“You see like Facebook now we’ll be going for the masses. It will not just be limited to a few people within our sphere.”Kamau, Small Trader of Flash Disks
Summary of Findings
- Micro-entrepreneurs use a variety of channels, including Facebook and WhatsApp, to connect and coordinate with customers
- E-commerce platforms are leveraged by more digital savvy micro-entrepreneurs
- Digital ‘trade unions’ are emerging over WhatsApp
- Micro-entrepreneurs promote their writing skills across online work platforms
Markets are easy to recognize. Sellers come together in one place to promote their goods in order to attract buyers. Buyers flock to a set location to search for the products they wish to purchase. The concepts of bringing together buyers and sellers in one place, be it in physical, dusty market or across a digital, data-fuelled platform, are similar. Usually, and ideally, both modes enable supply to be matched with demand, and benefit from the network effects of additional buyers and sellers.
But one key to digital markets is that they facilitate better, broader discovery, by (hopefully) the ‘right’ customers, with little geographic constraints. This section, one of four detailing “platform practices”, describes how the 27 micro-entrepreneurs we interviewed use platforms to promote products and services, and find new customers.
1. Micro-entrepreneurs use a variety of channels, including Facebook and WhatsApp, to connect and coordinate with customers
Despite e-commerce sites (like Jumia and SkyGarden) providing an end-to-end service, we observed that self-contained, all-in-one messaging and coordination is the exception not the rule. Instead, most of the micro-entrepreneurs we spoke to use a patchwork of different social media platforms, along with phone calls and in-person meetings, in the selling and buying cycle. In Kenya, Facebook and WhatsApp are the platforms most widely used by micro-entrepreneurs as ‘marketplaces’ to connect with buyers. Of the 27 micro-entrepreneurs we spoke to in Kenya, 24 used Facebook and WhatsApp to promote, advertise and secure business. As Kioko, one entrepreneur, told us:
“In fact, a lot of business is coming from social media. Per day I can sell like 5 flash disks through social media.”
Below we look at how these different digital and non-digital tools are used, and what influences this behaviour.
Many micro-entrepreneurs use Facebook as a powerful marketing tool, leveraging the network effects of social media to connect with a wider audience beyond their direct friends and contacts. Several of the people we spoke with commented on the role Facebook played towards customer acquisition:
“You see like Facebook now we’ll be going for the masses. It will not just be limited to a few people within our sphere….You reach more people through Facebook groups. I post in eighty groups.”Kioko, Small Trader of Flash Disks
“On Facebook…I’m in like 100 groups.”Kipchoge, Online Merchant and Freelance Writer
“Facebook and Instagram…some people are just friends you have never met them in person. You are just social media friends.”Zawadi, Baker
Facebook is seen as a volume game, where interactions are based on quantity not quality. It serves as a perfect channel for exposure, but doesn’t provide the level of personal interaction people need to make a sale or purchase. Sales are generally achieved through more personalised interaction.
While micro-entrepreneurs leverage Facebook to expand their networks and connect with potential buyers, customer enquiries are rarely dealt with over the platform. After promoting through Facebook, exchanges tend to move to WhatsApp, or directly to phone calls and in-person meetings.
One-to-one WhatsApp messages are used as a coordination tool for existing customers, or for direct communication with new customers. Dorcas, a baker and online freelance writer, told us about how she moves customers she discovers on Facebook over to WhatsApp:
“Most of our conversations start on Facebook messenger. Following a series of communication, once I confirm you are a potential client, I give you my personal WhatsApp number.”
But the journey doesn’t always flow from Facebook to WhatsApp. Some micro-entrepreneurs, such as Benard a shoe merchant, move their customers directly onto WhatsApp. He uses his market stall to promote his shoes and build customer relationships, and having solidified these relationships he then moves the conversations over to WhatsApp:
“By the way, most of the customers I sell to (in the market), after that I just deal with them through WhatsApp.” WhatsApp one-on-one messages are the new SMS for many of the micro-entrepreneurs we spoke to.
In addition to direct messages, WhatsApp groups are a fascinating, critically important and not well understood channel for sales. WhatsApp groups support daily life in Kenya. They’re used for church groups, high school reunion classes, neighborhood associations, and even to connect women that visit the same hair salon. Moving business transactions over to WhatsApp groups is a totally natural thing to do, and one that almost every micro-entrepreneurs we talked to was taking advantage of.
