E-commerce, the process of buying and selling goods using the internet, is a great facilitator of trade. Owing to the reduced cost of doing business – in most some cases there is no need for a physical shop, increased efficiency – orders and stock are easily tracked, and increased access to geographically distant markets, E-commerce has become a game changer for businesses that have adopted it. Unfortunately, student entrepreneurs at Makerere University have not been keen to make the most of this avenue of doing business.

According to a team of researchers led by Dr. Hellen Namawejje from the Department of
Statistical Methods and Actuarial Science, College of Business and Management Sciences (CoBAMS), less than 10% of the business enterprises exhibited at the 2018 Annual Students’ Entrepreneurship Expo organized by the College were using pure e-commerce. With partial e-commerce, goods and services are sold through internet, but hand-delivered to customers while with pure e-commerce, all the process involved are digital.

The team, with funding from the Makerere University Research and Innovations Fund (Mak-RIF), therefore sought to understand this low uptake through a study titled “Commercializing of Entrepreneurship Ventures using E-Commerce: Evidence from Makerere University, Uganda”. Other members of the research team were; Dr. Proscovia Katumba-Department of Marketing
and Management, CoBAMS, Dr. Patricia Ndugga-Department of Population Studies, CoBAMS, Mr. Augustine Ssekyondwa, Directorate of E-Government Services, National Information Technology Authority-Uganda (NITA-U) and Dr. Isaac Shinyekwa-Economic Policy Research Centre (EPRC).

Speaking at the dissemination event held in the CoBAMS Conference Room and virtually on Thursday 17^th December, 2020, members of the Mak-RIF Grants Management Committee (GMC) in attendance thanked Government of Uganda for the generous funding that enabled the research team to conduct studies that can help address youth unemployment in Uganda. They equally paid tribute to the Chairperson GMC, Prof. William Bazeyo for his negotiation skills that influenced the Government to allocate the funding.

“With 70% of youth in Uganda currently unemployed, this study will be of great assistance in addressing this pertinent issue,” remarked Dr. John Mutenyo, a GMC Member. “I urge you to disseminate these findings widely so that the youth can know that there are other avenues through which they can get employment” he added.

Dr. Mutenyo reminded the audience that the call for RIF 3 (the third round of Mak-RIF funding) will go out early next year and urged them to prepare good proposals that can attract Government funding especially in research areas that address NDP III (the Third National Development Plan) and the SDGs.

“Entrepreneurship and E-commerce are currently big players in the economy of any country in the world. I believe that these findings are not going to end here but will be taken down to potential users and hopefully help them. This will boost the impact that we ought to see from these research funds” added Dr. Isa Kabenge, another GMC member.

When it comes to understanding business ventures, it is always advisable to hear from an established practitioner. E-commerce ought not to be the exception. Delivering a brief keynote address, Makerere University alumnus and Founder, Xente Tech Limited, Mr. Allan Rwakatungu paid tribute to his alma mater and the research team in particular for taking steps to bring more Ugandans into the digital economy.  

Xente is a platform founded in 2016 with a vision to make every person and business join the digital economy. “The opportunities out there are immense, not only for users of the platforms but also for entrepreneurs who are able to harness them” shared Mr. Rwakatungu.

Taking an example of Jumia, he noted that although the company controls less than 3% of the total retail market in Africa, it is worth billions of US dollars. “To show you what that actually means, the percentage covered by Alibaba is about 25%, and when you look at the size of the Chinese market, the opportunities for growth are immense” he added.

According to Wikipedia, the Alibaba Group recorded a net income of US$ 19.82 Billion in 2020 and had over 117,000 employees as at 31^st March 2020.

Addressing participants, the Dean School of Business, CoBAMS-Dr. Godfrey Akileng observed that the current disruptions occasioned by the COVID-19 pandemic have provided us all with an opportunity to rethink how we can better manage and do business. “Those who will not embrace international electronic payment systems will struggle as the pandemic continues to sustain itself.”

He added that the mix of entrepreneurship and e-commerce presents students of business with an opportunity to reflect further on the contribution of these areas to development. “Uganda is considered among top ten most enterprising countries in the world but unfortunately, the demise of these business startups is very high. I hope this research will help us illustrate how e-commerce can find a lasting solution in terms of sustainability of these firms.”

