E-COMMERCE
Navigating The E-Commerce Turbulence
By Martin Muli
The Global adoption of ecommerce was accelerated by the Covid-19 Pandemic that forced customers to adopt online shopping to maintain social distancing .
In 2021 , the global retail e-commerce sales amounted to approximately 5.2 trillion U . S . dollars and is projected to grow by 56 percent over the next few years , reaching about 8.1 trillion dollars by 2026 according to Statista .
According to EcommerceDB report , Kenya is the 55th largest eCommerce market generating revenue of US $ 3.4B in 2021 ahead of Qatar .
This positive performance has motivated entrepreneurs to set up venture capital backed ecommerce supply chain startups . Retail stores have also incorporated online stores in their business structure with the e-retail sales estimated to contribute 24 % of the total retail sales by 2026 .
In Kenya , most of the ecommerce startups are struggling to stay afloat like Kune that shut down after one-year operation , Sky Garden that was facing closure after failing to close a round of financing and
Sendy , a fulfillment and logistics business that announced 20 % downsizing . A recent research by startup Genome shows that 9 out of 10 startups fail , 7.5 out of 10 venture backed startups fail and 1 in 12 entrepreneurs succeed .
With roughly less than 75 % of venture backed ecommerce startups failing , stakeholders must interrogate ecommerce business models , operations and projections to identify leaks that lead to failure . I have identified some of the dominant failure magnets that trap ecommerce startups .
Business Case
It is important to research on the market and identify the consumer pain points before launching a business . A lot of research goes into identifying the problems that need to be solved and the right product features . Development of a minimal viable product ( MVP ) at the initial stages will help better test some of the hypothesis before making huge investments .
A business that has created MVP has a better chance to grow 20 times faster than one that hasn ’ t . It is important to build a
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Ecommerce start-ups should study consumer technology preference and stay agile enough to rollout new platform features in order to stay connected with different customer segments and offer optimized customer experience through their convenient platform features . business case and generate business and functional plans that will guide the team in navigating the journey ahead . Rolling with the punches and build-as-we-learn approach sounds great but is , without doubt , unsustainable in the long run .
A detailed business case gives a realistic visibility of the entire business and helps develop sustainable strategies and processes .
Ecommerce Adoption Readiness
The adoption of ecommerce is to a large extend affected by different dimensions of readiness including organization , industrial and national . Organization readiness to adopt ecommerce is determined by its culture towards digital transformation and resource allocation to grow ecommerce investment and ability to upskill an reskill talent resource to become competitive .
The existence of Industry related ecommerce bodies drives development of global standards , practices and ethics that guide organizations towards maintaining global best practices . Such bodies don ’ t exist or are not as vibrant as they should be to generate positive impact in the eCommerce industry .
Fast adoption of ecommerce is also affected by national infrastructure including connectivity , policy and legal frameworks driven by the state to create an enabling environment for local and foreign investors . Governments in Africa are in the initial stages of creating a favorable business environment for Ecommerce .
The shopping cultural behavior and especially the fact that Shoppers in the
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