Superplatforms: How Merchants Will Benefit from E-Commerce

Forty percent of all UPI based transactions on Paytm are driven by offline merchants. The update of UPI 2.0 is aimed especially to expand person-to-merchant payments. “Organised electronics retail, fashion and departmental stores are witnessing more traction.”

Meanwhile, on the other side of the ocean, Square Capital is partnering up with Upserve to offer Upserve’s customers -- small businesses (who don’t use Square’s core payments service) loans based on anonymous sales data and offered through the Upserve software. Square Capital is expanding its lending program beyond their core customers -- in the future other partners would have a similar data sharing arrangement.

By comparison, we’re exploring in Africa what the benefits of e-commerce, social media and networking, and digital payments, enabled by superplatforms could be for MSMEs. At this stage, the convenience, facilitation and seamlessness are much harder to see and reap for small merchants, and they are using hydrid and hi-touch approaches, which limit their bandwidth as online sellers. We are seeing some sellers discovering new income and employment opportunities through online marketplace that otherwise do not exist in their analog worlds. 

Is cashlessness “socially valuable,” even for rural and/or elderly populations? How do superplatforms ensure bringing in new customers into digital ecosystems while not locking out those who still live in cash economies? 

What would storefronts for micro-retailers, mostly one-person shop businesses be and look like in Africa? Amazon Handmade sources from 5,000 sellers from 60 countries. Would these micro-retailers be able to access these sales channels let alone their local markets?

https://www.bloomberg.com/news/articles/2018-08-28/google-partners-with-banks-to-launch-digital-lending-in-india

To the BAT trinity (#Baidu, #Alibaba and #Tencent), now come #JD.com and #NetEase. More interesting observation that we see over and over in our field research creation: China’s digital market developed “based on need rather than preference” and understanding these attributes in the market are key to winning in like markets such as #India 

This woman is a small merchant on the streets of Accra and she is stationed right next to the big banks. She uses Ecobank Pay because her customers requested it. It’s also fast and convenient since it’s hard enough to provide enough change to break big bills. 

Could the systemic disruption in the financial sector and the growing efforts by banks and the government to contain it, increase Ant Financial’s appetite for continued growth by expanding to Africa and other emerging regions?

Watch FIBR’s video on Superplatforms: Unlocking the Potential of Merchants, E-Commerce and Financial Services in Africa. There are still so many unanswered questions about their potential. Our research in Ghana, Tanzania and Kenya is to better understand how superplatforms will expand into African markets and how merchants will benefit and grow their businesses from going online.

“Facebook increasingly wants to be a platform where people buy and sell goods and services, besides connecting with friends. The company over the past year asked several banks [sic] to discuss potential offerings it could host for bank customers on Facebook Messenger, said people familiar with the matter.”

“WhatsApp has rolled out three new ways for customers to connect quickly with businesses: a shortcut button to immediately start a conversation, the ability to have businesses send you information like a boarding pass on WhatsApp, and real-time support…. “At the same time, Facebook will now display ads of businesses that link out to WhatsApp. That means that businesses can purchase ads that lead people directly to an already loaded chat with the business on WhatsApp, and they can start talking from there. Businesses can respond to customers for free if they answer within 24 hours but Facebook will charge them for any response after 24 hours.”

For the users of mobile/digital loan, we heard several criticisms, however: (a) the starting amounts were too small to be useful to meet their working capital needs and they could not wait for the loan sizes to grow, (b) most did not like having their loan balance auto-deduct from any future mobile-💰 payments they received, © some had outstanding balances on a mobile loan that they had walked away from, and (d) for new digital loan products like Branch, one person had tried and was kept waiting for approval and after two weeks gave up. 

WHAT IF Uber and other car/ride-sharing services offered micro entrepreneurs services that help them offload logistics, focus on core activities, and scale their operations? These services can include automating taking orders, managing deliveries via a fleet of drivers, communicating with customers via SMS/app updates, and processing payments. It could even bundle financing to help micro entrepreneurs access more working-capital as they scale their business. 

WHAT IF superplatforms could provide this as Advisor service to all buyers to help them realize savings? From automating price prediction (like I Google Flights and other algorithm-based airfare search apps), simplifying shipping options (like Amazon does), and even recommending products (as in Netflix’s AI).

One person bought a new smartphone which came in a sealed box, with new accessories, and a new phone body, all as expected. But upon using, he discovered the phone was not only used but damaged and dead on arrival. After a few more experiences like this, he said he no longer buys from sellers on WhatsApp.