Ecommerce Disintermediation in Africa

#1 · November 25, 2017, 2:16 PM

Note that as you build an ecommerce operation, you must deal with disintermediation.

Disintermediation is the removal of intermediaries in economics from a supply chain, or cutting out the middlemen in connection with a transaction or a series of transactions

Since we listed some of our Microchip PicKits in one of the leading ecomemrce portals in Nigeria, we have noticed that some buyers prefer to call us directly instead of buying from the portal. The implication is that if you sell to such buyers, the ecommerce has lost its expected commission. Simply, the portal has been disintermediated.

This is a problem which is not supposed to arise since the Terms of the portal made it clear that engaging directly with a merchant could result to loss of buyer protection. Disintermediation is common. You must think how to deal with such as you build your business.

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#2 · November 26, 2017, 3:31 AM

This is one of the problems when markets are not developed. A good return policy will help make people not indulge in disintermediation

#3 · November 26, 2017, 5:20 AM

I guess it has something to do with trust and 'bargaining mentality' of the buyer. Buyers most times feel that the prices listed on the platform might be too high, so they would want to buy from the 'source', since there's contact information. The ecommerce firm cannot entirely stop disintermediation on its own, sound policy and cooperation of the seller is needed in order to make it a success.

#4 · November 26, 2017, 8:14 AM

Good points from Guest and Francis. The key element will be improving the portal system to reduce this. I am not sure there is any technical way of eliminating it. As Francis noted, it is even possible that the callers do not trust what is online, and they want to verify/validate before they even decide to buy. In other words, you can send money and the person may not have stock. All of a sudden, you are stuck, as collecting your money will be hard

#5 · November 26, 2017, 12:50 PM

I think it is the mentality of the buyers regarding trust, the reputation of the e-commerce platform and location. I buy a lot of things online here even though I don't have 100% understanding of the details in Chinese (thanks to google chrome for auto translation to English), but I have the trust that my goods will be delivered, same as my friends. I am not sure we can eradicate that, buyers make calls in every part of the world before making any payments online (maybe more in developing economies). Anything that involves us parting with our few hard-earned coins, we want to be sure that it is going to the right channel. One notable thing on Taobao, (founded by Alibaba), sellers can create linkage with buyers, where one directly make an enquiry about the products or services via chatting on the e-commerce portal or even see the location of the seller. Shallom Professor.

#6 · November 26, 2017, 2:29 PM

Very good point Precious. I think this is part of the development of the ecosystem. In U.S., there is not even an option to talk to anyone in Amazon before buying there. But as you said, "trust" is that factor. If we do not have it in the offline world, we should not expect it to be automatic online.

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Ecommerce Disintermediation in Africa

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