E-commerce to Support Informal Market Vendors

Development of an online platform to connect informal micro, small and medium enterprises and consumers in Uganda

Towards a Solution

Digital commerce has proven it can meet people’s needs and protect livelihoods during widespread sanitary crises. In partnership with Jumia Uganda, the United Nations Development Programme (UNDP) Accelerator Lab experimented with an online delivery platform that harnesses technology to link informal vendors (notably women, youth and persons with disabilities) with customers who cannot easily move around to purchase goods from markets in Kampala, Uganda. Based on its experience and infrastructure in such fields as mobile money transactions and distribution networks, the African e-commerce firm Jumia prototyped an online purchase and delivery platform on a small scale for two markets in Kampala (Nakasero and Nakawa). The dedicated online ordering platform relies on a last-mile distribution network and a diverse set of payment methods and comprises quality assurance, training of vendors and growth marketing. 

The model employs market agents who validate the goods and services for quality and hygiene before they are dispatched, and motorcycle riders are trained to provide safe and contactless deliveries. Consumers have the option of giving feedback on their level of satisfaction with both the products and the service through the dedicated application. The platform allows market vendors to reach a large segment of customers that might never have reached and to track their daily sales. Early indicators show that the platform has significantly incremented vendor daily sales, thanks to increased interactions with customers online. 

Mobile phones, airtime and data services have been provided to the vendors by UNDP as catalytic support. The UNDP Uganda Accelerator Lab now offers an opportunity to enhance the model in the face of the COVID-19 crisis. In fact, the analytics from this partnership will be used to scale the offer to different customer segments and other regions beyond the Ugandan capital city (where seven markets and 3,000 vendors already use the platform) and to come up with more production in various sectors. 

The project helped the informal sector and small to medium enterprises in Uganda continue operating and reach customers during the COVID-19 pandemic. It helped reduced congestion in and traffic jams around markets, thus diminishing the risk of spreading the virus and increasing the convenience of shopping and connected rural farmers with urban markets, keeping supply chains for agricultural produce active and providing employment, thus mitigating the effects of the COVID-19 crisis on the economy. 

At the macro level, ongoing collaboration with Uganda’s Ministry of Trade, Industry and Cooperatives has the potential to unlock regional-scale trade opportunities and ensuing South-South linkages, in line with the ministry’s core mandate of accelerating industrial development, promoting exports and supporting the eventual realization of the African Continental Free Trade Area (AfCFTA). 

The initiative benefited from stimulating South-South exchanges on the role of e-commerce as a transformative digital technology with countries like Côte d’Ivoire, Ghana, Kenya, Namibia, Niger and Nigeria. With support from the UNDP Regional Bureau for Africa, plans are in place to develop a regional framework and roll out this solution in some of the countries that already have a Jumia presence. Internationally, the initiative has also been shared with the governments of Cambodia and Honduras.