How ecommerce platforms can stay relevant and profitable

Maximus Ametorgoh Opinion Aug - 03 - 2015 , 23:20

In recent times, the phenomenon of online shopping is growing very fast in Ghana and Africa with various ecommerce platforms helping sellers of second hand or new items to market their products to potential buyers.

Many of these platforms are free classifieds where purchases are done or completed mostly offline when the buyers meet with the sellers to negotiate or seal their deal.

Some of the common ecommerce platforms in Ghana include ShopAfrica53, Tonaton, Tisu, Jasu, BayGh, Hemoh, SellGh, Kaymu, iMall, OLX, Oxglow, Zoobashop, Carmuda, Lamuda, Yougora, Ahonya, Kasoa, MyJoyMarket, Cheki, ShopSafeGhana, to name but a few.

These platforms offer a wide range of products and services to different customers. They hold a lot of prospects in changing the business landscape in Ghana and possibly in Africa.

On September 19, 2014, the world witnessed the largest IPO (Initial Public Offer) ever in New York with the listing of China’s number one ecommerce platform, Alibaba, started by Jack Ma in his Hupan Garden apartment in Hangzhou in 1999.

It now has a market valuation of $228billion, making it the fourth most valuable technology company in the world, overtaking other tech giants and its USA competitor, Amazon, with a market cap of $157.52billion. Some elements accounted for the huge growth.

10 Growth elements for ecommerce platforms

For ecommerce platforms to grow and stay relevant, they must focus on some growth elements:

Sell products consumers need: Customers mostly pay for the products they need, not what they want. So it is important that current owners of ecommerce portals must find out the needs of their target consumers. You must never assume that customers will definitely buy online what they usually purchase offline.

That assumption will kill the platform faster than you can think.

There must be product categorisation on the platforms. Some portals can sell one category of products, while others can have a mix of products depending on the target consumers.

Define the consumers you are targeting: After knowing the products the consumers need, the targeted consumers must be clearly defined. Know who they are by economic status, gender or age, what they need, their purchasing power based on income levels, their social lifestyle, where they live or work and their technology savviness.

Find out which products they will want to shop for by themselves and the ones they want others to do for them. You can target only by their age, gender or roles such as children, women, students, mothers, girls, men, managers or professionals or by products such as cosmetics, shoes, real estate, cars, accessories, gadgets, electronics, books and many more.

Find out if they like second hand or new products. You must be clear if your target is the buyers or sellers, or both.

Know the places you will operate: Know the geography of your service area. Aside the fact that the service is driven by the Internet, there must be a strong connection with physical structures and setups. You must know where your customers are so you can know if they have access to affordable and reliable Internet coverage.

Knowing this will help you geotag or restrict your website to a particular country or set of countries instead of the whole world. You have to know the transport network of the areas to know the cost of delivery or logistics involved in reaching the customers.

Where buyers and sellers are to meet to finalise their transaction offline, the owner of the portal has little to do with where each of the parties involved can be reached.

Your processes must be easy and fast: The processes involved in your target finding any product online, initiating the purchasing decision and taking action, making payment or agreeing to pay upon delivery, and when the delivery will be made, must be easy and fast. Avoid all bottlenecks involved in serving your consumers on time and fast.

The processes must be held sacred as a promise to customers. If the customers find the processes very clumsy and difficult, they will stop using the platforms.

Your prices must be affordable: Critical to the growth of any ecommerce platform is the price offerings for the range of products. They must give the customers value for money every time.

Deals of discounts are big draws to the customers but are not the ultimate decision trigger if the processes and delivery time are clumsy and longer respectively.

Saving time and money for the buyer is part of the benefits they want to enjoy and it is the price the platform owners must pay to deliver them.

If the products are more expensive than the consumers can buy in their nearest community shop and the time of delivery is longer than they will spend in shopping, the ecommerce platform will become irrelevant and will soon die.

Engage with the right partners: You must engage in partnerships to grow the various components of your ecommerce business. This partnership must be done with businesses or service providers, delivery service providers, local shops or malls, payment solution owners and warehouses.

The whole ecosystem for sustaining or growing the ecommerce platforms must be clearly defined to suggest the type of partnership you will need. Ecommerce platforms in Australia partnered with Australia Post to deliver their products faster to their customers. This accounted for about 70 per cent of their deliveries in 2010 alone.

Use secure payment solutions: This a dicey issue when it comes to ecommerce portals in Ghana and Africa. Most buyers on these platforms do not fully trust the quality of products on the platforms let alone initiate payment before they see the products physically.

But this will change over time when the buyers have the reason to trust the sellers or the products on sale and the owners of the portals as middlemen. The use of secure online payment solutions will increase when the buyers trust sellers.

Platform must be trusted and credible: One of the ways to have trusted and credible platforms is to verify the sellers of the products on the platform. Buyers will be very comfortable if they can trust the products or the people selling to them because they have been verified by the platform owners. Images of the products on sale must be done professionally.

It is better for portals start with businesses with existing customers who want to save time and money with some toppings of convenience.
This reduces the incident of fraudsters hijacking the platform to rob potential buyers. Most of our local ecommerce platforms have become victims of fraudsters and dirty dealers. Sellers must be verified and products approved.

Running promotions to advertise platforms: It is good to create awareness through consistent offline or online advertising for your platform to attract more traffic and gain traction. But that should not be the primary focus for growing the platform.

Run promotions for discount deals or new arrivals for some verified premium sellers so buyers can try the platform to get such deals. Relevance is always the draw for customers, not the incessant advertising. Your promotion must match your portal appeal and user experience.

Fulfilling your promises: Whatever promises made to consumers or partners must be fulfilled. Fulfil the promises you have made to them so they can develop some trust for your portal and stay with you for a longer period of time. — GB

The writer is a technology consultant, Digital Marketing Strategist, Social Media Expert and Trainer.
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