Monday, June 17, 2013

Sh10m online venture built by Kenyan Enterprenuer

As a student at Virginia Tech in the United States, Mogaka Mwencha would stock up on local Kenyan crafts while on holiday, and display them proudly in his room. His friends would gape over the artefacts and in the spirit of entrepreneurship, Mogaka sold selected pieces at a tidy profit.

Little did he know that his passion for Kenyan art would culminate 12 years later in a business worth over Sh10 million.
The first venture that the budding entrepreneur embarked upon was in 2000 with college mates from Zambia and Malawi. Through a website called ezuri, they sold African art to the Western market.

However, the challenges of importing items, trade restrictions, packaging and transport prevented ezuri from growing. “But the opportunity was there; that was clear,” said Mogaka.

Seven years later, he returned to Kenya with his eye keenly trained on online business opportunities.


“When I returned, I found a few guys setting up Internet-based businesses to facilitate trade. One of them was Tips online,” said Mogaka. An online business directory, it collected information on businesses and presented it in an accessible format.

Around the same time, he discovered Online Duka, which catalogued products online.

“I thought why don’t we combine these two ideas,” he said.
Eventually an idea was created that offered value that could be charged, Mogaka explained, adding that one of the biggest problems facing Internet businesses in Kenya was they didn’t operate according to a business model that included an income stream.

At this time, Kenya’s infrastructure was fast developing and the days of dial up modems had been replaced by fibre optic technology.

This strengthened the avenues open to businesses, and set the stage for an online platform that traded products and services.

In 2010, Mzoori was launched. The genesis of the name grew from Mogaka’s first business, ezuri.

In addition to being founded on the Swahili word mzuri meaning good or beautiful, the double ‘o’ was a throwback to the web 2.0 style of business which relies on user generated content and is typified by Google, Facebook and Yahoo - all of which incorporate the double o in their brand name.

When Mzoori first entered the market, it depended on numbers; getting as many products and services online as possible in order to attract eyeballs, and in turn draw advertising from large corporates.

“Then we discovered that Kenyans are not comfortable clicking ‘Buy.’ They want to see the thing and hold it,” said Mogaka. “And it’s not yet part of our culture where if you’re shopping for something you check online. People would look online and then go away.”

In short, the business model was not what the Kenyan market required. 

He and his partners agreed a change of approach was needed and spent 18 months aggressively researching and developing a website that would answer the needs of Kenyans.

“We asked ourselves; what is it people are doing that they are comfortable with, that we can take advantage of?’’
We noticed that shoppers would come online, look for products or services that they’re interested in, and contact the person selling it.

So we thought, what if we make money connecting the buyer and the seller? And that’s what we do now,” explained the 34-year-old CEO.

In September, Mzoori was launched as a lead generation system.

A seller lists his products and when a buyer interested in his particular product visits the website, the seller is alerted through an SMS that shares the buyer’s particulars.

This innovation which Mogaka and his team developed is called ‘outcry,’ and it puts a seller in direct contact with his target market, offering distinct advantages vis a vis a mass media campaign. While the seller is currently charged Sh10 per SMS, Mogaka is confident that the SMS cost will reduce as the business attracts volumes.

Countrywide expansion

“Every time someone is shopping for what you are selling, we tell you,” said Mogaka.

He added: “Most people do not spend time on their computers, or on the Internet waiting for an order but they always have their phone. And if you get an SMS with an order, you react.”

Items listed include clothing, shoes, handbags and books, and larger assets like furniture, electronics, kitchen appliances and cars.

In three months, Mzoori has registered 500 shoppers and 10,000 products through 50 sellers including Text Book Centre who delivers across the country.

Mzoori is initially focusing on Nairobi, but plans to be countrywide in 2013, and Mogaka is hopeful that once the website gains the trust of Kenyans, it will facilitate online transactions by reintroducing the ‘Buy’ button.

To assuage concerns that shoppers have about online commerce, Mzoori also verifies the authenticity of sellers, and this has helped build credibility.

With eight employees based at the View Park Towers in central Nairobi, the young company boasts a strong corporate governance structure with a board that includes a former managing director of Kenya Airways, a leading IT consultant, and the project financier.

- Business Daily Africa

Creating Economic Responsibilities

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