In my last piece I discussed the various eMarketplace opportunities that exist for us here in Ghana. In fact there is no need venturing into a business you cannot sustain in the near-term.
The fact that various eMarket models can be implemented here in Ghana does not necessarily guarantee success. As a business person doing or wanting to venture into the online commerce space, you need to consider the following factors.
One could say that in the past technology was the most daunting aspect of adopting an eMarketplace here in Ghana. This is in reference to the platform’s provider. Thankfully, such is not the case today. Also, everyone with a smartphone can log onto Tonaton, for instance, and get a deal for some used phone or laptop.
The case is however different when it has to do with industry-specific B2B models, where in some cases a firm would need to integrate with the platform. You tend to have the target firms not having the necessary technology to join an online platform, hence less participation. This will obviously affect the sustainability of such B2B models. In some cases you need technical people within participating firms to man their side of the integration, which obviously they don’t have or can’t afford.
So, as much as possible, your B2B model should consider the IT capability of participating firms.
As noted last week, there are many different models that can fit into specific Ghanaian industries. You should consider what the regulations are concerning eMarketplace ventures here in Ghana. For matters concerning electronic payments and settlements, you should be looking at GhIPSS, which happens to be the electronic payment arm of the BoG. You are definitely going to deal with people’s data — hence your concern should also be about what the Data Protection Act of the country is.
If you are seeking to create an online platform for the likes ofK. Ofori Limited, Hemelord Buildings Limited etc., then understanding regulations within the Real Estate Industry in Ghana should also be your concern.
Understanding these specific regulations will ensure that your eMarketplace model stands the test of time.
State of the economy
During the recent recession in the western world, online buying and selling recorded some high figures. This was due to the fact that many saw it as a more cost-effective way of purchasing whatever they wanted. One can save on transport fares by sitting and ordering at home, and Internet access is relatively cheaper in those areas.
Contrary to the above, the eMarketplace here in Ghana is rather seen as a luxurious way of buying an item. And so, seeing how challenging our economy is today, eMarketplaces are not going to do so well. Hopefully when the economy begins to see some growth and more people have disposable incomes, they will jump on the Internet to surf and make purchases.
You should also be in the right position to meet demand when the economy booms and demand for your service or product begins to scale up.
True value for stakeholders
The value created by an eMarketplace is very essential to encourage participation from all stakeholders. For the sellers, your platform should be that level playing ground they miss in the traditional setting to reach a large target within the industry.
For buyers, there is an opportunity to access offerings from various sellers and get better pricing for goods/services they pay for.
As you plan to introduce a B2B model within an industry, you should try as much as possible to create value for as many players as possible within it. Since they all become co-beneficiaries of value created by the platform, they will work to sustain it.
The mistake most online entrepreneurs do is to weed-out all intermediaries when setting up a marketplace; forgetting the vital role they play in the traditional model. The best solution will be to incorporate them in a more efficient way for a better value chain.
In creating an eMarketplace, you have to carefully consider how you are going to make money. One lure of ecommerce is the cheaper alternative it offers to the buyer. So your revenue stream is going to be targetted mainly at sellers.
Is your revenue stream going to be by transaction, membership or subscription? Think about this carefully. Which option will make it possible for you to cover your cost of maintaining the platform plus making some profit at the end of the day? A combination of the different income models would not be a bad idea. Seriously speaking, you are not going to start an eMarketplace for charity; else you are going to go down in no time like others have done in the past.
Indeed, one cannot ignore these factors when setting up an eMarketplace here in Ghana; you will only be folding up sooner than later if you do so.