In the last one year, a lot has happened in the eCommerce world in Africa. Just recently, OLX announced closure of their Kenyan and Nigerian offices and would be pulling back operations to South Africa. Almost concomitantly, Konga, one of Nigeria’s top eCommerce firms, pronounced it was scaling back operations in Africa’s second largest economy.
A recent survey of fintech start-ups in Africa by Disrupt Africa established that over 70% of eCommerce start-ups are yet to break even. This, sadly, is the situation despite the enormous opportunity for growth. Jumia is currently enjoying dominance in this field and it seems is not stopping any time soon despite suffering losses in the recent past.
Nonetheless, in Kenya, Safaricom Kenya Limited announced they were launching their version of eCommerce, Masoko and followed it up with Songa, an online music platform. Be it as it may, Safaricom pegs the success of the two entities on its strong brand and it would be important to learn how a fintech like Safaricom, has built dominance in the highly competitive sector despite being new entrants into the industry.
To best appreciate this, it would be good to revisit a book by Simon Sinek, titled “Start with Why”. Simon postulates that brands that have sustained business sales over time have formulated a way to connect with their target consumers through communicating strategically.
In this case, rather than push for sales volumes through campaigns, they start by communicating to their target audience the motivation behind what they do. This is called communicating the Why the firm exists and ultimately, establish a bond with your target audience. The end result of this is an emotional connection with the buyer and this enables the target audience to buy into the product eventually, what Sinek called the WHAT. Dominant brands employ this technique to enhance market penetration and sustain product loyalty.
Building a relationship takes time and requires patience. In all the profiled case studies sampled for failure in eCommerce, the investors were not patient to let the business grow organically and return profit. What they failed in was to push for revenues in anticipation of profits and a quick return on their seed capital. When their expectations were unmet, they exited the scene.
A properly done brand communication strategy, borrowing from the Safaricom brand story, would start with studying the target market and getting to appreciate their demographics and culture. By aligning your corporate brand to your potential clients’, you in effect are warming up to them for a start. Secondly, it would really be important to establish what challenge the society has and thereby targeting your brand communications to be in line with providing a solution to this. In this way, the client would feel at home approaching the brand for a solution. Safaricom’s big break came during times of adversity – the 2007/2008 Kenyan Post Election violence that made financial transfers and transactions a big challenge. By launching Mpesa, its mobile wallet survive, Kenyans were able, with confidence and convenience, be able to send cash and trade freely. This is what has endeared Safaricom to the Kenyan people and mad exit to be the corporate behemoth it is today, with a market share of over 70%.
Would you want to thrive as an online entrepreneur? Start with WHY you exist. Go out and interact with your target market and tell your story. Because so long as you will sell your product and push for sales, the revenues would not come.
Sustainable sales come about when you commit to build a relationship with your market and thereafter, enable them see the solution to the market gap that you offer.
Start with WHY then later, your WHAT!