After experiencing an increase in activity amid the COVID-19 lockdown, what’s next for local e-commerce businesses? Can they maintain the momentum?

The New Times’ Hudson Kuteesa had an interview with Demilade Oluwasina the Digital Economy Programmes Lead at the African Leadership University (ALU) in Rwanda to discuss the lessons learnt from the lockdown as far as e-commerce is concerned among other factors.

Excerpts;

During the COVID-19 lockdown, we have witnessed arguably the greatest e-commerce activity in the country. Could you say this has been an eye opening in regard to the potential of e commerce?

I think most players who are active in the space including Government and entrepreneurs have always known the potentials and benefits of e-commerce. There hasn’t just been the sufficient conditions and time for that to mature.

What we have seen during COVID-19 is the acceleration of that maturity due to the current conditions. All other factors that prevented e-commerce from taking off took a back seat because of e-commerce (and in this case, domestic e-commerce) became fitting for these times- It works well for physical distancing, contactless transactions among other things prescribed to prevent the spread of the coronavirus.

For some who have previously displayed skepticism of buying online, they have now taken the first step to experience it. While e-commerce presents value in more stable times, right now, we are more convinced of its benefits than ever.

What lessons stood out for you in regard to e-commerce during the lockdown?

There has certainly been a lot to learn and these lessons provide us an opportunity to grow stronger than ever before. Among other things, one particular lesson specifically for businesses is to understand the trends and act on them. Digital transformation was upon us even before COVID-19 and now, more businesses will take it serious. During this period, the businesses that have captured the gains of e-commerce and digital trade the most are those that already had in place capabilities to serve customers digitally.

This can mean being accessible to your customers via digital platforms. But it can also mean having digital versions of your products/ services and of your business models as well. This, for businesses could result in additional revenue streams during more stable seasons. In tourism and sightseeing services for example, virtual guided tours would be a great product to sell at this time. We’ve witnessed innovation from certain businesses as well- an example is a restaurant that has been offering online cooking classes in addition to shipping the required ingredients to the customers. It is certainly an lesson on how businesses can use digital tools to innovate and extend their business models.

The situation came at a time when perhaps local e-commerce companies were not ready for big activity.  How do you rate their performance over the lockdown?

We must commend the agility of many e-commerce companies. Many of these businesses are working harder and navigating payment and logistics challenges to reach existing and new customers. It is not just existing e-commerce companies but also other traditional companies who have now developed their own form of digital service channels in the midst of this crisis.

So, certainly, there is some positivity and resilience displayed in this regard. It is far from perfect because many of these companies that did not anticipate the volume of demand and they are now hastening to develop capabilities to meet the needs. Some companies are experiencing struggles including extended delivery times, payment challenges, incomplete inventory among other things. So, while we highlight the commendable efforts of businesses during this short term, there needs to be more attention paid to delivering seamless transactions and ensuring excellent customer service as well.

Do you think this situation is going to set pace for the e commerce industry going forward? If yes, how? What may be the picture of our e-commerce land scape post lockdown?

I think that this will be positive for e-commerce, not just because we have realized the benefits of e-commerce in this season but also because the world as we know, might never fully return to the normal we were used to. People might be practicing physical distancing for a while and limiting unnecessary contact.

 This might not be just for COVID-19 but will likely do so with a consciousness of protecting themselves from infections in general. The reduction in the use of physical cash and reliance on digital payments will also increase. Domestically, I think we will initially see a rise in the number of e-commerce businesses and e-commerce versions of many businesses perhaps to a number that is more than what the market can accommodate.

However, that will gradually even out as strong marketplaces will also rise to provide multiplied efficiencies in payment, logistics and other areas that several small businesses on their own might not be able to deliver. Many more of us will likely prefer to relax at home on the weekend and order things to be shipped to us instead of spending hours of time, getting dressed, fueling your vehicle, going to the market and risking exposure.

We would rather invest that time productively. Businesses should preserve these gains now by building solid relationships with customers through excellent service deliver and providing other differentiated benefits.

What can be the opportunities in the ecommerce space in the local economy?

During this situation, e-commerce has come to represent an answer to protecting people’s health- Shop from home and stay safe. That is likely not going to go away. Indirectly and in the longer term, these health savings will reflect on the economy whether through less spending to treat diseases or having a physically healthy population that can produce. E-commerce will foster increased trade and thus increase in the country’s GDP.

 E-commerce will help unlock new demand by improving access and inclusion by getting more products sold to more people in new areas. Also, from this growth in domestic e-commerce, we are likely to see increased exports and cross-border e-commerce. The other part of e-commerce, which is the "e”, which we call digital.

As e-commerce uptake spreads and people are more prone to online transactions, they will use digital platforms more for other needs and services. These combined activities will accelerate digital transformation as well as the gains of digital transformation including increased contribution of the internet to GDP (iGDP). In addition, more value sectors will be unlocked and more efficiencies will be captured. We will see these efficiencies multiply the returns and gains from different industries in the country. These will trickle into other positive effects include job creation and income generation.

Generally speaking, what are the main hindrances in African countries, specifically Rwanda concerning the use of e-commerce?

There are the infrastructural and policy challenges which we cannot ignore. These include issues like connectivity, logistics and payments. But there are also other factors like culture and trust which on the buyer’s side still presents a huge impediment.

More education however of consumers especially in the older generation (many of whom are decision makers when it comes to purchasing) will be required as well as consistent adherence to quality and excellent service on the side of businesses. Generally, on the side of businesses as well as policy makers, data is a great hindrance. In Africa, not having a sufficient snapshot of the e-commerce activity and opportunities makes it difficult to formulate effective strategy or find the gaps that need to be filled.

What do you think government and policy makers need to do for e commerce after this situation?

There is considerable positive effort already going into areas that will further spread the uptake of e-commerce. We have seen the Government encourage cashless payments and promote the use of e-commerce. Going forward, there needs to be continued and increased capacity building for entrepreneurs to not only be able to set up e-commerce/marketplace platforms but to manage the same for profitability and deliver excellent services to consumers.

As a part of this, the Government and policy makers should continue to stimulate collaboration and knowledge sharing as well as partnerships that will grow the capacity of businesses. Policy makers should continue to promote policies that not only protect but equally enable both consumers and businesses to effectively carry out online trade. This will include policies in payment, internet access and connectivity, data protection and more. Government and other players should continue to invest in connectivity and enabling people to access the internet. The #ConnectRwanda initiative is a laudable one that further increases the benefits of e-commerce and digital transformation to more people. Again, logistics, payment infrastructure and data collection should be improved.