Opportunities & Challenges for FinTech in Post-Covid Mauritius: E-commerce



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Globally, the Covid-19 crisis has seen people and businesses adopting new digital platforms by necessity, especially in areas such as consumer staples, online communications, health, education and digital content. But can this behaviour be expected to outlast the crisis? 

Indeed, as online users acclimatise to a new behaviour pattern, explore the efficiencies of the online world, and adapt to the “new normal” of a digital life, it may not be a vain hope that the crisis becomes a force for good.  

Against this backdrop, the Mauritius Africa FinTech Hub (MAFH) held a webinar on 28 May 2020 on the topical theme of Opportunities & Challenges for FinTech in Post-Covid Mauritius: E-commerce to offer insights to the ecosystem on the growth and potential of e-commerce in Mauritius. 

What was the panel discussion about?

The event is the first of many webinars which will be held by MAFH under the theme of opportunities and challenges for FinTech in a Post-Covid Mauritius, this time with focus on e-commerce. 

The importance of drilling deeper into the e-commerce space in Mauritius cannot be contested as Covid-19 has led to an express mandate to explore the technical feasibility of the e-commerce market to avoid the need for people to physically go into shops. Of course, e-commerce is not new to Mauritius but it is the recent Covid-19 crisis that has seen an uptick in consumer engagement and greater proliferation of such platforms. 

The panel discussion was moderated by Lisa Dosooye, Head of Skills, MAFH with following speakers:

Suyash Sumaroo

Suyash Sumaroo

Founder, Moris.Store

Suyash has over 10 years development and managerial experience in software development and is experienced in the Cryptocurrency and Blockchain technology. During his entrepreneurial journey, Suyash has been involved in the setting up and deployment of many SaaS platforms in Mauritius and the surrounding regions in the Indian Ocean.
 
Moris.Store is an online ecommerce platform which allows businesses from any sector to create their own branded online shop within a few hours. Moris.Store uses gamification via Hustlemania as its rewards programme to allow for more engagement on the platform.
Delphine Lagesse

Delphine Lagesse

Group Strategic Innovation & Excellence Executive, IBL Group

As Group Strategic Innovation & Excellence Executive for IBL Group for the last 3 years now, Delphine identifies and implements group level projects for the CEO with a strong innovation and excellence flavour. This is achieved by placing customers at the heart of everything IBL does and always looking for what can really bring value to the organisation as a whole, Such projects expend from the digital transformation plan of IBL to the group loyalty programme, wiiv, which launched in June last year.
 
IBL is a world-class diversified group based in Mauritius and active in 22 countries worldwide. It works and invests in over 280 companies in nine industries globally, namely AGRO & ENERGY, BUILDING & ENGINEERING, COMMERCIAL & DISTRIBUTION, FINANCIAL SERVICES, HOSPITALITY & SERVICES, LIFE & TECHNOLOGIES, LOGISTICS, SEAFOOD and PROPERTY. The team consists of more than 26,000 people.
Yannick Ayacanou

Yannick Ayacanou

Founder and Director, Priceguru.mu

As the CEO of PriceGuru, Yannick is responsible for the day-to-day operations and strategic leadership of the business. Yannick co-founded the company in June 2014, with Christopher Rainer. He holds a Masters in International Management from the University Jean Moulin in Lyon (France).
 
Price Guru Ltd, incorporated in Mauritius in June 2014, is the No.1 online e-commerce platform in the Indian Ocean, attracting over 350,000 visits per month. Priceguru’s value proposition is built on relentless innovation and customer-centricity to adapt to shifting consumer trends and to stay ahead of the technological curve. Priceguru.mu uses the latest technologies and partners with best-in-class local and global vendors to offer over 30,000 products through their e-commerce platform.
Vishal Anand

Vishal Anand

CEO & Founder, Mycart.mu

Vishal has 15 years of experience in technology transformation, Digital media and the customer service sector. He has been working in website development for the last 8 years and prior to founding MyCart, held senior positions at HSBC Bank and Reliance capital.
 
MyCart is among the top e-commerce platforms in Mauritius providing online retail shopping services of various products. MyCart has been serving the whole island since 2016 and offers free delivery service and fast credit facilities that makes it practical for customers to shop from the comfort of home.  MyCart ensures a highly secured and efficient payment gateway where customers can carry out any kind of payment online, without any hassle or encumbrances.

Will we continue to see the same levels of growth in e-commerce Post-Covid? 

In response to the moderator’s pertinent question on the likelihood of e-commerce persisting after the crisis, the expert speakers were united in their assertion that e-commerce is here to stay. However, the pattern of purchases might shift from necessities such as groceries and personal care items to niche products such as DIY goods, home décor, sports equipment and baby products.

Suyash Sumaroo, who most recently founded the e-commerce initiative, the Moris store, and is a well-known figure in the FinTech space in Mauritius as the pioneer of blockchain initiatives such as Horizon Africa and Codevigor, noted that the importance of Covid-19 lay in triggering a change in mindset. “In these 2-3 months, people have learnt by being forced to use e-commerce. This is a step that usually takes a lot of time,” he asserted.

