African e-commerce companies must scale quickly and understand their customers if they are to be ready to “ride the wave” as consumer spending picks up and more Africans shop online on a regular basis.
This is according to panellists at last week’s Africa Technology Summit (ATS), hosted by the Meltwater Entrepreneurial School of Technology (MEST), which convened leading corporate executives, entrepreneurs, investors and media who are shaping Africa’s tech ecosystem.
The session on e-commerce saw Tope Folayan, co-founder of MallforAfrica, which allows Nigerians to purchase items directly from United States (US) and United Kingdom (UK) sites and have them delivered to their homes, urge e-commerce companies to make sure they understand the business and be prepared for large uptake when it happens.
“Being in a fast growing market you need to know that you have to scale quickly. The first thing is to get the customer great experience from the start, like a refund in good time,” he said.
“Understand the impact of cash on delivery since it can disrupt your bottom line, and over time our decision to refuse to accept cash has created trust over time and our customers too have adopted quite nicely.”
Folayan said e-commerce startups needed to plan and understand the business cycle.
“The real test or proof is the evidence is that the potential is there, consumer spending will still pick up and once that happens you need to be ready and in a good place to ride the wave,” he said.
“The African consumer is changing every day, very fast, and you have to keep up with the change to remain relevant.”
Folayan’s views on the importance of planning were echoed by Etop Ikpe, managing director of fellow Nigerian e-commerce startup DealDey, who said founders needed to be prepared for the unexpected.
“The fluctuating currency does have a significant impact. You can only plan so much. At the end of the day it is about how innovative you can be to rise to the occasion every time,” he said.
Ikpe urged e-commerce entrepreneurs to keep their eyes open as new opportunities are springing up all the time, and learn from other companies that have faced similar challenges.
Raphael Afaedor, chief executive officer (CEO) of Nigerian online grocery delivery service Supermart.ng, said e-commerce companies needed to spend time on ensuring the whole experience of shopping online was perfect.
“If you go online and order an item, you get exactly what you ordered for, and the whole experience is great enough to want to repeat,” he said. “If you create value the customers will come. Understand the person you are serving.”