In this e-commerce-themed episode, Co-Founder and CEO of Omnibiz Africa, Deepankar Rustagi, shares his insights about measuring success in the African e-commerce space and the business models that are best positioned to succeed within the broad online market.
🤔 B2B e-commerce asks that you throw away vanity metrics
Olumuyiwa here again. You may remember me from the previous edition of the APS newsletter. 😉
Last week, I was moderating a Twitter space conversation about the evolution of the African tech ecosystem in the last ten years. While recent observers may think that only fintech has been sexy for a minute, early players know that B2C e-commerce was where it was once at. Konga and Jumia slugged it out for African dominance in 2012, and South Africa’s Takealot—founded in 2012—has seen major success. But worsening macroeconomic conditions on the continent in the last decade means that most of the e-commerce action is focused on the B2B side of the market.
🔍 Why is everyone moving to the B2B space? According to Deepankar Rustagi, the Co-Founder and CEO of Omnibiz Africa, “the B2B space is more organised, structured and has a much larger frequency…so the opportunity [is] in the B2B space. There's a very big difference when we compare it to a normal e-commerce business. A normal e-commerce business is always exploring to find where there is need.”
Deepankar refers that B2B e-commerce businesses focus on the army of small and medium businesses in Africa. You know that army of informal retailers you always read about? They often need a more efficient supply of goods, better logistics, or even opportunities to scale their businesses. You could say that they’re always looking for better value. So what should matter to a B2B-focused business in a world where vanity metrics reign supreme?
📈 Focus on repeatability, retention, and Growth
If you follow B2C e-commerce companies, it’s easy to understand that Gross Merchandise Value (GMV) is the holy grail of metrics. GMV, which is the value of all goods and services sold on an e-commerce platform, is so important that many companies have really interesting ways to measure it. For instance, one e-commerce giant in Africa counts returned goods and orders cancelled as part of its GMV.
📌 Should a B2B e-commerce company obsess over its GMV so much? Deepankar doesn’t think so because when you focus on businesses, acquisition isn’t the end goal. Instead, “retention by creating value for the customer is the end game. If you could measure value for the customer, that would be the perfect metric.”
What’s my big takeaway from this episode of the African pre-seed podcast? When you’re a B2B e-commerce company, focus on the two R’s and one G: repeatability, retention, and growth of your customers.
That’s enough spoilers. Listen to Deepankar speak on the metrics that matter.
💡 What to look forward to in this episode:
- Identifying pain points that need solving within the African B2B e-commerce market [02:11]
- Pursuing the right metrics when looking to enter the B2B space in Africa [04:03]
- Oversimplifications about the 'wholesaler' within an African context [06:19]
- Gross Merchandise Value (GMV) in the B2C space vs B2B space [08:14]
- Key metrics for B2B founders [10:31]
- Analyzing the effectiveness of your business model [12:15]
- Tools to measure and follow the right metrics [14:36]
- Adding value to the business through supply chain visibility [16:22]
- Personal lessons learned from scaling B2B e-commerce in Africa [19:36]
- Coming to terms with failure as tech entrepreneurs [22:35]
- Simplifying workplace culture and hiring processes [23:43]
- Three key personality traits for B2B founders [26:05]
CONNECT VIA SOCIAL MEDIA:
- Connect with Deepankar Rustagi on Twitter and Linkedin.
- Connect with Hope Dithlakanyane on Twitter and Linkedin.
- Connect with Philani Mzila on Twitter and Linkedin.
- What was your favourite quote or lesson from this episode?
- What topic would you like for us to feature on a future podcast?
Let us know via the hashtag: #AfricanPreseedPodcast
🔌 USEFUL RESOURCES:
- ARTICLE: Rethinking Metrics in B2B Ecommerce by The Flip Africa.
- ARTICLE: Enriching the Lives of FMCGs Retailers in Nigeria by Business Elites Africa.