Pivoting and agile management to accelerate growth for digital platforms
Authored by Josphine Kiruku (Communications & Learning Co-ordinator, Youth Impact Labs) and Gituku Ngene (Post Investment & Learning Officer, Youth Impact Labs)
In the wake of the COVID-19 pandemic, technology has proven to be an enabler as more organizations and governments shift to online platforms to deliver products and services and ensure business continuity. With governments enforcing “work-from-home” directives to contain the spread of the virus, traditional models of product and service delivery have been entirely disrupted leading consumers to adopt new online shopping behavior.
Due to the reduced foot traffic in supermarkets and open-air markets, retailers are shifting to e-commerce through partnerships with existing platforms or by setting up one. Additionally, micro traders who previously depended on offline retailing, have transitioned to online platforms such as social media and e-commerce to reach their consumers. In Kenya for example, e-commerce platforms noted an increase in demand for laptops and digital accessories and home workout equipment following the closure of offices and gym facilities. Additionally, the platform has experienced high uptake in terms of smaller merchants, that is, homemade organic beauty products. As a result, the notable surge in the organic market has led to higher basket sizes on the platform with an average of USD 62.
Though the pandemic presents an open door for digital platforms to tap into new markets, it is crucial for these platforms to pivot strategically in order to ensure continuous business operation. Based on its extensive experience in working with digital platforms and recent efforts to support its digital portfolio in managing the ongoing pandemic, the Youth Impact Labs Program provides a pivoting guide to help in the decision making process. Essentially, enterprises should consider the following factors as they adjust their businesses:
- Diversify product offering
Digital platforms should consider diversifying their product range following increased demand on certain products. Currently, there is a rise in demand for sanitation and hygiene products and manufacturers have diversified their products to meet these current needs. Since there is a ready market for these products, e-commerce platforms can collaborate with manufacturers to stock their products. Digital platforms can also collaborate to foster product diversification. For example, Get Boda, an on-demand logistics platform, evolved from depending on pick up stations which have experienced lesser foot traffic, and is now focusing on fleet services and targeting essential services such as restaurants (Fogo Gaucho), pharmacies (My Dawa) and grocery businesses. Additionally, Herdy Fresh, an e-commerce platform diversified its reach by partnering with logistics platform, SendyGo which recently launched a home delivery solution to boost local traders during the Covid-19 pandemic.
2. Manage supply chain disruptions through alternative sourcing
With the government restricting movement and instituting curfews to limit the spread of the disease, businesses have experienced significant disruptions in the sourcing of their products. For businesses that rely on imported goods, the grounding of flights globally has resulted in significant delays or even lack of access to goods resulting in stock-outs. Even where goods are sourced locally, limited working times and strict local borders have translated to slower sourcing of goods. Businesses should aim to smoothen their supply chains by identifying alternative sources for their products. In the case of Herdy Fresh, they identified and onboarded new suppliers located within the Nairobi metropolitan boundaries. Even as businesses seek to ensure that sourcing chains are intact, they should ensure that the margins for their products are commercially viable while maintaining high safety and quality standards of their products.
3. Broadening merchant base
As foot traffic drops for most micro traders who depend on walk-in customers, e-commerce platforms are presented with an opportunity to act as a bridge between these traders and the end customer. Currently, e-commerce platforms are experiencing disruption to supply chains due to constrained movement, which as a result, has locked out some of its existing suppliers. This situation presents an opportunity for micro traders to find a market for their existing supply while platforms get guaranteed supply for a period of time. In light of this, Sky Garden has developed a digital infrastructure solution for micro traders to plugin and sell their wares online. This solution builds a virtual space that allows the traders to sell their merchandise from the comfort of their mobile phones and opens up a far-flung market.
Such local platforms are streamlining and professionalizing the informal sector by bringing in structures, technology infrastructure, and providing additional services to workers, including financial services, insurance, and digital payments. The platforms allow previously obscured workers to now develop digital channels in which their work and enterprises can now get a digital footprint.
4. Optimizing human resources
“Take care of your employees and they will take care of your business..” Richard Branson
It is paramount for any business to focus on the well being of its team especially in a crisis such as the present pandemic. Following directives to work from home and maintain social distancing, businesses should determine tasks that can continue functioning remotely while putting into consideration tasks that need physical movement. When it comes to remote working, businesses need to factor in the challenge of internet connectivity and affordability especially in developing countries like Kenya. It is therefore advisable for them to develop alternative channels like phone calls or support team members with an internet plan. This way, business owners are able to check-in with teams regularly.
With regard to tasks that require logistic arrangements like deliveries, these platforms should ensure high-level safety measures have been undertaken such as the provision of Personal Protective Equipment. Sky.Garden, for example, has trained its merchants and employees on safety measures when dealing with clients. Additionally, the e-commerce platform has devised alternative ways of verifying products so as to prevent human contact during deliveries.
5. Form strategic partnerships
Digital platforms should consider strategic partnerships to ensure that business continues running. One such example is a recent partnership between e-commerce platform, Jumia Kenya, and Twiga Foods, a Kenyan business-to-business marketplace that sources products directly from farmers and delivers it to urban retailers. Jumia’s 1,500,000 customers now have access to fresh fruits and vegetables from Twiga. The strategic partnership will enable Jumia to increase its fresh food offering and enable it to remain relevant as customers pivot to buying essential goods from the e-commerce platforms. Kenya’s Sendy, an e-logistics provider also partnered with Tuskys, a Kenyan supermarket chain, to facilitate home delivery for the supermarket’s customers.
Additionally, Lynk, a blue-collar job matching platform which through its partnership with Safe Hands Kenya, has been able to leverage its infrastructure and mobilization capabilities to coordinate over 800 cleaners to provide sanitation services across Nairobi’s suburbs
6. Apply for legal compliance
Government restrictions in certain geographies continue to limit the movement of goods and services provided by businesses. As enterprises pivot, it is critical to establish whether their goods fall within the list of essential services outlined by governments. Getting the necessary approvals and permits allows businesses to legally conduct business with minimal disruptions. In Kenya, businesses can acquire special passes through the Kenya Private Sector Alliance or the Kenya National Chamber of Commerce and Industry. These passes are essential for businesses that may need to operate within the curfew hours or that may need to source or deliver their goods and services outside the restricted zones.
As a result of the global economic disruption caused by COVID-19, businesses must strategically make pivoting decisions in order to survive. In some cases this will involve new partnerships or new product lines — in spite of the route taken, businesses need to operate flexibly since the season demands of it. What this could mean for some businesses is a complete shift of the business model in order to accommodate the consumer trends and ascertain business continuity.
It is important to note, however, that even as things change and governments begin to ease restrictions, the effects of COVID-19 will stretch into the medium-term necessitating businesses to remain agile and innovative in order to successfully navigate the recovery phase.
About Mercy Corps Youth Impact Labs
Catalyzed by funding from Google.org, Mercy Corps’ Youth Impact Labs (YIL) identifies and tests creative, technology-enabled solutions to tackle global youth unemployment, accelerating job creation, so every young person has the opportunity for dignified, purposeful work. In Kenya, YIL focuses on digital marketplaces and platforms that offer services to micro and small businesses; agricultural supply chain management; and digital work.
The program supports these enterprises through financial and technical support, issued in the form of milestone-based grants. Through our post-investment support, on-boarded partners also get access to advisory services to support the development of technology solutions and tailored business support service to actualize scale.
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