Rwanda: What Growth of Online Shopping means for the Local Economy

By Julius Bizimungu

The rapid evolution of digital media has created new opportunities and avenues for advertising and marketing. The increase of Internet-enabled devices has led to the exponential growth of digital advertising as well as spurred growth in global economies over the past two decades.

In Rwanda, tech startups are increasingly coming up with innovations to ease business operations, improve service delivery and the way people do things. GroceWheels, a Kigali-based online service provider dealing in grocery deliveries, is one such startup.

Gael Murara, the GroceWheels chief executive, says startups like GroceWheels have revolutionarised the shopping experience of Rwandans.

“With this facility, shoppers make orders in the comfort of their home or office, which saves them time and money,” he says, adding that the shopping solution was inspired by the need to ensure Rwandan shoppers get deliveries anytime, anywhere.

Most people physically go to stores or markets, or send domestic workers to the market to get supplies for their households. Murara argues that these options are very limiting and time-consuming for the working class residents of Kigali. Businesses also suffer as they increase budgets to employ more staff to handle such roles, he notes.

Techpreneurship is growing on the back of government’s investment in ICT infrastructure. Alissa Orlando, the Hellofood country director, says the growth of online shopping and marketing is giving more people opportunities to do business or receive a service.

“The e-commerce space is growing quickly in Rwanda, and there are an increasing number of products on offer online. This has created a lot of excitement among customers because it gives them variety and convenience that comes with shopping online.”

She notes though that some areas of the nascent sector should be improved to serve clients better. Orlando cites the need to enhance access to a number of shopping sites online, arguing that this will give shoppers a rewarding experience.

“Some e-commerce companies only have applications for select operating systems…Firms also need to consider, not only the online shopping experience, but also the offline experience. For instance, we ensure that all Hellofood delivery people wear uniforms, and that the food is stored in a branded delivery box to ensure that the customer experience is seamless through the time of delivery,” Orlando explains.

Growth factors for online services

Louis Muhire, the proprietor of Mergims, a mobile payments firm, believes that as the local Internet penetration expands, more people will embrace new ways of marketing and doing their businesses in general, including using online facilities.

Mergims enables Rwandans abroad to pay for airtime, utility bills and tuition fees for their family back home on its payments platform.

“The current trend locally and globally points to a shift from the traditional advertising channels to the online to capture the millions of people that access the Internet. Businesses have realised that for one to go to the next level, they must embrace the new technologies,” he notes.

“Therefore, online shopping and marketing are becoming avenues of choice for many shoppers and businesses. These avenues are in fact generating a lot of revenues to the economy and can no longer be ignored.”

Orlando and Muhire say online businesses and services are growing at a high rate to be ignored by conservative entrepreneurs and policy-makers any longer.

“We deliver meals to over a thousand clients a week, thanks to increased brand awareness and the growing smartphone penetration across Kigali,” Orlando explains.

Muhire says the year-old company (Mergims) expands at a rate of about 55 percent quarterly, “which I think is not bad when you project it for the near future”.

He advises techpreneurs to choose partners carefully, saying working with the right partners is an essential growth factor and ensures sustainability of the business. He adds that firms need to build strong customer relationships, and protection mechanisms.

Murara, however, notes that tech startups still face many challenges, including lack of capital and competition from established service providers.

Increasing online visibility

Entrepreneurs today employ different online marketing tactics and strategies, including displays, e-mails, behavioural targeting, affiliates, ad networks and video advertising, to advertise their services and hook customers. Techpreneurs who use a multiplicity of advertising channels are tapping into the vast virtual community to strengthen their chances of cashing-in on these Internet users just as businesses ordinarily take advantage of radio audiences or newspaper readership to market and sell their products and services.

Govt to continue improving ICT infrastructure

Didier Nkurikiyimfura, the director general for ICT at the Ministry of ICT and Youth, says the government is committed to developing e-commerce, saying it is one of the areas with the potential to boost growth.

“Government supports and promotes the e-commerce, which is part of building a cashless economy. We believe online commerce platforms and services increase the velocity of doing businesses. That’s why, for instance, the government has for the last four years partnered with Visa to promote use of facilities like debit and credit cards to encourage Rwandans,” he says.

He adds that online service providers and platforms (stores) save time for both businesses and customers. This helps strengthen the logistics industry, supports exporters, as well as increases capital inflows, and creates more jobs.

Nkurikiyimfura says the government has put in place measures to protect users of online services by adopting global standards like the proprietary information security standard, which is the payment card industry data security standard.

This post first appeared HERE

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