Mocality to close down in Kenya.
I have just been forwarded the following email correspondence from a Mocality business user in Kenya confirming that they are closing down the web site later this month:
Hello Business Owner Unfortunately all good things must come to an end, and Mocality is one of them. We hereby give you notice that Mocality will cease to render its services on the 28th February 2013. Please log into the system between now and the 28th to retrieve any data that you may require from the system, as the system will no longer be available after the 28th February 2013. All paid for services that should have been rendered after that date (including advertising space and the like), will be refunded in full, and you will be contacted about that refund individually if it applies to you. We would like to thank you for your patronage and your support, and bid you a fond farewell. If you require any more information please email support@mocality.co.ke. Regards Team Mocality.
To be honest, I am not entirely surprised since rumours have been swirling for the past few months that Mocality would be closing down. However, it’s still a shocker since Mocality had essentially re-invented business directory services in Kenya, and is also a major player for daily deals through Mocality Deals.
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It seemed as if mocality had finally cut a niche in mobile directory and complimented the loss of kalhari with the deals division. it’s a surprise to me.
Probably a lesson or two in here for everyone in Kenyan tech.
A website is not a business. A marketing campaign is not a business. Crowd-sourcing is not a business. An app is not a business. Data is not a business.
That said, Mocality got some things really right.
Definitely will go down in Kenyan tech history for their crowd sourcing of data and engagement with small business – despite the quality issues that saw State House listed as Nairobi Zoo.
We enjoyed Round One of Google vs Mocality that saw Google listed as an electrical retailer in Hurlingham. We all enjoyed round two of that fight too.
Mocality also helped draw a lot of attention to the Kenyan tech scene from outside, with good coverage on Techcrunch particularly as a product, and then the Googlegate business really went global and put Kenya on the map somewhat as punching well above its weight.
Carey,
what is your take on the remaining players in the group-buying space (Zetu and Rupu)?
Do you think they will survive or follow suit and bow out as Mocality has done?
I hope they will consider open-sourcing the data they harvested to local developers. In which case all will not be lost.
As mocality exits, we are left with others who have a different strategy. meet Sokofive.com a website like no other. deals go on. group buying goes on
Hey Joshua
I’m not anywhere close enough to those businesses to pass comment on them – they appear to have great backing, passionate teams and seem committed which are great ingredients.
My honest personal opinion is that mass e-commerce – whichever version (roughly speaking the whole sector can be divided into 4: large scale online retail, flash sales, curated online retail and group buying ) – is just a very tough business when it comes to execution. its hard enough in physical retail and just because its online and easier for the consumer does not at all mean its easier for the retailer.
If you look at classified sites, one might argue that you need strong capabilities in sales to get the content and the revenue. In e-commerce, the opposite is true – you need strong capabilities in buying and merchandising, and I mean Buying, the commercial specialist discipline of upstream supply chain management.
The problem with Buying in Kenya (and Nigeria for that matter) is that there just isn’t the range of wholesalers or retail suppliers here to make Buying a sensible activity at scale.
Nakumatt does Buying very well. In China mostly.
What are the products that one might Buy in order to onsell at scale to e-commerce consumers in Kenya? Chicken & Chips? Haircuts? Massages? Car washes? Cinema tickets? Domestic hotel beds?
I wouldn’t accept a personal challenge to sell a couple of hundred of these things a day, let alone 17-odd million which is how many connected Kenyans there are.
There just aren’t the product ranges to buy – there aren’t 10,000 types of kitchen homewares like there are in other parts of the world, where frankly group buying is struggling too, but with other issues, especially Returns.
Even if you are the best possible Buyer on the planet, you cannot possibly sell more than a couple of thousand massages in Kenya at a time.
On the subject of haircuts, which seems to be a popular Kenyan group buying item chosen by group buying sites, I never understood the rationale.
Being totally bald myself, I’ve never really had much reason to dwell on this, but now that I’m thinking about it, it demonstrates the Buying problem.
On one level, millions of Kenyans constantly need haircuts. But does anyone really want discount haircuts?
If I was in the haircutting frame of mind via some miracle of biology, I reckon I’d be going for quality, not price.
No amount of friends peer pressure would make me rush out and get a cheap haircut. Quite the opposite in fact. I reckon kinyozi kiosks are going to be alive and well in Kenya for many years and will totally bypass the group buying thing. Haircuts and e-commerce to me just don’t resonate as going together.
Very happy to be proved wrong on this, as I have no data, its just gut feel.
Perhaps people less folically challenged will know better.
When I think of the number of Kenyans I know who want to buy a massage or spa treatment, I just don’t think its a scale activity in this country either. Are people in Embu going to rush online to buy a massage at Sankara, for say a 25% discount, then pay twice that discount in real money to get on a bus to go get a massage in Westlands? If there was a chain of massage parlours nationwide, and a discount was offered, that might make more sense. But I think there is a very good reason that there is not a chain of massage parlours nationwide. Kenyans are not massage crazy at this point in history. We have more pressing issues. It makes no sense for an e-commerce company to select massages in bulk to on-sell.
The things that people buy at scale are Coke, Omo, Cigarettes, Airtime, Petrol, Batteries, Razorblades, Sanitary items, Beer, Toothpaste, Unga, Sugar. The problem is that the brands in these categories have no problem reaching the masses and no incentive to group discount.
The things that people want to sell at scale are limited in number due to the economics of people’s wallets.
Until there are scalable things worth Buying, that have barriers to consumer acquisition, where the ability to deliver several hundred thousand of those things instantly or same day is not an issue, then there might be something in these businesses if the margins are there.
I think that’s why you’re seeing some of these businesses pivot into other parts of the e-commerce value chain away from group buying, into online travel retail or aggregated online retail (which to my mind is an even more expensive business model to execute when there aren’t that many online retailers to start with yet).
Like I said in my earlier comment, its very early days, and one has to think about Kenyan realities, Kenyan problems, and aim at solving that. Which I think Mocality did very well on the telephone number thing I must say. Used that all the time.
@carey WOW! an impressive and detailed response. Clearly you have nailed it on the head. E-Commerce is not as simple as it looks in the contetx of markets like Kenya. Thanks for the great insights! 🙂
At Carey. what you know about online business? You seem to be knowing almost nothing about online marketing and SEOing..LOL!
Hi Carey Eaton is #GBSTVHOMESHOPPING is a big threat to e-shops in Kenya @zetudeals @rupukenya @JumiaKenya @bidorbuyKeny