When WhatsApp groups are used as a promotional tool, the reach is confined to a smaller pool of contacts, resulting in its applicability for more intimate product promotion. Otieno, another shoe merchant, explained to us why he prefered to promote his products in WhatsApp groups rather than Facebook groups:
“The fact that you know the people rather than Facebook or Twitter where you don’t even who you are talking to.”
The fact that people can market products within WhatsApp groups, and then also use the same channel for low budget customer relationship management is interesting. While both could be done across Facebook, WhatsApp feels more personal, perhaps due to its connection to a person’s phone number, and therefore greater level of personal connection.
While WhatsApp groups are the primary form of communication on WhatsApp, a fair number of micro-entrepreneurs also use their WhatsApp status (similar to Instagram stories) to promote their products or services. It is notably the younger and more digitally savvy who have adopted the WhatsApp status as a promotional channel. Faith, a fresh juice seller, showed us how she promotes her drinks on her WhatsApp status (see image). Kipchoge, a seasoned merchant across various ecommerce and social media platforms, also leveraged his WhatsApp status to promote his products:
“On WhatsApp, I usually don’t post to groups on WhatsApp because WhatsApp groups can be disturbing because of too many notifications…So I just post the images on my status, and I’m done.”
Phone calls and in-person meetings
Phone calls and in-person meetings build further trust in a sale, from both the buyer and seller perspective. Kerubo, a jewellery designer and dancer, explained why micro-entrepreneurs move conversations from WhatsApp to phone calls:
“I don’t know why Kenyans believe that (by) talking to a person…(you) get the clear information…They might think that I am this person who wants the deposit…so after chatting online they make a call then clarify.”
This move to phone calls, or ultimately in-person meetings, not only shows commitment to a sale in terms of the time people are willing to invest, but also demonstrate how trust builds the closer buyers and sellers move towards physical contact. These offline channels are also critically for transaction facilitation with no payment mechanisms available over WhatsApp or Facebook. We discuss more about the shift from online to offline tools during the buying and selling cycle in our Tech and Touch section.
2. E-commerce platforms are leveraged by more digital savvy micro-entrepreneurs
Kenya boasts a range of e-commerce sites from Jumia (a B2C site similar to Amazon) to OLX (a C2C Ebay model), as well as newer entrants such as Sky Garden and Kilimall. OLX and Jumia, the two most popular e-commerce platforms, differ in terms of the level of control they exert over the relationship between buyer and seller, as well as the level of support the provide to their users. While OLX simply hosts a platform for sellers and buyers to connect, leaving communication and payment to happen independent of the platform, Jumia acts as an intermediary between the two restricting direct communication and therefore intermediating all forms of interactions. As described by Robert, an e-commerce merchant:
“OLX is also very good because it lets you have direct contact with the buyer, so once you get to a buyer, the buyer can also give you referrals…”
However, acting as a trusted intermediary Jumia arguably provides more growth opportunities for their micro-entrepreneurs through various upskilling opportunities and online ratings and reviews. Jumia also provides an end-to-end service through online transaction facilitation, where in contrast OLX users have to move off the platform to complete payment.
There is a general perception among micro-entrepreneurs that the success they have conducting their business over e-commerce platforms is due to the ability of these platforms to match them with more serious buyers. One of the micro-entrepreneurs we interviewed, Kioko who sells flash disks over Facebook and OLX, shared his opinion:
“On OLX you post for serious people. When I get a customer from OLX I just know he is serious.”
Similarly Kipchoge, who promotes and sells various products over WhatsApp, Facebook and OLX, explained why he prefers to use a dedicated e-commerce channel:
“I get more potential customers from OLX, Facebook not as much because it’s flooded”
Micro-entrepreneurs are using these sites as an online marketplace through which they can more efficiently market their products to a larger pool of active buyers. When we asked Robert, a Jumia Merchant, why Jumia was his prefered e-commerce platform, he told us:
“Their marketing is very wide, they have experience with their marketing, the platform is also trusted by a high percentage.”
