Technology

Retailer bets on after-sale service to move online sales

shop

Yussuf Omar, Founder of Omaar Electronics and online marketplace oe.co.ke. PHOTO | SALATON NJAU | NMG

Yussuf Omar serviced orders from established online platforms from his electronics shop along Luthuli Avenue, Nairobi, and discovered that they had no after-sales services.

But the online platforms moved electronic items including mobile phones and their accessories so fast that Mr Omar made a profit by selling the items on wholesale.

“I hired software developers and put up my own online marketplace, oe.co.ke, to cash in on after-sales which is supported by a physical shop. I employed full-time technicians who respond to all issues in real time,” he said.

Earlier, Mr Omar was admitted to study medicine at a private university in Uganda but opted out.

He was employed by his uncle to manage his electronics shops. “I managed my uncle’s 14 electronics shops which gave me skills in running a business,” he recalls.

By 2015 he had saved enough money to open his own electronics shop using Sh0.5 million personal savings and Sh1.5 million soft loan from relatives.

A year later he opened two more shops on Luthuli Street and in Eastleigh estate.

Mr Omar approached other shop owners to market their products on the oe.co.ke platform at a commission.

He expanded his offerings with 18 employees running the platform while the shops have nine.

“Up to 75per cent of visitors to my online platform buy goods while 75 per cent visitors to my shops just window shop. The online platform is growing at about 200 per cent while physical shops report sluggish sales,” he says.

On the platform, customers choose products and pay via mobile or cash on delivery.

Nairobi customers are assured of same day delivery while upcountry clients get their goods within 24 hours, he said. The platform, he said, is being upgraded to include more products from vetted vendors (shopkeepers) who can now sell even items they do not stock.

“Unlike physical shops that must be strategically located to drive sales and have less space for products, online platforms are cheap to launch and maintain with the product offering ‘space’ being limitless,” he said.

Mr Omar said the online platform had opened new opportunities where he earns commission for selling other vendors’ products.

He has open a warehouse to store supplies.

“A physical shop requires goodwill but an online shop is free. I pay licences for my shops but the online platform only requires nominal regulatory fees paid to allow operationalisation,” he said, adding that physical shops require a higher number of staff compared to their online ones.