Young entrepreneur makes a mark in the lucrative E-commerce business
By Agnes Mbithi
Electronic commerce, regularly written as E-commerce, is the trading of products or services using computer networks, like the internet. It draws on technologies such as mobile commerce, internet marketing and online transaction processing. E-commerce has evolved over the years to become a major channel through which businesses can exchange goods and services, coordinate production and market to customers. By utilizing the power of the internet, E- commerce has changed the way in which individuals and organizations conduct their businesses. Today, most organizations around the world are using E-commerce to satisfy their communication and business needs. The world economy is actually witnessing a transition. Almost all companies are being transformed into an information-based operations system through online technologies. The rate at which the technical transition is taking place is so exponential that modern electronic commerce is now making significant moves in the economic environment, thereby impacting all areas of the industry. There is no doubt that the online shopping boom has negatively affected the traditional ways of buying goods, but the new age motto is either you adapt or sink.
Many businesses that were still using the traditional methods have also started online store fronts to maintain their business continuity and also increase their customers, besides retaining the existing ones. It is likely that with time, customers may prefer online shopping as they can do so conveniently from home, or even when they are travelling. Businesses that have not yet acquired an online presence need to seriously consider entering this space, so as to ensure their continuity and also stay relevant in the market. As a country, young people have seized this opportunity and have ended up building their own empires. Eddy Ng’ang’a, a twenty seven year old is one of them.
Having studied psychology at the University of Nairobi, he decided to practice e-commerce – a line of business outside his career path. But as the saying goes, passion is energy. His passion in the business world which started when he was still a young boy yielded fruits. Despite starting his business as a young man, he still decided to finish his studies and get the necessary credentials. Having taken the evening classes, he had a lot of free time and that is how his idea of starting his business started. “Considering that I was idle most of the time during the day and I had a smart phone that could connect to the internet, I decided to use it to take pictures of my relative’s products, publish them online and then get people from various locations to make orders so that I make an extra shilling,” he explains. It is during this time that he decided to put his idea into action and his journey as an entrepreneur started. His first products were baseball caps. To his advantage, the caps were in fashion at that time and being a university student, there was a ready market for him.
Disciplined, meticulous, ambitious and highly focused, Eddy has been in the E-commerce line of business for the last six years. He is an entrepreneur as well as the founder and director of UTL Kenya. UTL Kenya which stands for Urban Thrift Limited is an online company that sells a variety of services and products. Though it is based in Nairobi, it offers services all over the country. “When I first started the business I came up with the name Urban Thrift Limited but it seemed to be a very difficult one for my clients and so I decided to use UTL Kenya which is quite short and memorable among my clients,” says Eddy. UTL Kenya was first established in 2016 but during that period, the business was not formal since he was still in school. He took it as a part time hustle. “During that period, considering that I was still a campus student, I didn’t have a lot of information and the dynamics of how the business is supposed to run,” he says.
From 2019, he decided to make the business a formal entity and since then it has been an amazing journey. UTL Kenya today deals with about ten different affordable products. Some of the categories include: fashion, electronics, furniture, auto-mobiles, Air BnB ( for pets), entertainment, and real estate. The decision on where to establish the company was determined by the demography and concentration of the people in Nairobi. Going by his research, he realized that setting up his business in Nairobi would be a better option since the largest percentage of his target market was based there.
Slowly, the business grew and some of his priorities had to change. “I started having more clients and the business was growing a bit faster than I expected, so I ended up making a very hard decision – I had to defer my studies for about two years,” he says. Despite not getting approval from his parents, he still went ahead and took that decision and got to concentrate fully into his company. The option of deferring his studies gave him an opportunity to have the necessary skill set to ensure that his company succeeds. Eddy points out that his marketing strategy is mainly through social media platforms because it is affordable.
