Conquering the last frontier

To make Masoko a success, Safaricom is leveraging the strength and reach of its network, customer base, and partnerships with vendors

07 Sep 2018 . 7,763 Views

At Safaricom HQ3, in Nairobi’s Westlands area, a platoon of 50 is hard at work, split into teams that are working on the website, logistics, customer care, sales and marketing.

It’s the home of Masoko, whose young team has over the last nine months been quietly learning crucial lessons as they build the foundation on which the blossoming e-commerce business will grow.

Sharon Holi, the Head of E-commerce at Safaricom, sums up their vision: “We want to be able to deliver anything across the country. If I’m sitting in my home, whether I live in the farthest corner of Kenya or a major town, I should be able to purchase or sell anything I wish as long as I have connectivity.”

It’s a vision that took root not too long ago, and one that Safaricom has highlighted as a key growth opportunity as it seeks to transform into a business fit for the future. Which is to say that Safaricom does not view itself as your average telco selling voice, data and SMS; it views itself as much, much more.

This would explain the decision to venture into e-commerce with the launch of Masoko in November last year, a move that was expected to shake up Kenya’s nascent e-commerce scene. Like any other e-commerce platform, Masoko offers a wide range of goods and services that allow customers to enjoy the ease and convenience of online shopping.

“Our vision is to democratise retail, giving users a variety to choose from and the flexibility to send shopping home or to relatives or loved ones during a break at work, a ride in the matatu or from the comfort of their homes. But more than that, we want to take Africa to the world,” says Sharon.

So far, there has been some remarkable progress.

“We’ve actually delivered to 45 out of 47 counties in Kenya. The only places we haven’t received orders from are Samburu and Marsabit. For now,” she says.

So what makes Masoko different from other players in the market?

Unlike your average start-up, the platform rides on Safaricom’s countrywide network, built over the 18 years of the company’s existence. When you factor in connectivity (Safaricom’s 3G network covers close to 90 per cent of the country while 4G connectivity is available to 35 per cent of the population), nearly 30 million subscribers and a 150,000-strong M-PESA agent network, you begin to see why Masoko has an advantage over the others despite being the newest kid on the block.

“We are uniquely positioned to widen and deepen e-commerce in Kenya, where majority of sales still take place from physical outlets such as kiosks, supermarkets and the local mama mboga,” says Sharon, adding that the plan is to position Masoko as a centre of excellence in Kenya, using the lessons learned and leveraging the strength of the Vodafone brand and sister companies across Africa to expand across the continent, often referred to as the last frontier of e-commerce.

“After we do that, we’ll be able to make this a truly world-class marketplace. Anybody in Africa will be able to sell their goods and buy anything across the globe from this platform,” she says.

But underneath the optimism is the mounting pressure to scale fast and succeed even faster, which has made the last nine months a period of much learning for Sharon and her team.

The biggest lesson: it is not easy to change customer habits, teach vendors how to make one sale at a time and package the product well, or ensure that every single order gets to a customer within the promised 24-72 hours no matter where they are in Kenya.

“What we have done is take time to understand that we need to invest in putting in the right systems, the right resources, the right partners, and then we can easily upscale off the back of that,” says Sharon. “We are aware that we cannot succeed overnight, so we’re learning to be patient with ourselves as well.”

The team draws inspiration from Safaricom’s own growth story – from a tiny department at the now defunct Kenya Posts and Telecommunications Corporation to the giant it has become, with products such as M-PESA now a household name in Kenya and beyond.

“If you think about M-PESA, when we first started, it was with a very simple concept: send money home. That concept grew and Kenyans took it and turned it into something else, and now we have features such as international money transfer, global payments and Lipa na M-PESA, which you can pay all your bills and shop with,” says Sharon.

Every two weeks, Masoko rolls out a new feature on the website, improving the experience and options for users as it sets the foundation on which the platform will scale and grow, taking advantage of the numerous opportunities presented by a market that is yet to become saturated.

According to the team’s own research, market penetration of e-commerce in Kenya doubled between 2016 and 2017, making this a fantastic time to get into that space. Rising smartphone penetration, Kenya’s youthful and increasingly tech-savvy population only serve to sweeten the proposition.

It sounds easy enough: there’s demand, a gap and a solution. But at the back of Sharon’s mind is the entire ecosystem of stakeholders required to make Masoko successful: the staff, shareholders, management and leaders, and most importantly the customers, manufacturers, suppliers, vendors and logistics partners.

The journey ahead is long, and challenging, but with focus on the long-term and an unwavering commitment to their vision, the team celebrates every milestone.

“Anything great must begin small and if you build it in a way that is sustainable, if you build it in a way that can flourish, with time you will see it leap into something that is much bigger,” she says.

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