In addition, Delphine Lagesse who hails from the IBL Group which encompasses both traditional brick-and-mortar structures such as the Winner’s supermarket chain as well as online initiatives such as PriceGuru.com, drew an interesting comparison between Mauritius Post-Covid and China Post-SARS. She noted, “The interesting thing is to compare Mauritius now with China in 2003 during SARS which really helped expand e-commerce and digital payments – Alibaba launched Taobao and Alipay. In Mauritius, people were scared in the beginning and there was an onslaught on supermarkets amid fears of food shortage. E-commerce groceries and digital food stores were being set up daily, with the case for online portals intensified by the collapse of tourism and shutdown of restaurants.”

Yannick Ayacanou, who co-founded PriceGuru.com with Christopher Rainer and now offers over 40,000 products over the pioneering e-commerce platform in Mauritius, noted that e-commerce emerged as the only safe option when Mauritius was placed under total lockdown and supermarkets were closed. “Consumer behaviour changed overnight and we saw many Mauritians embrace the digital domain. Consumers’ appetite for convenience will continue to grow and many traditional businesses will realise that moving online is an imperative.”

Vishal Anand, who brings over 15 years of experience in the technology space culminating in the creation of Mycart.mu in 2018, cited anecdotal evidence from friends on the ease and convenience of shopping online. “Electronics and electrical appliances will continue to be bought online,” he asserted.

Has the profile of online shoppers changed since the crisis?

The expert speakers were next requested to comment on, and contrast, the profile of online shoppers before and after Covid-19 in Mauritius. Interestingly, the speakers were unanimous in their opinion that the shopper profile has changed towards greater financial inclusion, accompanied by the enhanced use of online payments to mark a more permanent change in customer behaviour compared to cash on delivery. All the speakers also stressed that orders poured in from across locations with no overt gender differences. 

Vishal of Mycart.mu emphasised that the crisis has seen older people purchasing online. “During Covid-19, our online chat support was present in full force to help these people who had never used e-commerce before. A significant 90% of the shoppers paid online with a combination of debit cards, credit cards, MCB juice and my.t money being used.”

Yannick stated that the crisis saw PriceGuru.com branch out into the grocery segment and prioritise order fulfilment for the elderly and vulnerable segments of the population. On payment patterns, he noted that “pre-Covid we operated a lot on cash on delivery and only 20% of the population could purchase online but during the crisis, the emphasis on no cash exchange or card on delivery has accelerated user acceptance of digital payments.”

Delphine pointed out that what was more significant than the change in payment pattern was that in the inherent purchase behaviour. “Before the pandemic, shoppers looked at quality, price and brand, in that order. Now, people focus on availability, then price, and finally, quality. The future of brand engagement will be interesting to follow as user behaviour continues to evolve.”

Suyash asserted that cash on delivery still remains an integral part of the payment pattern. Moreover, there is a case for increased use of technology with WhatsApp having been used a lot as a makeshift e-commerce platform, putting a lot of strain on the supplier to fulfil orders placed in random formats, even as it prioritises customer convenience. “Apart from launching the Moris Store, we also used the services of Hustlemania to provide an online loyalty platform with shoppers getting online tokens to use for subsequent purchases as we want to make buying online a fun activity,” he highlighted.

On a side note, a quick poll conducted during the webinar also showed that a majority of participants have been using e-commerce before and have continued to do so during the crisis, while the main payment channel used is online banking platforms.  

Is e-commerce a threat or opportunity for traditional retail SMEs?

When asked if e-commerce constitutes an opportunity or a threat for traditional SMEs in the retail space, the speakers largely viewed it as an opportunity, albeit one which comes with the caveat of leveraging the ecosystem for support rather than going it alone. 

Delphine noted that it is definitely an opportunity for those who do not have a physical distribution channel. “For SMEs, my advice will be: Do not start with building the front end which is normally the easiest part of the process. Instead, focus on your marketing plan, your USP for consumers, your business skills as well as the back end of order fulfilment, customer service, customer experience and last-mile delivery.”

Yannick also noted that while smaller businesses tend to be more agile than bigger and more established ones, e-commerce is a capital and asset heavy business which also requires a huge investment in market research. “To my mind, the best way out for SMEs would be to collaborate with existing platforms such as PriceGuru.com. Take the case of Amazon, for example. More than 50% of Amazon’s revenue comes from third party sellers, essentially SMEs, which have been able to reach out to many consumers through Amazon.”

Suyash stressed the importance of a technology-centric view for SMEs in terms of looking at e-commerce as “not just a method of selling online but a digital transformation of all their activities.” He extolled the benefits of the data analytics capabilities that an e-commerce platform places at the beck and call of the online retailer, noting that such SMEs would be able to see what is happening real time on the customer demand front and prepare for the future.

