Wasoko: Defying odds to ignite DRCโ€™s digital economy ๐Ÿ‡จ๐Ÿ‡ฉ

Wasoko: Defying odds to ignite DRCโ€™s digital economy ๐Ÿ‡จ๐Ÿ‡ฉ

#consumer markets
Wasoko's expansion into the central African market not only highlights the remarkable success of a homegrown e-commerce firm but also underscores the tremendous opportunities available in the thriving digital economy of the Democratic Republic of Congo.

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Kenyan e-commerce firm, Wasoko.com, is experiencing a transformative phase marked by a rapid expansion into new markets. 

The latest expansion drive has seen the company, which operates on a business-to-business (B2B) model, initiate operations in the Democratic Republic of Congo (DRC).

Originally launched in 2016 as Sokowatch, Wasoko.com specializes in providing the free, same-day delivery of essential goods and financial services to informal retail stores across various African markets. The platform allows retailers to place orders at their convenience through SMS or a mobile app and receive deliveries via Wasoko's in-house logistics network.

According to reports from Business Daily, Wasoko.com will start off serving its clients from a base in Goma, the capital of North Kivu province, bordered by Uganda and Rwanda, in the vast country's far east. 

The move is significant, positioning Wasoko.com as the first e-commerce platform from the East African Region to venture into the burgeoning DRC market. Notably, it is also the company's second foreign market debut in 2023, following a successful launch in Zambia earlier in the year.

Wasoko.com has gained a stellar reputation for transforming new markets into profitable hubs, a notable achievement at a time when many B2B-focused companies are struggling to sustain their business models. 

Kenya's Zumi ceased operations in March, just two months after the Coca-Cola-backed Wabi closed down, following rollouts in Nigeria, Kenya, and Egypt. Competing firms like MarketForce have had to resort to layoffs to stay afloat.

However, Wasoko.com is charting a different path. In neighboring Rwanda, its entry in 2019 generated revenues of US$2 million in the first year and soared to an impressive US$48 million in 2022, serving over 5,000 informal retailers in that country alone.

Daniel Yu, the founder and CEO of Wasoko.com, emphasised that the success of the venture's foray into the DRC hinges greatly on cross-border logistics between Rwanda and the DRC. 

"The DRC presents a substantial market opportunity for Wasoko... through our cross-border logistical capabilities, established platform, and extensive product range, we strongly believe we are well-positioned to unlock this potential," he stated in an interview published on Ventureburn.com.

With a population of over 100 million people and as the youngest member of the East African Community (EAC), the DRC is strategically positioning itself to match the economic prowess of its EAC counterparts.

This expansion comes at a time when the Central African nation is witnessing an economic surge. The latest African Development Bank (AfDB) outlook for the Central African region revealed that the DRC's economy grew by an impressive 8.5% in 2022, with projections indicating even higher potential growth rates, well above those of its neighbours in a region that is seeing substantial growth across the board.

One of the driving factors behind this economic boom is the growth of the telecom industry. Despite mobile penetration in the DRC being modest at 44% - approximately 20% below Africa's average of 64% - it has made significant progress since 2010, when penetration stood at a mere 18%, according to the Global System for Mobile Communications (GSMA) 2022 market intelligence report.

Apart from Wasoko.com, other e-commerce companies are also eager to tap into the opportunities presented by the DRC market, reinforcing the country's immense potential. Market research firm Storeleads.app reports a positive uptick in B2B stores like Shopify in the DRC. Between 2019 and 2022, the number of active Shopify stores more than doubled from 5 to 12.

Moreover, other B2B e-commerce giants such as Magento, WooCommerce, BigCommerce, and PrestaShop have also established a presence in the country. This trend aligns with the rise seen in digital infrastructure, including the emergence of data centres, offering hope for sustained communications and e-commerce growth in the DRC.

A significant development contributing to this digital evolution is the recent announcement by French telecom giant, Orange, that it is to launch its 15th Digital Center in Africa, located in Kinshasa.

However, according to Albert Zeufack, a World Bank economist, the DRC must further embrace digital tools in diverse settings to leverage the opportunities presented by the digital economy. 

"Expanding and utilizing digitalization as a tool, both in urban and rural areas, whether for targeted cash transfers or to combat marginalization, will ensure that no one is left behind," he states.

A 2022 World Bank study underscored the potential impact of a 10% higher broadband penetration rate in the DRC, indicating it could lead to an additional growth of approximately 2.5% of the national GDP and generate nearly 700,000 jobs.

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Links: https://openknowledge.worldbank.org/entities/publication/a07ce227-6995-5fbe-af65-0854e71add3b



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