- Social commerce may seem like a more foreign concept but it is widely used across Africa
- Online shopping has gained more popularity during the Covid-19 crisis, turning social networking platforms like Facebook and Instagram into business tools
- Social commerce- which is abbreviated as s-commerce- represents the integration of shopping and social media
When the Covid-19 pandemic hit back in 2019, a majority of individuals were forced to turn to social media platforms in search of goods and services.
While most people view this as the growth of e-commerce across the globe, it also gave rise to the growth of social commerce.
Social commerce may seem like a more foreign concept but it is widely used across Africa.
Online shopping has gained more popularity during the Covid-19 crisis, turning social networking platforms like Facebook and Instagram into business tools.
Social commerce- which is abbreviated as s-commerce- represents the integration of shopping and social media. This is any form of social media that facilitates the buying and selling of goods and services online.
Types of social commerce
There are seven types of social commerce that business owners are currently using to upscale their businesses.
These include peer-to-peer sales where individuals communicate with each other and sell directly to other individuals, social network-driven sales which occur when a product is referred to via a social media website, such as Facebook, Twitter, or Pinterest.
Group buying is another type of social commerce. It involves websites that present customers with the possibility of a reduced rate if individuals agree to make the purchase, peer recommendations which involve sites that aggregate user reviews of previous buyers that influence the purchasing decision of potential customers.
Others are user-curated shopping which are sites that give users an opportunity to create and share product lists, participatory commerce where customers have a role to play in the production process and social shopping where there may be a chat option that allows individuals to exchange advice and discuss opinions.
While Social commerce is still in a stage of infancy, Facebook, Twitter, and Pinterest are continually trying to figure out how to bring direct transactions to their platform.
Online retailers are also experimenting with new models and different marketing strategies to increase their sales and customer satisfaction.
Data by Statista.com reveals that as of January 2021, countries in Northern and Southern Africa had the largest share of social media users in Africa.
“In Northern Africa, 45 percent of the population used social media, while in Southern Africa this figure stood at 41 percent. In Central Africa, only eight percent of the people used social media, the lowest rate across Africa, the lowest regional share worldwide,” Statista noted.
The increased use of mobile phones and access to the internet across the continent has largely facilitated the growth of social commerce across the continent.
This has seen the rise of new social commerce platforms across Africa. A good example of this is Kenya’s Tushop.
The firm which enables group-buying of fast-moving consumer goods (FMCGs) has secured $3 million in pre-seed funding to expand its operations across Nairobi.
Tushop which uses community leaders to collect orders from neighbours and supports last-mile delivery services was founded by Cathy Chepkemboi last year.
“We are going to scale across Nairobi, and because it is an operationally intensive business, we [immediately] need more warehouses and delivery trucks. We are hiring and also improving our technology and our agents’ channels to make the experience even better,” Chepkemboi said.
According to Cathy, the community leaders have virtual shops where their neighbours can place orders which Tushop aggregates into bulk orders for manufacturers and producers.
She added that this arrangement saves the shoppers up to 60 percent in savings, even when the community leaders earn their sales commissions.
The firm is planning to use the new round of funding to grow its operations in Kenya’s capital, Nairobi, before expanding to the rest of the country.
Chepkemboi launched Tushop following her departure from Unilever [Kenya and UK], and Moko, a furniture startup in Kenya. She says that it was during her stint with Unilever – Kenya that she recognized the fragmentation in Kenya’s retail sector, adding that logistics was one of the challenges that led to the high cost of essential goods in the country
“I was in the field distributing products and could see what happens on the ground…I could also immediately tell that if we were in direct contact with the customer, the cost would be lower and we could do more targeted promotions or marketing. This led to what we are doing now, sourcing from manufacturers and selling directly to consumers,” Chepkemboi said.
The new round of funding led by 4DX Ventures had participation from JAM Fund, Breyer Capital, Chandaria Capital, TO Ventures, Golden Palm Investments, FirstCheck Africa, and DFS Lab.
“We think that the market opportunity for Tushop is incredibly large, and that Cathy is the right founder to go after it given her deep understanding of the market, and impressive execution and growth thus far. We’re thrilled to join such a strong team of other investors and advisors to help Tushop become the dominant player in group-buying across Africa,” said 4DX Ventures, managing partner Peter Orth.
Wasoko (formerly Sokowatch) also joined to make their first strategic institutional investment.
A number of angel investors including Olugbenga Agboola (GB); Flutterwave CEO, Raja Kaul; Sundial Group president, Eli Pollak; Apollo Agriculture CEO, and Ida Mannoh; Chipper Cash director of growth, also took part in the round.
Tushop joins the growing list of startups that are digitizing the retail sector in Kenya including Marketforce, whose RejaReja app makes it possible for informal merchants to order and pay for inventory digitally.
Wasoko, also in the same space as RejaReja, operates by distributing FMCG from suppliers to retailers.
The difference between the two is that RejaReja, unlike Wasoko, is an asset-light distribution platform- it does not own capital assets like warehouses and delivery trucks; these are provided by its partners including manufacturers and distributors.
Tushop is one of the first social commerce platforms in the Kenyan space directly sourcing from producers and delivering to shoppers.
“We provide predictive delivery of affordable high-quality goods including fresh produce. And the way we’re able to do this is by working with community leaders, who gather orders from the neighbors and manage last-mile delivery. Our value proposition here is to provide our customers a way to shop more cheaply and conveniently. We are cheaper than retail,” Chepkemboi said.