Thanks to these platform attributes, e-commerce sites are generating business for microenterprises. Robert averages 40 orders a day through Jumia. For Wambui, an ornament maker, 70% of her business comes through OLX.
However, not all merchants are equally benefitting from these platforms. While the more business and tech savvy micro-entrepreneurs appear to thrive across these platforms, access constraints prevent some from benefiting from such opportunities. One interviewee complained about the level of detail required to sell items across Jumia, such as submitting the weight of each product.
Beyond traditional merchant activities, some e-commerce platforms provide additional avenues for income generation. For example Jumia hires representative to 1) promote their goods across other platforms, such as Facebook and Twitter (as part of their affiliate program) and 2) help sell their products to offline customers (as part of their JForce program). Some of the micro-entrepreneurs we spoke with have ventured into these different revenue channels – as heard from Robert:
“I generate a link from Jumia website, I paste it on Facebook so once you click that website and place an order from Jumia, I get a commission.”
Despite the income generating opportunities provided by e-commerce sites, use of social media and e-commerce aren’t mutually exclusive. Robert promotes his products through his Facebook page, and Kipchoge uses Jumia to set a pricing benchmark to help with sales arbitrage across Facebook. As heard from Kipchoge:
“For example, this smartwatch that I have in my arm, if you are to purchase it on Jumia it goes for around 15-1600 shillings. Plus shipping charges which is around 200 which comes to 1700. In town, I’ll get the same smartwatch at 1200-1100 and I’ll sell it at 1500-1600.”
This behavior suggests that there is no standardized price for products and for the savvy business person, they are able to exploit information asymmetries for profit. It’s also an example of how micro-entrepreneurs develop “digital repertoires” which skillfully combine more than one digital tool at a time to pursue livelihood specific goals. When businesses combine information and contacts across multiple channels and platforms, digital information moves and aggregates in unanticipated and sophisticated ways; and as a result, markets work more efficiently.
3. Digital ‘trade unions’ are emerging over WhatsApp
Aside from matching supply and demand, the networking effects of social media platforms have enabled microenterprises to come together in new ways. We saw evidence of microenterprises forming groups through WhatsApp to share trading ideas, negotiate better prices, manage staffing issues and advertise assets for rent and sale. What could be described as the fringes of a digital trade union, the coming together of microenterprises on social media platforms such as WhatsApp has facilitated important interactions among informal trade groups. In the absence of formal trade structures, it is interesting to see the development of these WhatsApp craft unions.
“WhatsApp is where the wholesalers and those who have shops have one group. So, there is where we discuss. Someone can post that “let us increase the price”….so from there you learn and change also.”Odeke, Bottled Water Distributor
On the purpose of the Taxify WhatsApp group: “Purposely it is to bring the drivers together in case they want to communicate…they talk about if you need to hire a car or if you’re selling you can even sell there…”Kipn’getich, Taxi Driver
“We also formed a group called ‘smart duka’ where you get to meet suppliers of various commodities. We meet on a weekly basis, Wednesday and be able to negotiate for better prices.”Daniel, Shopkeeper
These WhatsApp groups are formed by micro-entrepreneurs working in the same region, in trades that have been digitally augmented by platforms, but whose end service or product is tangible – be it a taxi ride, birthday cake, fresh juice or new bracelet.
4. Micro-entrepreneurs promote their writing skills across online work platforms
From our research we also spoke to micro-entrepreneurs who were leveraging platforms to promote their writing skills and win small, task-based online writing jobs such as product reviews and freelance writing. Through platforms such as Upwork, Freelancer, Uvocorp, iWriter and Studybay some micro-entrepreneurs were able to find work either to supplement their primary income, or as their main business.
While we heard of some gatekeeping issues that prevented micro-entrepreneurs from thriving across these platforms – ranging from challenges with opening accounts to issues winning jobs due to an oversupply of labour – tweaks and hacks appear to breakdown some of these barriers. One apparent common behaviour to circumnavigate some of these gatekeeping issues was to accept outsourced work often advertised on Facebook groups dedicated to online writing (see image below from one of these groups). These tricks to overcome gatekeeping issues have enabled a wider range of micro-entrepreneurs to benefit from the business available across these platforms. More about these online work practices in our Digital Side Hustle section.
Read next: Transactions, on and off platforms ⇢