Safaricom’s Masoko, an e-commerce platform, was launched nearly three years ago. You would assume, through fault of your own that a company like Safaricom with its vast resources and market reach would nail the space, but that was not the case as the space proved unforgiving to the carrier.
This is not to say that the carrier did not do things right: it has some of the best delivery models, especially in Nairobi, and some people lauded its long-distance deliveries too because competitors have been known to delay products. Masoko also had a big vision as we examined in a previous story, including a plan to onboard many and genuine vendors with a solid rapport especially those dealing in electronics.
All this came crashing down when Safaricom announced it was cutting off these vendors. In a short period, the platform was downgraded to an e-commerce site that sells phones and their accessories.
However, the big question is if people who are aware of the operations of e-commerce platforms saw this coming. Some of us did because there were murmurs that Masoko was not bringing in revenue, hence had to be shaken up to turn things around. The shaking up part was, as precedingly stated, a move that dropped its business partners.
Masoko was a bad idea – Bob Collymore
Previously, the late and former CEO Robert Collymore had said that Masoko, as well as M-PESA One Tap (if you do not remember it), were bad ideas that turned costly for the telco. This was a statement from an authoritative figure that was not going to be ignored. It was only a matter of time before the big axe came down to Masoko.
At the moment, Masoko is live and well, but there is no value proposition from its humble assortment of products. It even makes it a tougher sell because Kenyans have, over an extended period of time learned to do e-commerce or purchase products such as phones right. This is not 2012 when people had limited options; you had to visit a Safaricom shop for a phone, and they charged you handsomely for your purchase. This remains to be the case, but some Kenyans know that other vendors are better off due to their discounts, and perks such as buying dual-SIM phones that are not sold by the Masoko.
These issues aside, some people who were a big fan of Masoko are still suffering from withdrawal symptoms of the platform’s planned deterioration. Besides quick deliveries, Masoko staged one of the best Black Friday and Cyber Monday sales in 2018. The likes of Jumia and Kilimall are always marred with traffic and shady deals, but Masoko managed to pull the show very well.
Still a bad idea – Michael Joseph
The interim CEO, who should leave the office for Peter Ndegwa in under four months, admits that the e-commerce space in Kenya is failing to make a serious mark for a variety of reasons. Speaking to KTN, Michael said that the country still has poor infrastructure that is a logistical nightmare for these firms.
“I was not a great fan of Masoko before it was launched,” Mr. Joseph said.
The postal system is mediocre at best. Even the addressing system is only reliable in upmarket neighbourhoods – although the Communications Authority says it is finalizing a robust addressing system for the country, and Safaricom itself is trying to solve postal limitations with a new partnership with Postal Corporation where a user’s Safaricom’s number can be registered as a postal address for small fee.
“Kenya, like most other countries, does not have ready logistics to sustain e-commerce,” added MJ.
It is unknown if the carrier has a hidden trick to turn Masoko around. At the moment, however, the platform, which has since been supplemented with smartphone apps, remains unexciting.