E-commerce remains the most viable technology startup business model foreign investors are willing to bet on in Uganda. Many e-commerce startups in Uganda have failed woefully, but a number of them have shown some prospects through their growth.
While most Ugandan e-commerce businesses that have so far achieved a high national status have been fueled by a huge influx of foreign investment, a few small e-commerce stores are making significant progress in their small communities.
As new online stores keep coming up every day and strive to scale, their main problem is growing their revenues. Many e-commerce startup owners flock to the internet searching for information on how to increase e-commerce sales in Uganda. What many of them haven’t realized is that instead of exclusively concentrating on growing their business revenues, they most especially need to find ways to cut off potential lost sales.
Before you race to build the structure of your house, you need to ensure that the foundation is solid; otherwise, everything could crash down sooner or later. The same applies to eCommerce or internet-based businesses. Before you embark on chasing for sales in this competitive space, ensure that any visitor that lands on your ecommerce website is tempted to make a purchase.
In this article, we will discuss seven 8 revenue killers for Ugandan e-commerce businesses and also share valuable tips on how to mitigate their impact.
Top revenue killers for Ugandan e-commerce businesses
The ultimate goal of every e-commerce store is to generate revenue. However, certain factors hinder the growth of e-commerce business leading to a loss or decrease in revenue. In Uganda, where e-commerce is growing at rocket speed, business owners must be aware of these revenue killers in order to avoid them and maximize their revenue. Below are 8 common revenue killers for Uganda e-commerce businesses:
- Poor website design
- High product costs
- Not enabling guest checkout
- No option for paying Cash On Delivery (COD).
- High delivery costs
- Poor mobile experience
- Complicated checkout process
- Poor customer service
1. Poor website design
The website is often the first impression that visitors get when they visit your online store. This first impression can either build or break visitors’ trust in your eCommerce business. In Uganda, trust is a major issue for online shoppers due to the prevalence of scammers who create fake shopping websites aimed at cheating people out of their money.
To build trust among your target audience, having a visually appealing and professional-looking website is important. This would help establish the credibility and reputation of your e-commerce store with potential customers.
A poorly designed website can lead to a high bounce rate and low conversion rate. For instance, if your e-commerce website has a cluttered user interface, hard to navigate, is not mobile-friendly, or takes forever to load, visitors are likely to leave without making a purchase and may never return.
To prevent this, you should invest in creating a high-quality website that is user-friendly, visually appealing, and mobile-responsive. A good and visually appealing website can create a positive first impression that encourages visitors to stay longer on your website, explore your products, and make purchases.
2. High product costs
Most Ugandans are low-income earners, thus low-end spenders. But most especially, Ugandans generally only want to be able to try small sums on their first purchase. If your store targets an audience of high-end spenders, you won’t probably make enough to eventually turn cash-flow positive. This is because most Ugandans who shop online seek good products at low or reasonable prices. While the luxury or high-end e-commerce model works well in developed countries like USA, Canada, and UK, it is still far off in Uganda. If you are looking at making real sales with your online store, consider selling items many people can afford and are willing to buy.
3. Not enabling guest checkout
People generally hate forcing them to sign up before placing an order. The pain of having to provide too much information turns off a lot of people before they complete a transaction. This is especially true for customers who are making a one-time purchase and do not want to go through the hassle of creating an account.
Allowing guest checkout, along with the option to signup, can maximize your checkout rate and also increase the chances of a customer completing a purchase. Guest checkout would require a customer to enter only their email or phone number.
When people consciously know they aren’t going through a lengthy and hectic signup process, their chances of completing an order increases.
4. No option for paying Cash On Delivery (COD)
While people in Europe and USA don’t have the opportunity to select pay cash on delivery during the order checkout, in Uganda, where e-commerce is new, pay on delivery is the most important payment option. Any online store that doesn’t have this option enabled would experience a tremendously low amount of orders. Over 95% of Ugandans prefer paying on delivery because of rampant online shopping scams and product quality issues. Customers can’t be blamed because of being cautious about scams and the terrible product qualities Uganda online stores offer.
To get people accept online payments, online retailers in Uganda need to improve their product quality by carefully selecting and sourcing their products from reputable suppliers and also educating their audience on how not to fall for scams.
5. High delivery costs
After a customer selecting all the items they want to purchase, they then realize they have to pay a ridiculous delivery fee, which makes them walk away. Some retailers even try to make a profit from the delivery fees itself by hiking the cost. One would wonder whether they deal business of logistics or e-commerce.
Many ecommerce stores in Uganda, including big ones, have this problem. They give an excuse that logistics companies charge a lot, making them push the huge cost to customers. Moreover, most don’t offer consolidated delivery as they charge a delivery fee for every order a customer places.
A better approach would be pushing half of the delivery fee to the customer and the other half to the final price of the item. This way, customers wouldn’t freak out seeing the delivery fee displayed to them.
6. Poor mobile experience
It would be foolish for an online retailer to have only a desktop site while targeting customers in a country like Uganda, where over 85% of the population only place orders through their mobile devices (smartphones). With a majority of Ugandans using their mobile devices to shop online, online retailers need to invest in mobile apps or mobile-responsive websites.
A poor mobile experience, unresponsive design, poor navigation structure, and slow loading speed can make potential customers abandon their shopping carts and look for alternatives.
If your e-commerce business does not have a good mobile app or mobile-responsive website, you are packing up way sooner than expected.
7. Complicated checkout process
Life itself is complicated enough, and making it more complex by building a long and complicated checkout process on your online store is a complete no-brainer. People don’t want complicated checkout processes.
They want the simplest, most straightforward, and swiftest way of placing orders online. Complicating this process just because you want to gather a lot of information from customers before they place orders will make you lose a lot of prospects.
Keep your checkout process short and easy. If you want to make your checkout process too long, like River Nile, make sure you are ready to lose hundreds, if not thousands, of potential sales.
8. Poor customer service
Ugandan online retailers have the worst customer service. They don’t respond to inquiries on social media, don’t pick up calls, or take ages to respond to customer queries.
And in most cases, if they answer, they will always respond with unhelpful responses that are full of emotions. Some have live chat features on their stores but never respond to inquiries.
If online retailers can’t have in place a customer care team that promptly responds to customer questions, they should be ready to miss a lot of sales.
Final words
There you go. Eliminate these 8 revenue killers for Ugandan e-commerce businesses and see how sales will skyrocket. These include poor website design, high product costs, not enabling guest checkout, no option for payment on delivery, high delivery costs, poor mobile experience, complicated checkout process, and poor customer service.
If you avoid these revenue killers and focus on delivering a seamless shopping experience, your online can thrive and grow bigger than your expectations.
What are your thoughts on these eight revenue killers of Ugandan e-commerce businesses? Please let me know by leaving your comment below.
