Insufficient stock and poor quality of some products is hindering e-commerce in Rwanda, which has seen the closure of online trade giant Jumia.
Jumia Rwanda — a subsidiary of the pan African e-commerce company Jumia Group, which operates in 15 countries — closed its business late last year.
The platform allowed retailers to list their products, but some shoppers complained that the products they ordered would not get to them as advertised.
In an interview with Rwanda Today, Alfred Munyabugingo, country director of Jumia Food, the sister company of Jumia Market, didn’t address concern over the quality of products, but cited stock unavailability as a big challenge.
Despite an increase in the number of start-ups, the exit of Jumia, which operates in many African markets, has cast a shadow over local online trade markets.
E-commerce companies are competing with shops that sell similar products and it is difficult to attract consumers who have a habit of buying items in physical shops.
Kasha Inc., which sells healthcare products to women, has a different business model as it has its own physical store. Christoph Bichsel, technical co-founder at Kasha Inc., said the high cost of some imported products hampers their business.
In an interview with Rwanda Today, Mr Bichsel who previously worked for global online retailer Amazon, said “the combination of better prices and products” is what makes e-commerce firms successful.
DMM.hehe ltd has recently developed an e-commerce platform that works like a directory site for connecting retailers to consumers. The company works on a model that is similar to Jumia Market.
The tech company said its platform “enables retailers in Rwanda to run smart businesses and reach more customers.”
Most e-commerce companies operate like commission agencies as they showcase products that belong to different companies.
“In most cases the e-commerce platforms don’t know much about the products or the sellers,” said an employee of DMM.hehe ltd.
“Our company is dedicated to good customer service and we also have a good return policy,” she added.
Some factors that slow online business are rigid consumer habits, high Internet costs, poor use of an address system, digital skills gap and competition from offline shops and global e-commerce retailers.