The chief purpose of this subdivision is to specify thorough the survey of this undertaking. This subdivision will give a general sum-up of the Ecommerce in Uganda. To a greater extend the survey focused on Hellouganda.com company was carried on through the usage of SWOT and PEST analysis with the purpose of rendering recommendations which are firmly base on the present characteristics and the place of Ecommerce services.
The enlargement and development of ecommerce and cyberspace has truly changed the manner minutess have been made in Uganda, this has helped companies to get new markets, net incomes and decrease in costs [ Bidgoli, 2002 ] . Harmonizing Tambe and Hitt ( 2007 ) , stated that the growing of cyberspace use leads to good and improved quality of life via take downing communicating costs, convenience and efficient entree to information. Ecommerce does stand for the merchandising and purchasing of on-line goods and services as a complementing and supplementing of the physical shop [ Sahney, 2008 ] .
In Uganda ecommerce development is imputed to as a consequence of handiness to broadband cyberspace, increased credence of internet dealing and low figure of smartphone users as it ‘s stated in the old literature [ Mintel, 2010 ] . The degree of activities carried out on cyberspace has been increased due to broadband development hence taking to activities to no more dependance on the locale and clip of the twenty-four hours, people ‘s place and offices have become Centres. In Uganda the major age bracket which is responsible for the growing of Ecommerce is between 25 to 35 old ages, the ground being is that they are the chief cyberspace users and since one of the pre-requisites of ecommerce is internet.
As shown in the above tabular array, merely 35 % of universities have handiness to cyberspace of which merely 40 % have broadband connexion. Less than 5 % of primary schools have cyberspace and 10 % for secondary schools. Less than 2 % of wellness Centres IV-II are connected to the cyberspace. Attempts have been made to link authorities parastatals and authorities ministries under the E-government undertaking ; connexion remains low at territory and local disposal degree.
The modernisation of Uganda will be a long procedure and is expected to increase in footings of ecommerce, since many companies have started to acknowledge the potencies of cyberspace concern to an extent that people have realised that with the sophisticated phones likes Xperia, IPhones etc. consumers can still minutess irrespective of their location.
With the ecommerce part to the selling sector, it ‘s the clip that companies start underscoring on customization and distinction of merchandises than holding lone promotional web sites, if they are to vie in this epoch.
Harmonizing to Chaffey et Al ( 2009 ) , ecommerce market size will ever be determined by the consumer demand for internet shopping and this will be factored establishing on the handiness of cyberspace, benefits likely to impact the development and success of ecommerce and the technological art of major participants in the industry.
PESTEL analysis of the Uganda Ecommerce
Harmonizing to Ko Ellay ( 2006 ) , PEST analysis is similar to or the same as External analysis of SWOT. Such external factors normally are beyond the house ‘s control and sometimes present themselves as menaces or chances for the houses. PEST analysis is an illustration that surveies the Political, Economic, societal and Technological elements of the external environment which maintain altering due to the exterior forces which administrations have limited control over it, yet these elements do impact the success or development of the administration either indirectly or straight [ Alkahafaji, 2003 ] .
The legislative and political factors are the chief influential factors of ecommerce in Uganda as it is in other states. Uganda has exempted dual revenue enhancements from abroad concerns working in Uganda hence pulling foreign investing as a consequence of the revenue enhancement allowances offered by the authorities which are considered to add value to the economic system. In add-on foreign investors have been given authorization to purchase belongingss in Uganda. A portion from the above mentioned factors, there are other factors such as clime alteration, there is an act which stresses the demand to cut down C dioxide discharge by 26 % before 2010. There are many more political issues which might impact ecommerce and the cost.
These factors are so of import and they are the chief determiners of the monetary value, demand, costs and net incomes in about all concern. The large influential factor to the economic system of Uganda is the unemployment job which has impacted the demand for both the production and goods. Another factor which has influenced ecommerce in Uganda is the reversal of VAT from 18 % to 21 % which has led to new monetary values between the viing administrations. These economic factors which are external and are non controlled by the online Sellerss, there ‘s a large possibility that revenues for the companies are likely to be affected in the following approaching old ages though there ‘s parts coming from internal concerns, chiefly from states where labor is inexpensive.
