Innovation Village sees a compelling future for digital in Uganda’s retail sector
Ugandan businesses have suffered a 25pc dive in Covid-19 induced revenue losses, according to a report by The Innovation Village, Stanbic Bank and RocketHealth that examines the deeper economic impacts of the lockdown measures introduced at the onset of the COVID-19 pandemic.
Nearly 80pc of the businesses that participated in the survey are projecting sharp falls in revenue relative to 2019. Some 56.5pc of respondents expect their revenues to fall by more than a quarter while another 21.9pc see a contraction smaller than 25pc. Just over 5pc of respondents projected revenue growth above what they earned during 2019.
The survey sought to capture the trends redefining the sector and opportunity spaces for the retail ecosystem that can support long term sustainable economic development and business resilience.
Speaking during the launch of the report at the Golden Tulip Hotel November 5, The Innovation Village Team Lead, CK Japheth, noted that the retail sector has over the past decade accounted for 18pc of Uganda’s GDPon average.
“The sector employs about 16pc of the country’s labour force, making it Uganda’s largest employer. With the majority of our livelihoods dependent on retail, businesses suffered a major setback after the pandemic caused major losses and business strain as the country sought to curb the spread of the virus,” Japheth noted.
Ms Emma Mugisha, the executive director at Stanbic Uganda said that the future of retail cannot be delinked from the conversation about the future of banking because the disruption presented an opportunity for use of digital tools within the retail sector, due to consumer behavioural shifts.
“As a bank, we create products to meet the customer’s needs. Leveraging digitization is an imperative and most of our customers were able to access their money using their digital devices and make transactions online. Businesses in the informal sector were able to operate e-transactions seamlessly because of this,” Ms Mugisha said.
Businesses that typically depended on walk-ins had limited access to customers prompting the use of delivery services as well as online channels for them to stay in touch with their customers. Those who were already operating online businesses experienced a surge in sales as consumers turned to online shopping she added.
“Our e-commerce shop saw an increase in visitors from 150 to 800 per day. Volumes increased by up to 1,500pc as demand for telemedicine shot up during lockdown” said Davis Musinguzi, the MD RocketHealth.
The ‘Future of Retail’ report shows that due to disruption of supply chains by COVID-19 restrictions, 20.7pc of retail businesses delayed goods delivery while 14.9pc have had to seek new ways of obtaining supplies. Prices of some basic agricultural commodities, such as sugar, cooking oil and rice, rose by 15pc. All these fluctuations and sharp drops are affecting retail trade.
Olga Kiconco, Lead Strategy and Consulting at The Innovation Village noted that the report presents an opportunity for retail innovation in the way retailers provide tangible value to consumers. “The use of alternative technologies and business processes cannot be ignored but should rather be embraced and incorporated in operations to offer consumers convenience and value for money and in turn growth and competitive advantage for retailers” she said.
She added that rethinking and redefining retail stores will take collaborative initiatives such as training on how to adopt new technologies and selling trends including creating and innovating solutions to suit localised environments.