Giving an overview of the project, Dr. Prossy Katumba identified absence of delivery infrastructure and secure payment methods as two major barriers to the wider acceptance of E-commerce in Africa. “Several countries lack an organized physical address system, and cash on delivery is the main payment method that online merchants such as Jumia, SafeBoda, Café Javas, Xente among others must deal with.”

She added that the entrepreneurship course offered to all undergraduate students at the Schools of Economics and Business, CoBAMS as well as Masters of Business Administration (MBA) and Masters of Economic Policy and Management students equips them with skills that enable learners to start their own enterprises.

“We have some success stories that have come out of this entrepreneurship course such as Dalausi Juice in Wandegeya, which has become a must-have at high-end parties” shared Dr. Katumba. “This thriving business was birthed out of a simple coursework idea” she added.

Dr. Katumba equally made mention of Andrew Mupuya, who as a result of his course work in entrepreneurship went into the production of recycled paper, “and has as a result won many awards from various international organizations and been featured on CNN – we encourage our students to start small and grow their ideas into a formidable business,” she explained.

Presenting the findings, the Principal Investigator-Dr. Namawejje shared that 796 out of 1,320 students that took part in the 2018 Entrepreneurship Expo were surveyed. 47% of these were female while 53% were male. 77% of participants were below the age of 24 while 23% were aged 24 years and above. In terms of origin, 38% of participants were from the Western region, while 32% were from Central, 16% from Eastern, 8% from Northern and 6% either from other regions or of different nationalities.

Technology is an essential driver of e-commerce uptake. 88% of the 796 respondents used smart phones, while 52% used laptops, 4% used either desktops or tablets and 9% had no device to use. The high percentages recorded in the use of smart phones and laptops could imply that some respondents used more than one device.

Additional drivers of E-commerce uptake reported included; the Annual Students’ Entrepreneurship Expo that enabled budding entrepreneurs to practice what they had learnt in class and a regulatory environment that was conducive to doing business online – there are no restrictions imposed on entrepreneurs who posted their products and services on various platforms. The natural shift of businesses online due to the COVID-19 pandemic was also another driver of e-commerce uptake by both entrepreneurs and customers.

The findings further revealed that entrepreneurs employed three main models of E-commerce; Business to Customer (B2C), Business to Business (B2B) and Business to Government (B2G). At 80%, B2C had the largest share while B2G was understandably at only 1%. “Owing to the capital intensive nature of doing business with Government, we did not expect the B2G model to feature prominently in our findings” explained Dr. Namawejje.

At 95%, the use of Social Media Platforms dominated the channels employed by students to reach their customers. This was followed by Websites at 21%, Email at 18%, Mobile Short Codes (SMS Codes) at 4%, Word of Mouth at 1.8% and Making Calls at 0.8%. Platforms such as Facebook have already taken advantage of this trend by introducing Facebook Shops – enabling businesses to create online stores on Facebook and Instagram free of charge.

Despite the availability of free options for entrepreneurs to easily embrace e-commerce, it became apparent to the research team that some barriers were impeding this. The lack of e-commerce knowledge topped this list with 73% of entrepreneurs citing it. This was followed by the high cost of internet at 67%, Lack of access to gadgets at 54% and Poor Internet connections at 49%. Trust and cyber security issues were cited by 45% of respondents while Conservatism among community members accounted for 20%.

To help boost the commercialization of entrepreneurship ventures using e-commerce, the research team made the following recommendations at policy level;

1. Government should provide subsidized or free Internet to Makerere University to enable students easily utilise online platforms for generating and nurturing entrepreneurship ideas and projects.
2. Taxes on e-commerce enablers such as Internet and smart phones should be reduced as a way of attracting business enterprises especially the start-ups to take up e-commerce in their operations.
3. Government should support building of e-commerce infrastructure at Makerere University since it’s a Government institution.

The dissemination event was moderated by Dr. Anthony Tibaingana from the School of Statistics and Planning, who last week disseminated his findings on “The impact of Skilling the Youth and Women in Household Enterprise Start-Up and Performance in Uganda”.

Article by Public Relations Office