Harmonizing to the British Retail pool ( 2010 ) , the population of senior citizens is expected to turn by 40 % ; this is besides evidenced by the current tendencies in Uganda where consumers are now really sensitive to monetary values due to the unemployment. The figure of older consumers may hold less involvement in the latest design or manner and engineering, which is expected to increase, factors like population size and age distribution to a certain extent, they are capable of tending the market to a certain consumer section and as such companies like Hellouganda.com and other SMEs need to tend their merchandise and service offerings to supply to such client sections.
Technology plays an of import function in the public presentation and the growing of Ecommerce in Uganda. The new developments which have led to an easy cyberspace entree has helped the companies in deriving new markets and doing convenience to consumers and this can be done via activities like repetition buying that save clip. Due to the usage of Electronic shelf labelling, Radio Frequency Identification ( RFID ) , Enterprise resource planning ( ERP ) etc. , services have gone down in footings of cost hence bespeaking technological development. This has besides improved the distribution activities and efficiency of stock list direction and the increase of client order processing from multiple channels. Ecommerce is the less affected channel when it comes to economic downtrend as consumers keep utilizing the cyberspace for monetary value bargaining and comparing hunt by merely snaping on a button. With engineering it affects the concerns in a figure of ways, in Uganda the selling industry where ecommerce is immensely lending to the public presentation of companies. Technological promotion can besides be seen as sophisticated equipment in both selling and research. Technological promotion will besides increase high outlooks from the consumers due to the exposure of such new engineerings that will bring forth easiness and convenience, therefore taking to a battle to run into the consumer demands with the attempts of deriving productiveness and market portion.
The general increase in the grade of consumer consciousness in consideration to the salvaging the environment by C dioxide discharge, recycling, environmental pollution, the usage of friendly environmental merchandises ( like constituents and natural stuffs ) waste direction and monitoring issues refering ecological harm etc. is the factor which will impact the selling activities in Uganda. The estimated figure of plastic bags given to Ugandan consumers in twelvemonth is really large, though the mean clip for one plastic bag to to the full break up is 1000 old ages [ Euromontor 2009 ] . The authorities of Uganda and UMA ( Uganda Manufacturer Association ) are seeking so much to acquire the alternate manner of continuing the environment while transporting assorted activities. What is more is that there is a planetary concern on how they can halt or stop the ecological harm and the abuse of resources. In most instances the degree of environment pollution caused by industrial chemicals is a distressing phenomenon that can direct a wadding company dependable on how environmental consciousness is establishing on the host state. The environmental saving can still be determined by the authorities coming up with policies on how the external environment affects concerns. Accidents and natural catastrophes are besides environmental happenings that are portion of the factors impacting the external environment particularly in footings of site locations. A fabrication sites located in Uganda is less likely to be hit by natural catastrophes like typhoon and Earth temblors than that located in China.
Laws to forestall industries from prosecuting in Acts of the Apostless like kid labor, development of labor, rough working conditions and favoritism which are normally in Third universe states, are already catered for in Uganda [ Finance Times, 2008 ] . Such Torahs determine the duties of the parties ‘ involved and contractual relationships how it should look at. Other legal issues of quality/standards of imported goods into the host communities are companies importing from 3rd states where labor is inexpensive such as China should be inexpensive. Legal issues environing the external environment based on the fact governments are ever witting of the type of goods being brought in Uganda as imports, this is formed in the of import Torahs.
Background of HelloUganda.Com
Hellouganda.com is a web portal embracing online shopping and bringing service chiefly aimed at people populating outside Uganda seeking to direct support to their loved 1s in Uganda. It enables its clients to purchase a broad scope of merchandises such as school fees verifiers, shopping verifiers, Music downloads, and many more points. It so arranges to present the points direct to its clients ‘ nominative receivers – normally within 24 hours of having a complete order [ Gateway Technologies 2008 ] .
In add-on you can purchase a figure of uniquely Ugandan points from them – they can so set up to present those merchandises to any reference in Uganda or elsewhere in the universe. They have partnered with taking courier companies to offer dependable and cost effectual express bringing services [ Gateway Technologies 2008 ] .
A Ecommerce merchandises and services offered by hellouganda.com
Gifts and Flowers
The company offers the service of Gifts and Flowers where it eases the service of gifts giving, consumers can take from a broad scope of high quality gifts such as flowers, gift shackles, aromas, cocoa and assorted plants of art.
This service is unfastened 24/7, you can order up to the last minute, gifts are of all time available and so delivered to your loved one in clip [ Gateway Technologies 2008 ] .
