Tuesday, December 09, 2008

One more stab at online business

I first discovered Microsoft Encarta in 1997, and what a joy that was. A digital repository with seemingly endless ways to satisfy my hunger for knowledge. Being a rap obsessed teenager it did not take me long to check what Encarta said about hip-hop. I found an article on Grandmaster Flash considered the grandaddy of hip-hop (at least by Encarta). In the article there was an audio clip of one of his most popular tunes 'The Message' which was later popularly resampled in 'Can't nobody hold me down' by Puff Daddy and Mase. One line of that great song in particular comes to mind right now "can't nobody hold me down... ohh no I got to keep on movin"

And so it is with me, I have continued with my dream of promoting online business in Kenya. My latest effort is Incorporator, an online company formation service I have helped design, create, market and manage for a business services company. I consider this one of my most comprehensive works in e-commerce: with aspects of cookie-based shopping carts, payment processing through m-pesa, ordering through a secured web, and shipping and handling of products using courier firms. In brief, technically the product works.

The real test however is whether the business model works. One thing I am hesitant about is the issue of payment. I am yet to see whether Kenyan shoppers would be comfortable paying KSh. 15,000 (about $190) online with their order for a product that they have yet to touch, feel, and see physically. Some alternative ideas I am entertaining in case this doesn't work out are: cash with delivery, or setting up of branches/drop-off money(pick-up package) zones.

Right now though things are looking up, and the low cost barrier flagship product (1-day company name search) which costs only KSh. 200 ($2.50) has been getting a lot of activity. Hopefully it will help build the trust and customer relationships that such a business necessarily needs to build.

Watch this space for updates.

10 comments:

Ssembonge said...

IMHO, the future of e-commerce lies in credit cards. You may have to form a patnership with someone in the US* to accept credit cards.
The person in the U.S would register the business here, open up a merchant account and you set up a gateway on your website. All the transactions will be processed here.

Each transaction will cost approximately $0.30 plus 3% of the selling price. The gateway goes for another $20 - $30 per month. You will then have to find a way to remit your money to Kenya. BTW, you don't need a gateway for paypal so you can have the buyers go through paypal website.

I would recommend paypal business premier account. Comes with a Visa card that you can use to access your money in Kenya.

As to what you would sell online, that is another matter altogether.

*Business costs in the US are much lower than Europe to foster entrepreneurship.

Ben Mkamba said...

I took a look at your site and it seems really impressive. However, and this is something that intrigues me, why is there no biographical or other personal info about you on your site? This is a common omission on a majority of Kenyan sites where no names address's, numbers or any other information is displayed. Why is this? How do you expect people to trust you and give you their money if u cannot reveal who you are comprehensively and by so doing stand behind your product/services? Trust a crucial element in all business seems to be a serious impediment to e-commerce in Kenya.

startupkenya said...

@Ben

I agree with you 100%. I will make sure I put up this info which at this time I will blame on an oversight. In my defence, I have placed such info on my main website www.softlaw.co.ke

startupkenya said...

@Ssembonge.

Your opinions are always valued, thank you.

You're probably right about the credit card. The bigger market for such a product might lie outside Kenya's borders at this time.

If you might have a proposal on how to go about this/ who to partner with; I'd be happy to listen. Please send me an email on my address harrykaranja at yahoo dot com.

Concept said...

@Startups,

I have checked your website and the idea is great as most of us would rather engage 'a professional' to deal with the 'bureaucracies' at Sheria House.

Kudo's.

UrXlnc said...

hey there startups

decided to follow up your from elsewehre to hear

and its worthwhile and good reading this blog and all the other IT and entrepreneurial initiatives, (softlaw, amani, lawsofkenya, kenyancompany)

will definitely be paying attention to these sites

Questa Quenna said...

Electronic commerce that is conducted between businesses is referred to as business-to-business or B2B. B2B can be open to all interested parties (e.g. commodity exchange) or limited to specific, pre-qualified participants. Electronic commerce that is conducted between businesses and consumers, on the other hand, is referred to as business-to consumer or B2C. This is the type of electronic commerce conducted by companies such as http://www.infysolutions.com

Anonymous said...

registering a company is one of the last thing entrepreneurs would think about. The first thing is to find an idea with a revenue stream and then, once you have that, you register the company, but I don't see why anyone should go through you to do that.

I'd rather do it myself to ensure that everything is in order. I wouldn't rely on some service to do this for me.

Empower Kenya said...

@startupkenya
I have been using Mpesa and Zap for my biz and so far so good.
I am not sure about Kshs. 15k but for 2-5K my clients do not have issues sending me the money before they see the end product. One thing that I make sure I do though is keep them updated on my progress so they can see value before sending the money.
all the best.

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