Skip to main content

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.

Internet-based

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At this time, Kenya’s infrastructure was fast developing and the days of dial up modems had been replaced by fibre optic technology.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

Comments

Popular posts from this blog

Cyber Cafe with an EDGE

Followed up from Laying the Groundwork for a rural cyber I've finally got around to writing this. Thanks for you all who patiently waited. Although I approached the project as an "internet consultant", I soon realised I would need to implement the whole spectrum of tasks required to get the cyber running. I spent almost a week laying the structured cabling, installing the software, and configuring the network. Most of the work I was doing for the first time (e.g. drilling holes in concrete to fix the trunking screws) and most of it was hard, but all of it was enjoyable. I needed to prove the project was implementable with minimal human resources (if it was going to work elsewhere). With an eye on both troubleshooting by the owner and future projects I prepared detailed How To manuals for most of the tasks. So the day finally arrived, November 17th I connected all the PCs to the internet. The results were incredible, the speeds were nearly as good as my 256K broadband conn

Differences between a Business Name (Sole-Proprietorship / Partnership) and a Limited Liability Company

While consulting for our online company registration service, Incorporator I find myself answering the question "What is the difference between a sole-proprietorship and a company?" Anybody who is considering starting a business must consider what type of business structure is needed for his or her particular situation. In Kenya there are three types of structures that one can use to start their business. 1. An LLC, or Limited Liability Company 2. A sole proprietorship 3. A Partnership A Sole-proprietorship and a Partnership are registered through the same manner (Form BN/2) with the exception that a partnership has more than one owner and although not necessary, entrepreneurs are advised to register a partnership deed as well. In this article all references to sole-proprietorship also include partnership. Understanding the advantages and disadvantages of each structure is important when deciding which one you want to use for your company.

Selling stuff online to Kenyans

You might not know this but my love of entrepreneurship is fuelled majorly by my love of computer programming. My first exposure to computers was in 1988 when I played shuffleboard on an Atari. Having been raised in the boondocks I was utterly spellbound with the concept of a video game. In 'shags' we hardly ever got toys from the shops; instead we would create our own toys using locally available material. For toy cars we twisted and shaped wire coat hangers and cut out rubber tires from old (and sometimes mom's new) bathroom slippers. For planes, we stuck a stalk of grass through a dried maize leaf and made our 'propellers' rotate by holding them out in front and running into the wind (incidentally this was my all-time favourite). For marbles we hunted for used and discarded bottle-tops (beer bottle-tops were coveted). In fact we had so many toys that our game time never felt inadequate. That was until I discovered video games. Hard as I thought I didn't see