Entrepreneurship Zone: 05 August 2020: Entrepreneur sees opportunity for childcare-related e-commerce and information

Wed Aug 5 05:39:42 CAT 2020

 <http://www.zb,co.zw/> Five years ago, Isis Nyong’o-Madison left a high-flying career to start a Kenyan company that provides localised information on mothering and childcare. Prior to this, she was vice president and managing director for InMobi in Kenya, business development manager for Google and senior commercial strategy manager for MTV.

She describes the leap from a corporate career to an entrepreneur as “terrifying”. “I didn’t have any aspirations to become an entrepreneur at all. I’ve always loved the places where I worked. The spark only came during my time at InMobi when I could see how the digital market was developing.” Online users were reaching a critical mass and in Kenya, various local digital companies were being founded.

In May 2015 MumsVillage was launched and this year, in July, a merger with Nigeria’s BabyBliss was announced. BabyBliss sells baby products from local and international brands in retail stores and online. Nyong’o-Madison now leads the team as CEO of the combined Bliss Group.

The group describes itself as an “omnichannel commerce, community and content offering” and the merger takes Nyong’o-Madison one step closer to reaching her original goal of a pan-African company that provides localised, high-quality content on parenting, along with the accompanying products for this part of a consumer’s life.

Deriving revenue from content

Initially, MumsVillage focused purely on providing relevant and localised content to its user base in Kenya. “I had really been living and breathing the development of the technology industry in my corporate career,” says Nyong’o-Madison. She saw that women, an audience she was interested in serving, were increasingly coming online. This, combined with the realisation there was no online, localised option for reliable information on the early stages of parenthood, crystallised her decision to start MumsVillage.

At the time, she believed it was too early for e-commerce but it has always been on the cards; together with the ultimate goal of taking the company pan-African.

Over the years, it became clear the content that fared best was always hyper-localised, such as recommendations about the best clinics or doctors in an area or how pregnant mothers would go about getting a package offering from local healthcare providers. Information on weaning is another example of content that performed well, as most acclaimed global experts would suggest foods unavailable in the Kenyan market. MumsVillage offered advice on the appropriate substitutions.

Nyong’o-Madison says it is difficult to monetise content. MumsVillage generated revenue from advertising across all its channels and never went the subscriber route.

One of its early lessons was that content should be offered to the consumer where they prefer to encounter it. “You have to meet the users where they are. That is why we don’t think of ourselves just as a website, we have all those different channels and we are serving our audience in particular ways across each channel.”

Aside from text-based articles and video content in various formats and on different platforms, MumsVillage achieved vast traction on WhatsApp, where the company currently manages over 30 groups.

In the early years, MumsVillage was self-funded, with occasional backing from angel investors. Over time, these investments enabled the company to grow but it became clear it would not be possible to build a content business able to deliver sufficient revenue to establish e-commerce without additional funding. In 2018, the company received funding through the TRANSFORM programme (a joint initiative from Unilever and the UK’s Department for International Development) which enabled it to set up its e-commerce platform in June 2019.

“The funding we received was critical to establish this proof point for e-commerce,” says Nyong’o-Madison. About six months later, through a contact with one of the key investors of BabyBliss, the conversation started which eventually led to the merger of the two companies.

Overcoming e-commerce challenges

Nyong’o-Madison admits the growth of its e-commerce business was slower than expected during the pilot. “Our hypothesis was that we already had the audience, we understood them and knew what products they would buy. We felt like we had a head start.”

The company quickly learnt it is difficult to change a consumer’s buying habits if the products are not offered at a much lower price point. If the consumer was already visiting a supermarket once a week, choosing to buy the same items from the MumsVillage site was improbable, unless there was a clear discount.

“One of the first questions we would get was: are the prices the same as the supermarket? We didn’t realise how crucial this would be,” she explains.

Peers in the e-commerce space would tell her a big user acquisition marketing budget was a necessity. “However, I felt we didn’t need that because we already had the audience. It turned out to be one of the biggest challenges. We then looked at targeted user acquisition and using our content to drive people to buy.”

Another challenge was finding the correct product mix, at the right price point. MumsVillage had to deal with high import taxes on some products on the one hand and, on the other, not having the clout to get volume discounts from its suppliers. Towards the end of 2019, the company noticed a change in consumer habits and an increase in sales when it offered some exclusive items that “put us on the map”.

One of Bliss Group’s strategies was to leverage the experience of BabyBliss in Nigeria (where the company has three stores) and venture into brick and mortar retail in Kenya. Covid-19 has de-prioritised these plans.

“There are so many uncertainties about what is happening with real estate and what type of properties we should look at,” explains Nyong’o-Madison. Part of the impetus of a physical location was to provide pickup points for Kenyan consumers who shop online.

“Users in Kenya are very sensitive to delivery costs. Trying to bake the cost of delivery into the overall cost of the product also has its challenges as you want to remain competitive in terms of price,” she says, adding the solution for pickup points could lie in partnerships with companies able to provide this service.

Consolidating first, before further expansion

Nyong’o-Madison says Bliss Group remains interested in expansion into other African markets but that it won’t be the focus in the short term.

“We have done some research on the possible opportunities for both content and e-commerce in our existing markets. It is around $2 billion in Kenya and $5 billion in Nigeria. Our market share is still a very small percentage of that. There is a lot of room to grow and that is why we are so excited about this merger.”

Bliss Group has several competitors but it is fragmented. Competition comes from supermarkets that are both offline and, increasingly, online. Secondly, pure offline baby stores still have a dedicated customer base; for example, there is a street in Nairobi that has small specialist baby stores from one end to the other. Horizontal e-commerce players which have a mother and childcare section on their sites also take up some of the market share. In addition, competition is increasingly coming from individual traders and entrepreneurs who sell products on Facebook and WhatsApp, in a less formalised way, often second-hand. Bliss Group would consider the possibility of offering a second-hand marketplace in the future, she adds.

The group is also investigating ways to expand its inventory to include new types of digital products. “[Due to the pandemic], people started spending a lot of time online and are now more comfortable with paying for digital products, doing banking through video or taking up telehealth options,” she says. “There is definitely potential to look at other digital products to create new revenue streams. We would consider partnerships with health providers to see how our audience can plug in more directly to online services offered.”-Howwemadeitinafrica

Isis Nyong’o-Madison

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