It offers touristry services across a assortment of avenues runing from Accommodation which comprises of existent clip online booking for Hotels, Apartments, Lodges, Cottages to advert but a few. The breasts and safaris subdivision is besides portion of the touristry subdivision ; it encompasses National Game Parks, Gorilla Tracking to advert but a few. The nutrient and merriment subdivision is another 1, it includes Restaurants, Dancing Clubs, Live theater and film to advert but a few [ Gateway Technologies 2008 ] .
The B2B profiles is a platform on Hello Uganda point com which brings all concerns together to hold the same platform to speak about concerns and to do of import audiences on any paramount issues sing concerns in any signifier [ Gateway Technologies 2008 ] .
This sort of platform has been designed with a feeling that all concerns will be able to pass on exhaustively with others ; circulate information to all interest holders in the concern fraternity. Therefore a B2B profile is such an astonishing pillar which guarantees a smooth behavior of concern among concern spouses [ Gateway Technologies 2008 ] .
The Hello Uganda Electronic verifiers merely ease purchasing services and trade goods for its darling 1s no affair where they stay, these verifiers can be used to pay goods from supermarkets, building stuffs, payment in pharmaceuticss and clinics to advert but a few [ Gateway Technologies 2008 ] .A This characteristic is merely paramount as it takes small clip and warrants trust on behalf of people in the Diaspora and their households here in Uganda that whatever money sent is put into its existent intended usage.
A Life manners
The Hello Uganda life manners is a societal topographic point where friends and households can run into, interact, chew the fat on line, have voice sentiments, screening of the latest manners, merriment, hot creative persons & A ; cultural events and all go oning topographic points in Kampala. With the Hello Uganda Life manners, a batch is put in topographic point for a assortment targeted audiences and as such everyone has a opportunity to bask this fantastic and fantastic characteristic [ Gateway Technologies 2008 ] .
Music down tonss
Hello Uganda music down tonss subdivision is an on-line shop of music from all the Uganda ‘s prima creative persons. One will be able to toss off burden a desired vocal to his or her storage device. This increases the will of those in the Diaspora to bask the music of their countrymen which has non been possible for some clip [ Gateway Technologies 2008 ] .
Hello Uganda School Fees
The Hello Uganda school fees has been designed to make a contributing environment of paying school fees in Uganda, it ‘s a simple and easy manner because it will affect members of its households paying fees on line and once more anyone with an Internet entree will be in place to payA his/her fees online for any school, university or third establishment [ Gateway Technologies 2008 ] . A
Harmonizing to gateway engineerings, ( 2008 ) Hello Uganda has promised a delightful and safe web portal for usage. In add-on to that, it has enriched its web portal, it has partnered with PayPal to guarantee that it conducts an online payments in a safe and unafraid environment. It has no entree to your recognition card inside informations – as you enter them straight into the PayPal secure waiter.
The competitory environment ( Porters Five Force Model )
Figure 4: Porters Five Forces Model
Data beginning: Porters Five Force Framework – Last updated 2002
Harmonizing to Scholes and Johnson ( 2002 ) , the presence of a really ferocious competition between houses as a effect of proficient promotion and market globalisation in the likes of information and communicating engineering is one of the most dominant properties of today ‘s market led economic systems. It ‘s non typical to see companies fighting to make one signifier of competitory advantage or the other in order to supply for the demands of consumers with in their industries. Porter ‘s five forces model is a theoretical account that is directed at furnishing houses with valuable agencies of measuring an industry in order for the porter ‘s five forces to be believed as instrumental in determining competition within an industry [ Alkahafaji 2003 ]
Porter ‘s five forces constitute of the followers ;
Menace of new entrants
Harmonizing to Keller and Kotler ( 2006 ) , the attraction of a market section, depends on the tallness of the entry and issue barriers, where the most attractive section is the 1 with the highest entry barriers and low issue barriers. In Uganda the menace of the new SMEs entrants in ecommerce industry is high since the industry is still in adulthood phase.
Dickering power of providers
In Uganda there ‘s an intense competition in the ecommerce industry and there ‘s a low fright of providers incorporating into the industry because of factors like sourcing cheaper trades from abroad big companies.
Dickering power of purchasers
With the recent planetary fiscal crunch, Uganda was among the states which their economic systems was affected, hence Uganda is merely retrieving from the effects of that economic recession, which triggered the consumers to go monetary value witting and hence companies got involved into monetary value wars, discounting and it ‘s true that the bargaining power of purchasers is high. The being of many companies and monetary value comparings on the web sites has made monetary values wars between concerns and hence giving consumers more power of picks. An illustration Hello Uganda ‘s less committee tax write-offs has made it remain in concern [ Gateway Technologies 2008 ] .