Vishal asked SMEs to go online as a first mandate. “Set up a Facebook page, be present online, and showcase your products. To know the customer and find out what they want to purchase online is critical. Do not jump into the e-commerce space yourself as an SME but leverage the existing capabilities of larger service providers.” 

What are the challenges to growing e-commerce?

Finally, to the query on challenges to growing the e-commerce space in Mauritius, all speakers alike focussed on capital constraints as an enduring theme but also touched upon aspects such as digital literacy, vocational education and cultural issues that might persist Post-Covid as ‘blockers’ to the expansion of e-commerce. 

Yannick noted that as a start-up, Price.Guru faced a huge issue in accessing capital from traditional banking channels and their turning point was raising series 1 capital from IBL in 2018. In addition, he focussed on the need to have schools and universities upskills students with requirements for the future. “If we put innovation at the heart of the university system, the growth of this sector will be unparalleled.”

For his part, Suyash provided an interesting insight into the Moris Store having been launched, albeit under a different name, in 2014 but remained dormant since as online payment solutions were not conducive. He stressed that banks continue to be heavily regulated when it comes to the online payment space and the transaction fees in particular needs to be lower. “The Bank of Mauritius has announced that it is working on a Central Bank Digital Currency. While this initiative will take time to implement, in time it could be a real boost to e-commerce platforms here.”

In Vishal’s view, cultural issues continue to pose a constraint. He noted that Mauritius has an ageing population that still focuses on traditional retail. “We have seen too many opportunistic endeavours which have shut down overnight. Hence, customers are not comfortable paying before delivery. Make traditional shoppers come online and give them an assurance of a return policy to trust e-commerce.” 

Finally, Delphine noted that the economic situation with job losses and purchasing power decreasing is going to be the most critical constraint to the growth of e-commerce, followed by bottlenecks in the supply chain due to limited supply of imported items. Another core blocker she stressed was bad customer experience from poor customer service to online fraud, indicating that consumer protection units should be actively involved. “All e-commerce players should come together as an association and work together with authorities to put conducive regulations in place. The government should come up with incentives and support SMEs to keep their businesses afloat.”

The way forward: Opportunities abound but challenges remain

In conclusion, there is a clear consensus on the opportunity the Covid-19 crisis poses for e-commerce in Mauritius with an evident uptick in consumer interest and a proliferation of online platforms, as contactless payments gain traction and the profile of online shoppers expands to encompass the elderly and vulnerable segments. However, it is equally clear that access to finance, cultural challenges, digital financial literacy, skills in the workplace such as coding and customer service, as well as logistical and regulatory barriers stand in the path of growing the online retail space in Mauritius, making a case for a collaborative approach between established players, SMEs and the government.

As Mauritius stands at the crossroads of the e-commerce and traditional retail space, MAFH is in the unique position of bringing together all established players and start-ups alike to spearhead this movement towards customer convenience, ease of purchase and financial inclusion, with a member base that boasts large conglomerates such as IBL on the one hand as well as e-commerce ventures such as the Moris Store, Mycart.mu,  and PriceGuru.com on the other. 

Q&A - What would be the main challenges for e-commerce platforms with regards to the Mauritian Payments landscape?
Suyash Sumaroo:
There are different challenges which fall into one of these 4 categories:
1. Fee Structure – a lot of payment providers in Mauritius charge high fees which make ecommerce-based activities in Mauritius less attractive for a lot of vendors.
2. Technical – for some of the payment providers, the implementation and integration steps are sometimes complex and long.
3. Regulations – although the situation has changed during the covid crisis, setting up merchant accounts to accept online payments was a long and arduous task. Even something as simple as setting up a new bank account for a business is something which requires a lot of paperwork and time.
4. Lack of innovation – the payment landscape in Mauritius lacks innovation. The same structure and technologies have been used for the last decade and there lacks innovation in terms of better integration through the use of API or open banking systems.
Q&A - One of the problems I have faced is technical talent to help build new ecommerce startups. What has been your experience and challenges with that in building your startups?
Suyash Sumaroo:
The lack of technical talent in Mauritius is a problem that spans across a lot of sectors including ecommerce. Being a startup, we focus a lot on getting the right candidates that we can internally train to the level that we want them to be. Although this is a long and resource-intensive way of doing things, currently there is no other way of finding and creating the right talents.
Q&A - Do you think a mobile application is a need for an ecommerce website in mauritius?
Suyash Sumaroo:
The relevance of mobile applications depend on the use case and the target audience. For instance, for certain tech-savvy audience segments, having a mobile application could be more important than having an ecommerce website. However, it is also important to note that the dynamics of a mobile ecommerce app and an ecommerce website are very different in terms of engagement, seo, and discoverability, that is, online visibility
Q&A - Seems like the online companies are not regulated and open and shut business anytime. How will consumers be protected if the company shuts down and the people responsible cannot be contacted?
Vishal Anand:
Mycart is a company duly registered with the registrar of companies as per the Mauritian laws. We advised all customers doing transactions online to check that the companies are registered under the Mauritian laws; info available on MNS platform (https://portalmns.mu/).