Tuesday, May 26 2020 was the first day in two months to go out of the confinement of our homes to go to Kampala the capital of Uganda since the President of Uganda H.E Yoweri Kaguta Museveni gave stay or work-from-home directives as part of the measures to flatten the curve of the novel coronavirus disease (COVID-19). Like many Ugandans who do not work in the essential service or product lines, our eagerness to go to the city nearly made some of us sleep in our shoes. This was the second strategy to ease the lockdown as the economy slowly re-opened. We were curious to see the new Kampala City, to smell its freshness and to see how business is going, most importantly how the informal sector is faring.
We went to Nakasero market located in downtown Kampala first. It is one of the markets where the United Nations Development Programme (UNDP) Accelerator Lab Uganda launched a partnership with Jumia Food Uganda, a leading e-commerce company on May 8 2020. This market was connected to Jumia’s e-commerce platform as an experiment for sustaining supply chains for micro, small and medium enterprises (MSMEs) and connecting them with consumers online in the wake of stay-home guidelines.
Before the COVID-19 pandemic, Nakasero market was usually a busy place crowded with people reaching out for foods, vendors happily selling and farmers supplying produce to the vendors. This was not the case when we visited. Vendors were almost by themselves, some already starting to acquaint themselves with how to transact business online.
“Since the lockdown, business has been slow, yet we have been sleeping in the market as directed by the president, but we are beginning to see light at the end of the tunnel; we can now sell our produce via the Jumia digital platform,” narrated Harriet Nankabirwa, a vendor.
COVID-19 is not only a global crisis with far-reaching health, social and economic impacts, it has also tested and stretched national crisis response systems across the globe. The necessary restrictions to movements as a result of the pandemic have led to closure of businesses, affected supply chains, and disrupted the informal sector that sustains livelihoods.
Uganda’s urban markets are dominated by women and youth who largely deal in perishable food produce like fruits and vegetables. The markets are the main outlets for farm produce; they play an important role in connecting rural farmers with the urban market, keeping the supply chain for agricultural produce active.
The UNDP-Jumia Food partnership was conceptualized upon realisation that the lockdown and stay-at-home measures are affecting millions of Ugandans who depend on informal businesses for employment.
Jumia’s e-commerce platform was identified because of its existing infrastructure and system to sustain supply chains. It is built around a marketplace of logistics, distribution and payments. In the past, the company largely targeted middle-class consumers and didn’t have niche programmes targeting informal market vendors.
As we test this initiative, we would like to learn the new opportunities that e-commerce will unlock for MSMEs in the Ugandan context and monitor the consumer behaviour, trends and patterns that can feed into the national e-commerce policy.
We seek to create and sustain jobs for vulnerable groups in markets as well as in transport and distribution systems for agriculture produce, create opportunities for young innovators, promote trade and ICT industry, build smart cities and decongest urban settings. And to the consumer, the partnership delivers innovative, convenient and affordable online services while helping businesses to thrive.
On the launch day, we started off with five markets; Nakasero, Nakawa, Wandegeya, Bugolobi and Kalerwe, but three weeks into the partnership, two more markets of Naalya and Kibuye applied to join the platform, given the demand from the residents in those areas.
At the launch, the Minister of Trade, Industry and Cooperatives, Hon. Amelia Kyambadde, welcomed the offer, “This initiative will create convenient shopping, promote the growth of the ICT industry and usage and contribute to the decongestion and transformation of Kampala into a smart city that will be pleasant for all Ugandans and our visitors, the tourists.”
The minister also challenged Ugandans and micro, small and medium enterprises (MSMEs) to embrace the digital economy, “We cannot continue to sit and wait for consumers or even customers to find us in our markets; we need to go online to enable our customers and buyers to place orders for goods and services to find them in the comfort of their homes or offices. This is the new reality!”
The UNDP Resident Representative, Ms. Elsie Attafuah said, “The offer is part of UNDP’s broader effort to deploy digital solutions for business continuity through e-governance and e-commerce, as Uganda responds to the current disruptions and pressures caused by the coronavirus pandemic”. Such innovations also support the eventual realization of the African Continental Free Trade Area (AfCFTA) Agreement by connecting Uganda to markets in the region.
Jumia Uganda Chief Executive Officer (CEO) Mr. Ron Kawamara said the e-commerce platform will offer the consumers a “convenient stay home and shop service”. “E-commerce digital platforms like Jumia are at the forefront of providing the informal sector and SMEs solutions to keep running and reaching customers during the COVID-19 crisis,” Mr. Kawamara commented.
We hope to build a robust pool of knowledge, insights for the future of e-commerce and informal businesses in the region.
Scaling this model will be based on the market information and analytics from the business transactions. This will further support adapting the technology and platform work with telecom companies to incorporate simpler unstructured supplementary service data (USSD) codes, or toll-free lines and widen the reach to people who are not technology-savvy.
We envision tracking the growth trajectory of the actual informal businesses that will be supported through monitoring, learning and evaluation. We wish to also include Business 2 Business (B2B) distributions and support the entire value chain through linking farmers to markets. Leveraging the existing farm credit unions and village saving groups to congregate and sell merchandise from farmers at a larger scale and eliminate the middleman.
As we roll out this this experiment, we are curious to learn from it and some of the learning questions include;
1. If we connect informal market vendors to e-commerce platforms, will this boost their daily incomes, ensure business continuity during COVID-19 and beyond?.
2. Will the e-commerce platform change consumer behavior?
3. What is the readiness of informal markets to adopt technology and e-commerce platforms?
4. What is the overall impact of the e-commerce platform on the vendor’s livelihood? (What can it or cannot do?
Watch out for our subsequent blogs as we learn together.
By Deborah Naatujuna, Head of Exploration; Hadijah Nabbale, Head of Solutions Mapping; and Berna Mugema, Head of Experimentation