With Jumia celebrating five years of existence in Cameroon. This article couldn’t have had better timing.
I decided to take a 2.0 approach to writing this article so I asked my friends to share their thoughts on the reasons why e-commerce growth in Cameroon is so slow compared to other African countries like Kenya, Nigeria, and Tanzania.
A few did.
Our first contributor, Brenda Chuinkam , had this to say:-
“I believe the lack circulation and use of Credit cards in Cameroon is one of the major reasons. Large and small e-commerce platforms use MP style credit cards or PayPal, both of which require either debit or credit cards. The majority of Cameroonians do not own a credit/debit card and a lot still do not own bank accounts and if they do, people still prefer to pay cash.
Secondly, I think a lot of people in Cameroon are still skeptical with regards to online purchases as they fear they will be scammed. They like to see and touch prior to purchasing. Thirdly, home delivery in Cameroon is a pain. Let's face it, which delivery service delivers from door to door in Cameroon? None. DHL, UPS, FEDEX etc deliver office to office and to P.O. Boxes but the delivery fees would have to reflect these premium services. Let's not even talk about potentially using CamPost”
Stephane Noutsa said :-
“I believe the major reason for the slow growth of e-commerce in Cameroon is the relative non existence of an address system, coupled with our bad roads.”
Harvard alumni Muchingam Ngwana chimed in. He take :-
“You got to see the aspect of sluggish acceptance of e-commerce platforms as a multi facet issue ranging from technological discrepancy, cultural sluggishness to innovation, conservationism on cash/carry, little government programs to revitalize the IT sector, inadequate resources for strategic marketing of these platforms and many more These are just what I think off my head.”
Summarily, the issue identified are:-
- low penetration of bank cards - the lack of a formal address system - The fear of internet scams - lack of computer literacy
Now, the Poise Take.
I agree with all of the reasons put forward by Brenda, Noutsa, and Ngwana; on the surface, those are the things to point to.
One of the promises of PoiseSocial is to go beyond the ‘what’ and explore the ‘why’ and that is exactly what I will seek to achieve here.
When the new iPhone is announced, Cameroonians are equally as exited as the rest of the world so I hate to think that we are just a bunch of people who are allergic to technological advancement. I believe we are very much open to the idea of buying and selling online and we can find solutions to many of the structural issues that can make e-commerce a challenge.
Issues like that of the lack of formal addresses can easily be solved. with new technologies and a little bit of ingenuity. I have lived in some of the most difficult places to find and Camtel has been able to find my location when I give them a hand drawn map. With newer telephones, it is even possible to send a pin of your location.
Good user interface design has made it such that if you can use Whatsapp, you can pretty much use any online e commerce site.
That said and not dismissing other factors entirely, I believe MTN and Orange are doing the most in hindering the growth of e commerce in Cameroon.
Bank accounts and credits are still expensive and inaccessible to the everyday Cameroonian courtesy of a weak banking system that is unable to withstand a larger customer base; so banks intentionally set up barriers to control their clientele. Integrating credit processing into online portals and local storefronts is definitely a bigger expense and really more complicated compared to using mobile money for which all you need is a cheap cell phone and a registered phone number. Therefore as it stands, Mobile money is currently the only established method of remote payment or online transaction processing.
Despite the promise, mobile money took quite a while to gain the current acceptance rate it has in Cameroon. MTN even had to fire and replace the person in charge of the mobile money business unit at some point. Today, there are more people using mobile money but most still use it only as a substitute for other money transfer services. It’s full potential as a micro banking and e-commerce platform is still to be exploited.
A few other other ingenious services aimed at solving the issue of remote payments have come up in the past but they have all been held up by opposition from banks, and regulators; most likely under the influence of MTN and Orange who also happen to be investors in AIG, the parent company of the most popular e-commerce marketplace in Cameroon, Jumia.
MTN and Orange are two of six investors behind Jumia, the others being European insurance giant AXA, Goldman Sachs, CDC Group, and Rocket Internet, the primary investor. You may have heard of Kaymu, another online (now defunct) marketplace that once existed in Cameroon. Kaymu was also a AIG company. AIG has recently been rebranded to Jumia and the company is valued at over $1 Billion.
So if you were ever wondering why it will be difficult or impossible for you to get the mobile money or orangemoney API for that new online retail site you have spent the last 4 years working on, there you have it. There is clearly a conflict if interest on the part of MTN or Orange in giving you access.
By maintaining a monopoly on the online retail market and doing such a poor job at it, MTN and Orange are turning off even the early adopters who we all know are the ones that try it first, and get the masses comfortable about trying. The lack of trust in the MTN and Orange brands coming from the poor customer service exhibited in other sectors of the companies have cascaded into the mobile money units. If people can’t trust you to be honest about the 1 franc that suddenly disappeared from their phone, you can be sure they will do everything to avoid dealing with you whenever possible. We all know the reason MTN and Orange are still in business today is because of first mover advantages, scale, and collusion.
If you have ever been to an MTN office for any reason, you must have noticed their thoughtless queuing system that puts you in line for two hours for something that takes 3 minutes to do. They lump someone who is just trying to buy a internet modem with people who have technical issues with their credit transfer merchant accounts.
I have gotten to a point in my life where I do not even call MTN customer service because I almost always end up less satisfied than I was before I called them. When my credit disappears, I count my loss and move on with my life.
Many times, I avoid certain transactions involving mobile money because I know if there happens to be an issue, the stress I would have to go through to resolve it is better avoided. For instance, if you get duped through mobile money, you can’t just call MTN and have them investigate the account. You have to go to the police to get a warrant or some sought of document before MTN can do anything about your case. We all know how dealing with the police in Cameroon goes.
Having hoisted a flag on the future of e-commerce in Cameroon, there is no moving forward if MTN and Orange do undergo a complete overhaul of their organizational culture; one that treats customers like beggars showing complete disregard for social responsibility.
That said, Jumia is currently in search of a new country manager. I hope they find one that can open their eyes to how much they are shooting themselves in the foot.