7 Revenue Killers For African E-Commerce Businesses
E-commerce still remains the most viable tech startup model foreign investors are willing to take a bet on in Africa. Many other internet startup models have failed woefully, but some e-commerce businesses have shown high prospects through their growth.
While most of the African e-commerce businesses that have so far achieved a high national and even continental growth status have mostly been funnelled by a huge influx of foreign investment, a few smaller online stores are making some progress in their small communities.
As online stores spring up daily and strive to scale, a major problem they face is growing their revenues. Many e-commerce businesses search the internet far and wide for information on how to grow their online sales in Africa, especially Nigeria. What many haven’t realised is, instead of exclusively focusing on growing their revenues, they most especially need to identify ways to cut-off potential lost sales.
Before you race to build the structures of a house, it’s important the foundation is solid. Else, everything could eventually come crashing down. The same applies to e-commerce businesses. Before you chase sales in the competitive space, first ensure any visitor who lands on your website would not only trust what they’ve probably never heard of, but might be tempted to consider a sample purchase.
Here Are 5 Simple Revenue Killers For African E-Commerce Businesses, And What You Can Do To Correct Them:
1). Poor Website Design:
The first point of contact between new and existing visitors to your online store, is your website. People tend to trust websites that look clean and good to a far greater extent, than websites of online stores that look terrible.
In a continent like Africa for instance, trust is a major issue. So websites that kind of look good, but not really good, still make people run for the fear of been scammed. Africans generally believe that the real online stores put in a lot of money to have a professional website. But that fraudsters put up anything to get a quick jab at people’s money.
To build the first layer of trust with your online store visitors, make sure the look and feel of your online store is the next best thing out there.
2). High Product Costs:
Most Africans are low-end spenders. But most especially, people generally only want to be able to try small sums on their first purchase. If your target audience are high-end spenders, you probably wouldn’t make enough to eventually turn cash-flow positive because, most Africans who shop online are looking for good items at reasonable prices.
While the luxury or high-end e-commerce model might be big in America with the likes of Net-A-Porter, in Africa it’s still far off.
If you’re serious about making any real sales online, ensure you’re selling items many people can afford.
3). Not Enabling Guest Checkout:
People hate the pain of having to sign up just before they place an order. The stress of having to put in too much information turns a lot of people off before they get to even complete their transactions.
Along with the option to sign up, enable an option for guest checkout. This primarily requires the users to provide their email addresses only. When people consciously know they’re not going through a hectic sign up process, the chances of them placing an order increases.
Enable guest checkout to maximise your checkout rate.
4). No Option For Pay On Delivery:
While people in the western world do not have the opportunity to select a pay on delivery option during checkout, in Africa, pay on delivery is the most important option. If an e-commerce website doesn’t have it enabled, they’d experience a tremendously low amount of orders coming in.
Over 80% of Nigerians for instance pay on delivery. Many would argue they’d never pay online. To an extent, they can’t be blamed because of the terrible conditions the items they order usually arrive in (if they arrive at all), unlike in countries outside Africa when things are better regulated.
5). High Shipping Costs:
After selecting all the items you want to purchase, you then realise you have to pay a ridiculous shipping cost. Would you walk away from the website or not? Most people always choose the former.
This is a problem many e-commerce businesses are experiencing. For African e-commerce businesses especially, the excuse that the logistics companies charge a lot makes them push huge shipping costs to their customers.
A better approach would be to push half of the shipping cost to the customer, and the other half to the prices of the items. This way, you’re assured the customers wouldn’t exactly freak out upon seeing the shipping cost displayed to them.
6). Poor Mobile Experience:
It would be foolish for an e-commerce company to only have a desktop site in a continent where over 80% of the inhabitants only place orders from their mobile phones.
In summary, if your e-commerce business doesn’t have a good mobile website in Africa, you’re packing up weigh sooner than you expect.
7). Complicated Checkout Process:
Life itself is complicated enough. Making it worse by building a long complicated checkout process on your e-commerce website is a complete no-brainer. People want a simple and swift method of placing orders online. Making the process long and tedious because you want to gather so much information before a successful checkout would make you lose a lot of prospects.
You have to consider three factors before you make that African online shopping site’s checkout process complicated:
- The internet connection in Africa is mostly slow. So, making a checkout process run through multiple pages would turn people off before they complete an order.
- Some people are simply trying out test purchases. If the process gets a bit long, you can be assured you just gave them enough time to change their minds.
- People don’t like giving out too much information about themselves to total strangers. Especially in Africa.
Finally, before you make your checkout process the longest thing ever since the great wall of China, make sure you’re ready to lose out on a lot of potential sales.
You can make money from blogging by setting up a blog on WordPress or Blogger. Starting for as low as only $3.95 per month, anyone can follow this link to create a WordPress blog in minutes for a really cheap rate (this low price is only through my link). In addition to the low pricing, you will receive a free website domain (a $15 value), a free site builder, and a 30-days money-back guarantee through my Bluehost link if you purchase, at least, 12 months of blog hosting.
What are your thoughts on these 7 revenue killers of African e-commerce businesses? Please let me know by leaving a comment below.