the short run but can only hold out for a couple of years before reaching its shutdown point.
The delivery cost (similar to the shipping value on amazon) is even more than what a common man would pay to a taxi conductor to Kampala road, purchase the product say a laptop, and get back to his humble abode. For SB to procure a laptop from Jumia to Ntinda, it costs the company Ugx. 6,000. In contrast, we spend a total of Ugx. 3,000 to and fro, from Mercury computers limited, Kampala road, where we have bought some of our laptops. That is 50% less than what we have to pay to Jumia for delivery. Consumers always look to maximise their utility especially in such situations where the opportunity cost of delivery to transport is twice as much.
Cost of using the service
To begin with, acquiring a smartphone in Uganda is not an easy thing especially for the middle-income and low-income earners that dominate the population. Yet, a smartphone is not just an obligation with this service, it’s a necessity. SB made a survey of the smartphone prices (those able to use the Jumia app without complication). The cheapest smartphone could go for as high as Ugx. 150,000 but lacks prerequisite to use modern applications, like those, designed for these online services. Remember not just a smartphone can power Jumia app to its full efficiency. One that would suit the job could cost as much as Ugx. 500,000, a price that is set to continue accruing with persistent core inflation that hit a 2017-year high rate back in February of round 5.7%. SB cannot guarantee that the larger share of the urban population will possess one of these in a short period of time.
Keep in mind that most average middle class Kampala shoppers are of a show-off genre, they want to be seen entering into a high-end shop for their purchases. But Jumia wants to just deliver to them these products, thereby cutting off their show-off time. It just won’t work out. That’s why a premium brand like Apple sets minimum standards for all its outlets in terms of display and branding. Customers want to visit and be seen in the apple stores. Jumia could do well channelling traffic to such outlets instead of delivery.
Regrettably, the richer portion of the urban population lie within the old age bracket, that is, between 45-75. Most of these individuals were born in the mid-90s and are not well acquainted with new trends especially in the world of science. One of our staff reports that he spent many an hour trying to teach his mother how to use her newly acquired smartphone. To his dismay, she still struggles with the normal tasks, that is, calling and sending messages using the touch interface. Three months into its life, they are yet to tackle the part where you use the device to manipulate the internet. This could take them more than a year based on the previous tutorials. This is the age-group Jumia’s product pricing is targeting. Most of these individuals can hardly use their smartphones for basic applications. What pans out when they are tasked to go to google playstore, download one of the Jumia apps according to service required, install the app on their phones, sign in to the app, search Jumia’s portfolio for products?
Quality of service
SB carried out a dummy test on Jumiafood delivery to assess its efficiency. We were looking for a food provider for the company. Our company values include ‘Value for time’ and that was our key performance indicator in choosing a food provider.
With all the prerequisite resources, we made our order using the app. They promised to deliver the food within fifteen minutes.
After the fifteen, another ten minutes passed. Soon it was thirty minutes. We called them forty minutes later to inquire about what had happened and all they told us was, “We are on our way.” SB was getting restless. A full hour passed before we could get my meal. We got our delivery ten minutes after the hour mark, all infuriated. How can you promise us lunch in 15 minutes and bring it an hour later? Don’t you value time? To some of us, time is money. Eating a meal after lunch in front of our bosses gives us a bad image in the company.
This is just a tip of the iceberg to what Jumia customers have experienced after making their orders. Jumia food orders are well-known for delaying. To get what you want, you have to order almost an hour or thirty minutes earlier than scheduled time. Time is money. The little proportion of their market that used to order is slowly getting absorbed by upcoming companies and/or nearby restaurants. Why would a person order for food that will come after an hour, when he could move for few minutes to a restaurant, make their order and comeback after eating?
At some point, we wanted to request for a refund. But the no-refund policy on food deliveries stalled our advances. You would think that Jumia would at least give their customers something to count on if a service wasn’t rendered on time. But to the team’s dismay, such a clause has not been imposed on food deliveries. You have to assign yourself contingency time for the order. Order at half past midday for your order to reach before two in the afternoon. A company that doesn’t value time for their customers will find it hard to sustain active users who will continue exploring better options.
Hitherto, when the order reaches the client, it’s messed, most of the time. A customer who has waited that long would at least expect a perfect delivery. One with all that he asked for. Most Jumia deliveries are mixed up. This is common with food deliveries. At first we thought reason they were taking long was because they were handling every order with utmost care. Contra wise, it’s just a disorganised delivery system. Food delays coupled with mix ups. Isn’t this a failing system? With such performance, this could be another case of Nakumatt, only that it’s a platform set out in virtual space. We might not literally see them close. Like Duuka, TakeawayUg, shop 24/7, ZIDI, meka.ug, which shutdown months ago, Jumia might close shop soon with its time-wasting services.
Confusing app portfolio, why not merge all the services in one?
Online shopping cannot be fruitful unless you have an app. Of course Jumia fulfils this criterion although in a manner we would call an overdose for a low-income dominated country. In a market like Uganda where internet bundles are very expensive in relation to the budgets of low income groups, having many apps cripples their ability to exhaust all your services. Okay say you want to diversify your portfolio, at least make the apps cost efficient. Three megabyte applications like the MUKthru app could help a lot in cutting these overhead costs, but you find Jumia food app is 25.3 mbs while that of Jumia shopping is 13.39mbs, a combined figure of about 38.69mbs. To download Jumia’s apps, one will need a bundle of more than Ugx. 1,000. I’ve not included all their app portfolio because it could make a paragraph of its own. ‘Yes it’s that much’. Users would rather have one app do a number of tasks, say order food, purchase electronics and make trips than have an app for each of these. Additionally, they would prefer a much smaller app. Other companies like Killimall have smaller apps of up to 7mb, an app that one can get even with a 10mb bundle worth only Ugx. 250. Consumers are more likely to use the least cost process if they have an option. Killimall is offering you this chance.
The apps themselves are terrible. They are not only heavy and slow, but also exasperating. It’s as if the app was made to create advertisement space instead of rendering services. There are too many ads. Before you make your order, a number of popups will be triggered. This irritates the users. If you use the Uber app to order a ride, it is as simple as ‘abc’. But the Jumia app complicates things with its timewasting ads. Are they too desperate that they have diverted their service app to advertising space?
Extortionate prices, high cost of using the service, poor quality service and a confused app portfolio. What a dreadful experience! Certainly, Jumia Uganda is a not so convenient online shopping destination for Ugandans.