Capital Markets

Safaricom drops focus on growing e-store Masoko


Safaricom Plc chief executive Peter Ndegwa announcing Sh74.7 billion net profit for the full year ended March 2020 on April 29. PHOTO | COURTESY

Safaricom #ticker:SCOM has cut focus on growing its e-commerce platform Masoko to concentrate on key product lines such as M-Pesa.

The telco says Masoko was started in 2017 is no longer among its priority areas and it is now willing to forge partnerships with other e-commerce players for the benefit of M-Pesa.

Disclosures contained in transcript call covering events to end of July reveal the development that has seen the telco cut on the team size working on the platform.

The now Vodafone Business chief finance officer (CFO), Sateesh Kamath, made the disclosures when serving as Safaricom CFO.

“We are very happy for e-commerce companies to flourish. So, whether it's competitors like Jumia of AliExpress or whoever it is, when they flourish we are happy because our core M-Pesa business also grows,” said Mr Kamath.

“In terms of Masoko, it has been deprioritised because we are accelerating our focus on M-Pesa and some of the other product lines that we need to do.”

The development comes at a time more shoppers are embracing e-commerce to avoid cash-handling and minimise movements in the Covid-19 environment.

Safaricom in November last year announced a reduction on the number of products available on Masoko and cut ties with several vendors.

Mr Kamath revealed that only a lean team had been left to work on Masoko, with Safaricom’s focus now being to grow core products such as M-Pesa and maximise customer loyalty.

Safaricom, for instance, early November rolled out partnership with Jumia to reward shoppers who pay with M-Pesa a five per cent discount on transactions of Sh1,000 and above.

“We are excited to partner with Jumia to reward online shoppers across the country for paying with M-Pesa, even as we continue to celebrate our 20th anniversary,” said CEO Peter Ndegwa on the partnership.

Masoko platform has struggled to complete with market leaders such as Jumia that hosts more than 10,000 vendors selling over 3.5 million products.

The telco in 2018 also reduced the number of vendors selling goods on Masoko from 200 to 100 as it moved to tighten standards of goods being bought by customers.