Online Business in Tanzania
Due to the current economic climate in Tanzania, more people should start online businesses. As you can see, one of the biggest challenges of starting a business in Tanzania is the lack of sufficient capital. Wages are generally low and the cost of living in business centers like Dar es Salaam is high, which makes saving almost impossible and a very slow way to get enough capital for a venture.
Moreover, while the bank lending system has improved in the last decade, interest rates on bank loans are still high (between 15 to +20% on average) and often require borrowers to have a minimum of 20% of the funds needed for their business actually. All of this, along with the reduced circulation of money in the economy due to the government’s implementation of corporate taxes and the suppression of corruption, can prevent people with great ideas from starting a business.
Tanzanians are quick to adapt to new technologies
On the other hand, not only is internet penetration steadily increasing in Tanzania, the number of people with access to mobile phones is rapidly increasing. More than ever, Tanzanians rely on digital devices on a daily basis to communicate, obtain information and make decisions. And while Tanzania itself may not be the most competitive market for technological innovation, its people are quick to adopt new technological practices, such as researching and purchasing products online.
So, instead of spending money on renting a store and hiring employees to help you run it, you can use the small capital you have to promote your products online. However, creating and maintaining a functional and user-friendly website for your business can be quite costly, especially if your business is relatively new and you want to test the potential success of your products before you make a huge investment.
Fortunately, in Tanzania, there are platforms that provide solutions for companies to advertise and promote products online. This includes e-commerce and online marketplaces like ZoomTanzania, which feature products ranging from fashion items and electronics to agricultural equipment from different sellers, whether they are individuals, small businesses, or big brands.
But before you start selling products online, what can you gain from your online business apart from lower operating costs?
Doing business online can be incredibly profitable
Well, selling products online allows you to reach more potential customers than you might have in a physical store. For example, ZoomTanzania has more than 40,000 daily visits to its website, and many of these users may be searching for the type of products you sell. Moreover, some sites like Zoom help companies target customers by offering premium packages that enable their products to have maximum visibility on relevant pages. Therefore, if you sell kitchen items, your business and/or products have the opportunity to be the first thing people see in the home and living section of the website. This could mean that hundreds if not thousands of people will encounter your products every day, which is unlikely for a newly established brick-and-mortar store.
And what ensures that people in Tanzania will continue to buy products online?
The first thing is convenience, you don’t have to leave your home when shopping for products online. Find what you want, contact the seller, and have them deliver the product to you (unless it’s real estate).
Another advantage of finding products online is that buyers can compare prices across different sellers and brands, and easily find the best item for value and cost – without having to physically visit multiple stores and deal with the Dar es Salaam heat, lack of parking, and more. harassment.
Generally, people will continue to shop online because it saves them time and is an effective way to find high value products quickly. This is why platforms like ZoomTanzania have over 125,000 registered members.
However, there are some challenges to selling products online
Some people are not comfortable buying things online and are afraid of scams. Although well-established electronic marketplaces tend to take great measures to ensure the safety of their users, they cannot be fully guaranteed. Fortunately, platforms like Zoom have good working relationships with the police, who provide assistance when frauds occur.
Moreover, while internet packages are becoming increasingly affordable, some people still don’t want to use their data for anything more than WhatsApp and Facebook and check their emails. However, the truth is that searching for products online doesn’t use a lot of data (if you have a package) and it’s cheaper than taking a bus or using fuel to drive to a store location.
Finally, people in Tanzania have a wide range of choices due to the presence of informal markets and vendors. For example, if you want a new fire extinguisher for your car, you can buy one from a street vendor during rush hour, at your local garage, from a store, etc., so, depending on the type of item you’re selling, it can be tricky. for your online business to compete with these informal marketplaces.
The future of business in Tanzania is online
As mentioned earlier, there are many barriers to entry for people interested in starting a business in Tanzania, especially given the current economic environment, where there is a lot of market uncertainty and low money circulation. However, the Internet can offer a solution for those who are eager to start their business but have little capital. To sell effectively on platforms like Zoom, all you need is your products, a phone to take photos, and some capital to pay a reasonable fee to advertise your merchandise. So if you are thinking of starting to sell goods, don’t hesitate, just do it online.