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Big winners in face of coronavirus

BUSINESS
By Moses Michira | April 3rd 2020

Safaricom is emerging as an unintentional beneficiary in the face of coronavirus pandemic, following the government directives for Kenyans to observe social distancing and work from home.

Other winners, from an assessment conducted by The Standard, include manufacturers of hygiene products, specifically sanitisers and handwash, and e-commerce platforms Jumia and Glovo.

A surge in the number of requests for home fibre connectivity and increased communication through calls, text messaging and other digital platforms have only translated to more business for telcos.

Streaming videos

Staying at home means consumers are spending more time streaming videos on YouTube and watching movies on Netflix, a confidential management brief has shown.

Collectively, the streaming applications make up for 67 per cent of all data consumed via Safaricom cable internet connection.

It could explain why the company’s worth has been partly cushioned from the ravages of the pandemic since the outbreak was reported in Kenya last month.

“On Fibre To The Home, we have seen a growth of 20 per cent in unique users,” reads the brief in part.

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Such unique users would be the consumers who would otherwise be working from the office but are today offsite, enabled by internet connectivity.

Data consumption has risen by half since the government gave orders barring public gatherings, “demonstrating that more Kenyan’s are indeed studying, working and connecting with their loved ones from home”.

Safaricom also notes the reduced physical interaction between their consumers is directly attributable to increased communication on the phone.

Other mobile service providers, Airtel and Telkom, are likely to benefit since the same factors favour the wider telecommunications industry.

New opportunities

Staying at home is providing new opportunities for e-commerce platforms like Jumia as households embrace online purchases on products, including groceries.

Sam Chappatte, the chief executive of Jumia, said hygiene products and foodstuff are the newest front for growth for the platform.

Traditionally, the ordinary customer bought high-value products such as electronics but selling everyday consumables had remained elusive for Jumia.

“Consumers are increasingly getting organised and planning their purchases on groceries, and we have noted a big jump on orders,” Chappatte said. 

Besides groceries, the firm has partnerships with food vendors allowing consumers to place their orders directly to the restaurants while Jumia makes its money from making deliveries.

Glovo and Uber Eats, Jumia’s rivals in food delivery, are among the other winners following the orders banning restaurants from allowing patrons to eat in-house.

William Benthall, the country general manager for Glovo, told The Standard that orders have soared three-fold within March alone, mostly from customers seeking food deliveries.

Just like Jumia, the firm makes its money by charging for deliveries, with payment varying depending on the distance from the seller.

Plastics manufacturers could perhaps be the biggest winners following huge demand for taps which are used in the assembly of makeshift sinks for hand-washing.

Walk-in customers

Thousands of small businesses have had to invest in these “sinks” as a requirement, since their walk-in customers have to first wash their hands before entering establishments, including kiosks.

A spot check in various outlets have shown that the selling price of the taps have risen three-fold on the back of huge demand as businesses rush to comply with handwashing directive.

While it is unclear whether the manufacturers have also raised their prices, they have gained big through the increased market for the item that has hitherto had little use among this crop of customers.

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