Menaces of Substitutes
Establishing on Rutherford ( 2002 ) , any service or good that consumers consider functioning as the same intent as the other is called replacement. In Uganda there ‘s a high menace of permutation in ecommerce with the wide companies which seem to hold better permutation merchandises online. Buyers like comparing monetary values from one web site to another before they can hold what to buy.
Hello Uganda is faced with tough competition with other companies both local and external e.g. amazon etc. Many SMEs in Uganda are going more cognizant of the advantages of cyberspace. The competition is expected to lift when more participants come into the game and better, update their merchandises on the cyberspace. The consequence of the five forces on the hullo Uganda point com is that there ‘s edge to be more competition as the bing and the new comers into the online concern will be working to construct more attractive and client friendly websites that will be targeted for consumers seeking for goods at the lower monetary values.
SWOT analysis for hullo Uganda point com
SWOT analysis provides a survey on the strengths and failings of Hello Uganda in relation to Opportunities and menaces that can go on in the industry. This analysis tool helps the company to take its steps to the failings, menaces and the chances before concentrating on its strengths.
Figure 5: SWOT Analysis of Hello Uganda point com
Penetration of International markets
Leading Market Position
Delay in distribution of goods
Broadband Expansion in the Uganda after the constitution of seacom
Low demand of non-food merchandises due to recession
Penetration of International Markets
Hello Uganda point com has tried to perforate into the international market by registering it website with Google so that it can be placed on the first page when consumers do a hunt for on-line trade goods via Google web site. This has helped it to perforate into the markets and secondly being that it has identified the client demands and it does offer merchandises in line with low monetary values as the same at the international market.Hello Uganda making this it helped it to stand a better opportunity to derive more market portion locally in Uganda.
This move of Hello Uganda supplying low-cost priced merchandises to its clients, this made the company to derive wide entreaty at most clients, and this made them to purchase merchandises that match their budgets without compromising on quality and pick [ Gateway Technologies 2008 ] . This move has enabled the company to sell its merchandises online without much competition.
Hello Uganda ‘s electronic market place in Uganda has given it a powerful bargaining place ; this has given it a good hereafter growing and sustainability. Hello Uganda is one of the most experient ecommerce service suppliers in Uganda and it has been successful due to the early acceptance and consistency in invention.
Delay in distribution of goods
Hello Uganda being that it has acquired a large market portion, many Ugandans abroad buy on-line products/services off it ‘s website for their loves in Uganda may order for the bringing of the goods/services, but usually the bringing for these goods takes some clip, since when an order is got, they besides go and buy the merchandise and so eventually present it to the right reference were directed, but it consumes clip.
Harmonizing to Gateway Technologies ( 2008 ) , hello Uganda ‘s web sites has earned it much money from the assortment of the merchandises and services rendered to its clients. The company ‘s on-line presence is perceived to be the inexpensive manner of making its clients.
Broadband Expansion in the Uganda after the constitution of seacom
The being of fiber after the constitution of seacom, Internet has been spread outing in Uganda hence giving hello Uganda a good chance to increase and keep its market portion in footings of ecommerce, This Company is one of the taking companies in Uganda in online concern [ Gateway Technologies 2008 ] .
Because of a stiff competition in this sector of ecommerce, Hello Uganda has been faced with a really high competition from other companies under the same sector who have been deriving the market portion bit by bit. With this sector in Uganda, the market has been saturated and highly competitory, since many online concerns have joined the same market
With the recent economic planetary recession which besides affected Uganda, this left many consumers without disposable income and therefore led to decreases in the consumers disbursement. With issues related to worsening income and increased unemployment, companies cost cutting by cutting off employees etc. This in all led to consumers holding less income and ensuing in less disbursement on indispensable trade goods as a consequence of jolted consumer assurance. The company ‘s merchandises in the non-food section declined massively in the gross revenues as a consequence of difficult economic times that affected the state.
This chapter has gone in front to give an overview of the ecommerce activities in Uganda. It besides went farther to give the background of the instance survey from the strategic place of ecommerce in both the Uganda SMEs sector and the instance, via the usage of PESTEL analysis, Porters five forces model and a SWOT analysis, with a position of supplying a thorough apprehension of the present and future province of ecommerce within the instance and the industry.