This document discusses opportunities for e-commerce in frontier markets like Mozambique. It describes how the author founded an e-commerce company called Compra.co.mz in Mozambique in 2014, seeing potential for growth. However, within a year the political and economic situation in Mozambique deteriorated significantly, with unrest, scandals, inflation and frozen investments slowing the market. This forced the company to adapt by focusing on basics, monetizing other services, and exploring new categories to survive the difficult conditions. The author discusses lessons learned around adapting to local needs over ideological purity and being willing to change course when conditions change.

1. Jonathan D. Novotny
[TITLE PAGE]

2. | E-Commerce opportunities in
Frontier Markets
Jonathan D. Novotny
Compra.co.mz

3. ADAPT

4. OR
DIE

5. OR
SPEND LOTS
OF MONEY

6. & then
DIE.

7. | WHY do we seek for
opportunity in emerging
economies?

8. Emerging economies = opportunity
Game changers

9. Emerging economies = opportunity
Predict.

10. Analysing - Options

11. Analysing - Options

12. Analysing - Options

13. Analysing - Options
20152016
Drivers behind the Emergence of Sub-Saharan
Africa’s Emerging Markets

14. Analysing - Options
20152016
Inhibitors of Growth in Sub-Saharan Africa

15. Drivers behind the Emergences of Sub-Saharan
Africa’s Emerging Markets
KENYA
SA
CHINAUAE
MOZAMBIQUE
Analysing - Options

16. | The BIG Question:
A. Is it better to have a larger market-
share in a smaller country?
I. Is it better to have a generic market or
niche?
II. How niche is your market going to be?

17. Did you ever do
anything
crazy?

18. | Background:
Zambia, Mozambique,
East Africa, W.Africa –
Sierra Leone, Europe, SA
& Moz.
• Missions & Social Work
• 2009 - Founded Change
the World Trust
• 2013 – Thesis on eComm
• Oct 2014 - Founded
Compra.co.mz
# If you build something meaningful, the result will
always be the same.

19. Attitude: “Just jump!”
| A Story

20. | A Story
Why?
• Pro-active market - Ready in two years.
• Start-up in eCommerce in Southern Africa.
• Booming – Mozambique was well on it’s way
to becoming the most attractive investment
destination in Africa

21. | A Story
Version 1.1

22. | The Team - 2015

23. | The market bottomed out;
• Political unrest,
• Kidnappings,
• Major scandals,
• War & refugees,
• Economic crises,
• Donor funds frozen,
• Human rights abuses
& assassinations,
• Major inflation,
• Cost of living sky-
rocketing .
• Some investors froze
until 2017.
• Oil & Gas
investments delayed

24. | Throughout history…
We learned how to build.

25. |We learned
about the
elements,…
Where people learned how to…

26. And how to protect ourselves.
Where people learned how to…

27. | How to survive in extreme environments.
Where people learned how to…

28. …jump over camels.

29. | We learned how to adapt

30. …out of necessity.

31. | Practical Examples of Unexpected
Events
• 2015 – Market fluctuations
• Sometimes weekly changes in prices
• Vendors unable to supply updates efficiently and us
unable to efficiently upload modifications – Resultant
unhappy clients.
• 2016 – Worsening market conditions result in
massive decline in retail.
• Vendors reducing stock.
• Price uncertainty.

32. | WHAT CHANGED IN 1 YEAR?
• Lower valuation
• Harder fundraising
• Harder market
• Smaller market
• More price pressure.
• Higher pressure to break-even sooner.

33. | What this meant for us?
• Break-even sooner – Less sexy – More basics.
• Monetise alternative business services
• Cost saving
• Exploring NEW Categories
• Innovate – How are we doing that?

34. | CORPORATE

35. | VENDOR SALES

36. | VENDOR
SHOPS

37. | Lessons - IDEOLOGY
• Merge
– with the Status quo. Compromise.
• Listen,
– Clients, suppliers & observers.
• Expect
– To be wrong.

38. | Lessons - PRACTICALLY
• Leverage partners.
• Handful of clients.
– Get a handful of clients before you begin.
• Don’t be afraid of adapting to local appetite,…
– Even if it is not pure ecommerce.

39. | EXAMPLES

40. | Example 1 : JUMIA & COD
• Essentially turning the platform into an
ordering service and NOT a purchasing one.
• Thereby reducing efficiency and cost-savings
but increasing sales.
Learning:
If you want to succeed, it may mean a hybrid
business and not pure ecommerce.

41. | Example 2: Online Liquor Retailer
• Has shop & warehouse
• Does deliveries 24 hours
• Has telephone operators telling clients
that they are the Director to gain trust
and buy-in.

42. | Example 3: Classifieds Engagement
MOBO Free - Classifieds in Sub-Saharan Africa
• Hired youth in schools to promote the
“Forum” feature as a way to increase
engagement on the platform, boost SEO and
grow market.

43. There are exceptions.

44. THANK YOU!
JON@COMPRA.CO.MZ
+258 84 744 5292
+27 768872701