Safaricom’s Latest Investment is Masoko, An e-commerce Platform
In Kenya, Safaricom dominates the communication and mobile money industries. The company has, however, continued to diversify its business with Masoko being the latest addition to its portfolio.
The company has been doing quite well and its 2016/2017 financial report paints a picture of a company that is making gobs of money. That also explains why the new venture will be financed by the company.
Masoko is one of the business ventures that the local tech giant is using to build on the success of M-Pesa, the mobile money transfer service that dominates the local scene.
The goal is to make Masoko better than leading e-commerce companies in the region.
Safaricom will be the first telco in Kenya to diversify its trade with eCommerce and hopefully among the few key players who have managed to successfully establish such platforms.
Masoko is set to go live on March 2018 and word is that it will borrow from largely from Alibaba’s operational principle. Specifically, the platform will integrate mobile payments and e-retail as opposed to having inventory systems as is the case with Jumia and Kilimall.
The eCommerce platform will offer products ranging from electronics to cosmetics. It will also provide a platform for customers and traders on various social media platforms.
Safaricom CEO Bob Collymore was quoted saying that in two to three years’ time, the platform will have expanded beyond Kenya but there was no mention of markets under consideration.
He added that they do not plan to establish operations outside Africa because there are a lot of considerations and challenges.
Collymore was also quoted saying that the platform will not hold any inventory or allow anyone to sell. He said that the company will screen all merchants before giving them access to the platform.
The company will work with manufacturers and farmers seeking direct market access and at the same time reduce supply-chain inefficiencies such as transportation costs.
M-Pesa will be the main payment method but other online payment services and cards by Visa and MasterCard will apply.
To make deliveries within the shortest time possible, Safaricom is establishing partnerships with leading logistics companies. This will ensure that the delivery time is reduced considerably. This was also the basis of Kilimall’s partnership with Aramex; hence, Masoko has to do better if it hopes to meet this goal.
One of the advantages that Masoko has is that Safaricom has a significant consumer base and trust. Also, ownership and vast experience in mobile payments give the company a competitive edge.
At the moment, Masoko is undergoing in-house testing before it can be released to the market in 2018.
The e-commerce industry has gradually gained ground in Kenya thanks to increasing number of mobile and internet users. This has, in turn, been driven by the availability of affordable smartphones in the market.
Kenyans are gradually warming up to the idea of online shopping and this means that new comers like Masoko have to work towards earning people’s trust.