Covid-19 accelerates shift to e-commerce

The Covid-19 pandemic caused storefronts to close for months without operations across the world due to lockdown measures and restriction on movement. That has caused what could be described as an e-commerce boom, with many people and businesses now shifting to digital. DMM.HeHe, one of the largest players in the e-commerce industry, has benefitted from this shift. Since the pandemic hit, Shypt saw a 200 per cent growth in gross merchandise volume (GMV) – total value of merchandise sold for the stores they power, according to Clarisse Iribagiza, the chief executive of DMM.HeHe. “We also saw a 30 per cent user growth,” she said. DMM.HeHe runs Shypt, which is an inventory of e-commerce businesses in Rwanda. It operates 2,000 square metres of warehouse, which allows traditional businesses to leverage the infrastructure to shift to e-commerce. When the pandemic hit Rwanda in March, the government imposed lockdown, and businesses temporary shut doors. Those that were operating online saw an opportunity, as the government encouraged online shopping. “When the Covid-19 pandemic started and when Rwanda started the lockdown, we have seen a growth up to 30 per cent in terms of number of orders,” Albert Munyabugingo, the Managing Director of Vuba Vuba, a food delivery service said. Munyabugingo told The New Times that they have also seen a 50 per cent growth in new customers ordering with Vuba Vuba, a platform that took over after Jumia Food failed operations. “We were having many new restaurants on board, people wanted to have supermarket essentials and groceries and many more delivered at home. We were having high customer demand to satisfy because there was less movement by then,” he noted. The same insights are shared by Remy Lubega, the owner of Kimironko Market, a web platform opened during pandemic to allow people to shop groceries online. “When we started we were making approximately 30 orders a month and today we have more than three times so it’s been a gradual growth,” he noted. Growth for Kimironko Market was driven by Irish Potatoes, chicken, beef, and tomatoes. For others like Vuba Vuba and Shypt was driven by famous pop-culture products such as Pizza, burger, with a good number of people ordering groceries in general and Mexican cuisines. Is growth sustainable? The biggest challenge for e-commerce has been onboarding new customers as traditionally people love to walk into storefronts and get a physical taste of what they want. The question is whether e-commerce businesses will be able to maintain growth and retain new customers who, perhaps, didn’t have any other option but to go digital. For instance, currently, when people are allowed to move during day hours, the growth Vuba Vuba had during lockdown was not maintained in full. “We had a downfall of 12 per cent in terms of daily orders,” he said. Leonard Mungarulire, an e-commerce expert believes Covid-19 was an opportunity for companies to fast-track the implementation of their e-commerce plans. “By 2019 we had seen a number of SMEs that had made a switch to e-commerce and the growth you see is a result of investment in digital infrastructure,” he weighed in. Mungarulire doesn’t necessarily believe the Covid-19 induced growth will be sustainable, but he thinks those that are willing to try to create value addition will disrupt brick-and-mortar stores. This means e-commerce businesses will need to master how to package and market online, logistics and distribution, payment systems, as well as regional markets as opposed to being limited to the domestic market. “Look at how Irembo has evolved and how citizens are now demanding services online. It’s possible that the same can happen for e-commerce,” he said. A shift from traditional shopping, Lubega compared it to “killing a transition of people wanting to go to the market the way they have been doing for so long to which some actually is an experience,” while others see it as a threat. “That preset of mind combined with the now tech process of filling in details for a few minutes to have your transaction verified, processed and delivered still is a struggle,” he asserted.

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Covid-19 accelerates shift to e-commerce