Analysis

BIG STORY! How Covid-19 boosted Uganda’s online businesses

Covid-19 lockdown that reduced physical meetings majorly helped the online transactions to thrive and are becoming common among Ugandans (PHOTO /Courtesy)

KAMPALA — According to data, there are over 12 million internet users in Uganda and the digital space has continued to be a powerhouse. In some instances, it is a driving force in social, political and economic aspects in the lives of this country.

This is a clear indication that, if one uses the internet in a productive way, these numbers can translate to potential clients.

Covid-19 lockdown that reduced physical meetings majorly helped the online transactions to thrive and are becoming common among Ugandans.

Industries such as entertainment and SMEs, largely depend on social media in the form of e-commerce trade and advertisement on Facebook, making the platform a virtual marketplace for economic benefits as some people use the internet and social media in particular to pass time.

Faruk Leo Muhindo, the proprietor of Bamuda Shopping Centre was operating a restaurant before the Covid-19 lockdown, but with the event of the lockdown, he lost many customers due to the Covid-19 restrictions.

“The coming of the lockdown was a disadvantage or a disgrace to most of our businesses, but some of us believe the coming of the lockdown has increased the use of internet much more than ever before,” he explains.

Muhindo says he had to forge the way of remaining in business even in uncertainty during the lockdown. Using the Internet was the only solution during this difficult time that had shaken not only Uganda, but the rest of the world.

We found out that most of the people no longer have time to walk into a restaurant, shopping malls and supermarkets .They just make orders from wherever they are, hence changing everything.

Upon realizing the potential market on the internet, Muhindo created pages on almost all social media platforms, which made it easy for him to tap into the diaspora market.

“Things were not easy at the beginning, but we had to adjust accordingly and as I speak, it is working for me .This has helped us to market our services to the diaspora people and they get to know more about our services,” he states.

According to Muhindo, on a daily basis, he receives 100 orders for food from Uganda.

“You will find out that most of our food that we sell, 70% are on order. In a way, the pandemic has helped us to thrive digitally,” he says.

Sarah Namutebi, a teacher, operating at Kyengera Town Council in Wakiso district, says she doesn’t need a physical shop to sell her merchandise, as does it in the comfort of her home.

“I have an online shop that deals in shoes for women and children. What we do is that we get these shoes, take the pictures and upload them on our social media platform. This has helped me to reduce the cost because it is relatively cheaper,” she explains.

She notes that she wanted to run away from expenses such as paying rent, electricity, and water bills, among others.

Namutebi however regrets the banning of Facebook in the country which she says has greatly affected her since most of her clients are on this platform.

“The truth is that blocking Facebook in the country has affected online businesses because most people in Uganda use Facebook. 70% of my clients were coming from Facebook. It means I have lost most of them, more especially, those who can’t access Facebook through other means,” she observed.

At the height of the 2021 general elections, several individuals who were allegedly violating the platform’s rules and regulations had their accounts suspended.

The affected accounts were linked to the “Government Citizens Interaction Centre” as the account holders were said to be using fake and duplicate accounts to manage pages, comment on other people’s content, impersonate users and re-share posts in groups to make them appear more popular than they were.

According to the Ron Catamaran, the Jumia Chief Executive Officer, ever since the Facebook was blocked, 50% of e-commerce platforms customers were reduced.

Experts believe at least 25% of the employees in the e-commerce sector had been rendered jobless due to reduced customer orders resulting from shorter working hours.

On January 11, 2021, the government shutdown internet and social media sites as Uganda headed into the January 14 general elections.

However, the internet was later restored, but had affected a number of sectors, especially on e-commerce platforms.

Catamaran also noted they were having a lot of challenges with customers who were ordering for goods on social media using network bypass such as Virtual Private Network (VPN).

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