Why are South Sudanese e-commerce start-ups failing?
Did you know that 90% of South Sudanese e-commerce startups fail within the first 120 days? That is a fact! While the e-commerce business model is thriving in other parts of the globe, particularly in wealthy nations, South Sudan is still a long way from getting there.
In the context of South Sudan, e-commerce is not even a digital enterprise. People still prefer brick-and-mortar stores, whereas those that launch an e-commerce site wind up doing the majority of their business offline due to supply and demand.
Nonetheless, internet technologies have altered practically everything in the modern-day. You may order practically anything and have it delivered to your door. All you’ll need is a computer, a smartphone, and internet access.
Running an e-commerce company in South Sudan is a challenging effort for online entrepreneurs until the government of South Sudan finds answers to difficulties impacting the e-commerce sector.
Why are South Sudan’s e-commerce enterprises failing?
There is no e-payment system.
South Sudan has no electronic payment mechanisms via which internet merchants may make and receive money. While this is true, e-commerce sites often need the integration of an e-payment system.
Clients who visit an e-commerce site may use an e-pay system to pick the items and services they wish to buy, bill, choose a method of payment and make payments with the click of a button on the site. Mobile money, credit cards, and wire transfers are all popular payment methods.
In South Sudan, the payment aggregator that offers such a service is Nile Pay, although obtaining the API, the documentation procedure, and the costs are not cheap.
M-Gurush exists as well, however, its services are severely restricted. It’s unclear if they even provide APIS.
Expensive Internet plans
South Sudan has one of Africa’s slowest and most costly internet connections. For years, the issue has loomed, with little to no effort made to solve it. MTN, ZAIN, and Digitel are among the telecom firms that operate in South Sudan. Because of their small size, they control the market and establish prices that are harmful to the typical South Sudanese.
South Sudan also has fiber connections, although they are likewise too costly for the typical South Sudanese. Most online businesses would find it difficult to do business in South Sudan until the issue of internet connection is rectified.
Limited Banking Options
Banks in South Sudan are discriminatory against the business sector. Banking in South Sudan is restricted to a few NGOs, companies, businessmen, and women.
Opening of accounts has to be very seamless and also getting details of transactions also has to be very easy for e-commerce to survive in South Sudan.
So, until South Sudan’s financial concerns are fixed, internet businesses will have a significant obstacle.
Low internet penetration and network downtime
This is a big issue not just in South Sudan, but across Africa. South Sudan’s internet penetration is still insufficient to support e-commerce firms. Furthermore, internet access is not only pricey but also sluggish, making it unstable.
Placing a purchase online will be a difficult effort if one does not have a steady and dependable internet connection.
Unfavorable Business Environment and Government Regulations
It is not simple to start an e-commerce firm in South Sudan. South Sudan’s rules are too onerous for companies to function properly. You must also go through a great deal of hassle and bureaucracy when attempting to register your company in South Sudan.
While the expense of doing business in South Sudan is expensive, the taxes levied on firms are so many that you may just lose interest. Several massive sums of taxes await you after your firm is established, and they never stop arriving while you run it.
South Sudan’s infrastructure is massive. The high cost of electricity and transportation has a severe influence on e-commerce enterprises in South Sudan, impacting logistics and general e-commerce operations.
As a result, operating an e-commerce company in South Sudan becomes very difficult.
Retail behemoths control a significant portion of the market
In reality, if you establish an e-commerce firm in South Sudan today, you will not be in the same league as retail behemoths such as Jumia, Amazon, eBay, and others. This is due to the fact that these retail behemoths control a significant portion of the consumer internet retail sector.
In contrast to a South Sudanese start-up that is beginning from scratch, they have all of the resources and technology to properly support their activities
The e-commerce business model is still relatively new in South Sudan, and many people are unaware of it, resulting in a lack of a purchasing culture. People are skeptical of the e-commerce company and see no incentive to purchase online when they can shop at local marketplaces or retail locations around the nation, with items that are more reasonably priced than those offered online.
Rates of literacy: South Sudan has one of the world’s lowest literacy rates. Only approximately 28% of South Sudan’s adult population can read and write. So, even if you can resolve any other outstanding concerns, an illiterate individual may be unable to utilize an e-commerce website that demands reading and writing abilities.
Without investing in citizen education, particularly computer literacy, the pool of consumers for online businesses would be significantly reduced.
Population size versus e-commerce platform capability
South Sudan now has a population of 12 million people, and you would think that with such a huge population, many individuals would be able to utilize e-commerce platforms, but this is not the case.
According to DataReportal, South Sudan had 900.7 thousand internet users as of January 2021, representing a 1.5 percent rise from 2020 and 2021. However, such percentages are simply estimates since only roughly 4% of South Sudanese utilize social media, but internet penetration in South Sudan was 8% in January 2021.
It should also be emphasized that not everyone who uses social media shops online, further narrows the pool of possible customers for e-commerce businesses.
South Sudan’s e-commerce business has various obstacles, many of which I may not be able to address in this post. However, if the country’s internet access problem is remedied, this business has the potential to be just as lucrative as any other in South Sudan.
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