UTL Kenya is a unique e-commerce company that ensures clients are able to acquire products in wholesale prices. They also provide a variety of products in different colours. “UTL Kenya allows a client to acquire more than two products in a wholesale price compared to one product that goes at a retail price,” he says. The company has been able to stand out from the other e-commerce platforms due to the partnerships that it has which allows for a pay later business model. Additionally, the company also deals with pets and pet related services and products. “Through our partners, UTL Kenya is able to offer an Air BnB for pets which are dogs, rabbits and cats. Air BnB means bed and breakfast,” he notes. The company is able to provide bed and breakfast for people’s pets that are seeking to travel and they don’t have a place whereby they can leave their pets on safe hands. The company also engages in hiring and leasing of products such as PS5 machines at affordable prices – ranging at a price of Kshs. 200 with a minimum of five days of hiring.
Starting his business in Nairobi with a small amount of capital was not a walk in the park for Eddy. “The fact that the story of UTL Kenya begun in Nairobi County and having originated from Kiambu County meant that most of the potential clients were strangers to me,” he says. To start with, Eddy says that his biggest challenge was not only acquiring new customers but also retaining the old ones in order to ensure repeat business. This is one of the biggest challenges for beginners in business. Nevertheless, he has been able to identify his previous mistakes and how to handle such a situation. He wins customers by offering enticing deals and also giving them better treatments which makes them more comfortable with the company’s products. “Before dealing with a client, I first ensure that I understand his needs in order to offer him the right product,” he adds. Most importantly according to Eddy, entrepreneurs should ensure that they have the right tools as opposed to having enticing deals that are based on false promises and hot air.
“My second challenge had to do with capital, there was a bit of challenge in getting new inventory for the business considering that I was just a second year student and my daily allowances were insufficient ,” he observes. Before entrepreneurs worry about cash flow issues they first need capital to get off the ground. This is one of the most significant problems faced by entrepreneurs, particularly those starting on their own and who aren’t well-connected to investors with deep pockets. “Without enough financial resources to start a business, it becomes very easy to fail,” he points out. In a bid to bridge this gap, Eddy had to ensure that he got his customers to buy his product and also market his company to potential investors. In the process, he approached a few associates that were willing to work with him. At the beginning he started alone. He performed all the company functions. When the work became a lot, he decided to bring along a friend who supported him in marketing. Currently, he has a team of about five to ten people.
The other hurdle that Eddy has faced so far is when a client does not fulfill his part of the agreement. “Sometimes we prepare the orders before time and when we deliver we expect that the clients make follow ups. In a case where a client has placed an order and does not fulfill his part of picking the orders, the company losses in terms of delivery costs,” he laments. In order to handle such a situation, the company has come up with a requirement where by the client pays half the amount of the product ordered and later settles the balance in monthly instalments for a certain period of time. In a bid to fill the loop holes, the company has been able to have a legal department that ensures that the clients are not able to escape or vanish without making their payments. “The good thing about UTL Kenya is that we are very reasonable. However, in a case where a client is not able to make payments for their products, we give them a grace period of two months,” he says.
Eddy advises upcoming entrepreneurs who think they are able to work alone to take into consideration that they need people to assist them in terms of operations and also in getting new ideas “ Great things cannot be achieved when you are alone,” he says. Additionally, he advises young entrepreneurs to be passionate. He further states that young people should not start businesses with a sole purpose of making money but to fill certain gaps in the market.
The goal of every entrepreneur is to make profits and to grow their business to greater heights. One has to take major risks in order to realize big returns. After those six years in business, Eddy has learnt many vital lessons. As part of his growth plans therefore, he is planning to open five more branches country wide mainly in Nakuru, Nyeri, Kisumu, Mombasa, Meru and Eldoret. His goal is generate revenue of Kshs. 1 billion in the near future.
Eddy’s typical day
Wakes up at 4.30 am, does exercises before taking breakfast.
Starts working at home by posting his products by 7:00 am
By 10:00 he assigns duties to the team members. Occasionally, he does his work remotely and spends less time in the office.