No question about it, Kenyan shoppers are so price driven that even Citizen TV has dedicated a time slot every Sunday on its 9pm news bulleting to rate the various supermarkets’ prices for basic commodities. As a business owner you may have experienced this price psyche at work: Kenyan callers enquire about your goods’ or services’ availability, and the next question won’t be about the quality or delivery deadlines or referrals from past consumers, but about price. ‘Unalipisha pesa ngapi?’
This trait or virtue, depending on which side of the commerce fence you sit, makes group buying in Kenya an attractive suggestion, especially during this festive season. How does group buying work online? A business offers discounts on one or some of its products through a specialised website such as Rupu, Zetudeals and Mocality. For these discounts to be successful for both the businesses and websites, a certain number of people have to sign up for them. Once this number has been met, buyers then print their individual vouchers and then claim their discount at participating businesses. You and the website share the proceeds according to a pre-determined ratio.
Should your SME participate in group buying especially during this festive season? Below are some of this tactic’s pros and cons.
- Kenyans already possess an insatiable appetite for discounts, so you won’t be introducing them to a new concept that will need time and awareness for them to adopt.
- There is an existence of ‘match making’ websites, giving you a choice of sites to choose from.
- Group buying is a lightning fast way to build your brand name in your potential consumers’ minds and encourage them to visit your business.
- Your chosen website typically publicises the deals, saving you the work and the expense.
- You can measure the effectiveness of your festive season discount campaign against receipts.
- Nairobi-based shoppers are the overwhelmingly active participants in group buying because of their exposure to such trends and Internet access. This limits your SME from spreading your festive marketing offers to other counties if you have branches there.
- You risk attracting bargain hunters who only make your cash registers ring when you offer discounts. I.e. you won’t see them again after January 1, 2012.
- Without access to hard data about which website attracts the most eyeballs, you risk engaging in guess work regarding which site to place your offers in. Insist on each site’s Google Analytics’ information for at least 3 months prior to the festive season.
- Some people are questioning not only the long-term viability of group buying websites’ business model such as Groupon, currently the world’s largest site for example. Concerns about the commission rates businesses currently take are also contentious issues.
- Companies may decide to get rid of group buying sites, save that money and announce the deals on their own websites. You risk making a loss if this happens.
- Your brand risks being labelled as a discount brand, robbing you of the ability to increase prices when you need to.
Group buying in Kenya, just like any other festive season sales bait, should be used only after you set goals.