In 2017, Safaricom launched Masoko, an eCommerce marketplace. It was deprioritized in 2020, after failing to meet expectations.
I worked on Masoko until 2019, thus had an insiders view of its struggles. There are several explanations on why it struggled in the consumer market.
But, the main reason it failed to meet the company's expectations, was a misunderstanding of how marketplaces make money. Which had resulted in optimistic projections and undisciplined cost management.
This is the first of a series of posts on the different types of profit models that exist in the eCommerce space. The focus here is to understand what activities bring in money and which ones result in costs. The nuances or uniqueness of business models is beyond the scope of these posts.
When a website facilitates a transaction between two parties, it becomes a marketplace. Jumia, Amazon and Etsy connect buyers and sellers. Uber and Bolt connect riders and drivers. Airbnb connects travellers and homeowners.