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Contents
- Background..................................................................................................................................................
- Objective.....................................................................................................................................................
- General Objective....................................................................................................................................
- Specific Objective....................................................................................................................................
- Scope........................................................................................................................................................... - The major e-commerce models the platform support.........................................................................
- Deliverable..................................................................................................................................................
- Workflow of the Marketplace.....................................................................................................................
- Potential stakeholders.................................................................................................................................
- Value Proposition........................................................................................................................................
- SMEs........................................................................................................................................................
- End-user..................................................................................................................................................
- Open source - micro architecture............................................................................................................
- Business sustainability plan.........................................................................................................................
- I. Policy and regulations issues...........................................................................................................
- II. Paid advertisement pages................................................................................................................
Background
The Ministry of Innovation and Technology (MInT), with its missions to develop, deploy and use ICTs, to improve the livelihood of every Ethiopian, and optimize its contribution to the development of the country, currently runs a wide range of ICT development initiatives particularly in the areas of e- Government and e-Commerce throughout the country. In the Digital Ethiopia 2025 Strategy e-government and e-commerce are among the identified priorities requiring digital intervention. To support such development, different proclamations have been ratified such as electronic transaction proclamation, personal data protection, e-signature and e-receipt, having backed by this legal ground the development of electronic platforms will realize the anticipated socio- economic benefits during the strategy formulation. Currently it is estimated there are around more than 25K SMEs operating in different business categories throughout the country. SMEs in Ethiopia comprise of those having paid up capital of 20,000- 500,000 Birr and more than 500,000 Birr, respectively; or having 11-15 employees and more than 50, respectively. In terms of Digital Inclusion and Job creation, supporting of SME’s to increase their online presence and sell their products and services through the internet would create a huge impact. The Ministry of Innovation and Technology has formed a dedicated department called the delivery unit to work on flagship projects. Among the flagship projects e-commerce especially the development of an e- commerce marketplace portal for SMEs is the priority in 2023/2024. The driving force for the gov’t to involve in such initiative is to insure the inclusivity of SME’s on the digital space since the SME’s capital to inter online market requires initial investment (platform ownership/rent) and skilled human capital to administer the e-commerce platform. In this regard the platform is to be used for free including continuous technical support and an intensive capacity building. The second major driving force for the development of such a platform is to insure the inclusivity of SME’s on public procurement activities and in this perspective the e-commerce portal will be integrated with eGP portal so that procurement requirements with the SME’s capacity will automatically be notified and in all the procurement process, proposal submission, status follow-up …payments etc., through the e-commerce portal, they would be provided with tailored support. In this way it will be possible to ensure their equal participation. On the other hand policy level interventions might be required to enable SME’s participation in the existing public procurement procedure, identifying the areas and bringing the topic into table for the responsible gov’t bodies is the other intervention area. Similar to physical location online location tobe considered as business location. The proposed e-commerce platform would serve as a foundation / base platform, on top of it in a simple configuration SME's could open their online store …similar to the existing e-service platform. The
Specific Objective
● To develop web and mobile based online marketplace ● To integrate the marketplace with eGP, delivery companies and payment gateways ● To develop e-commerce portal integrated Inventory management systems(Inventory management system as part of the e-commerce portal & app ) ● To Provide Intensive capacity building and awareness programs on e-commerce and digital marketing
Scope
● ePayment enabled and eGP portal integrated marketplace that will serve SMEs operating in Federal and Regional level. ● Mobile App based Inventory management system integrated with the e-commerce marketplace. ● Market coverage of SMEs would be local and international. ● Development & commissioning of the marketplace ● Continues technical support and promotion of the marketplace. The major e-commerce models the platform support
B2B model
The B2B model of the e-commerce marketplace allows businesses to buy and sell products from each other. B2B buyers can use the marketplace to find new suppliers and negotiate better prices. B2B sellers can use the marketplace to reach a wider audience and increase their sales. This model is used for the SMEs in which the final product of one SME can be an input to another SME and there can be some SMEs that are in distributing and retailer business. the platform will support whole sell requirement. B2C model The B2C model of the e-commerce marketplace allows consumers to buy products from businesses. B2C buyers can use the marketplace to find a wide variety of products at competitive prices(factory price). B2C sellers can use the marketplace to reach a large number of potential customers and increase their sales. The platform will help SMEs reach the larger public market/ wider consumer. The marketplace will allow the sale of products from SMEs to the citizens directly.
B2G model
- The B2G model of the e-commerce marketplace allows businesses to sell products to government agencies. B2G buyers can use the marketplace to find suppliers for their needs and to streamline their procurement process. B2G sellers can use the marketplace to reach government agencies and to increase their sales.
- Integrate the registration process with eGP for one time entry - avoid two times registration of SME’s on the two platforms.
- policy level intervention is required in terms of eGP participation …to identify affirmative action policy directions/advantages.
Deliverable
● Marketplace portal with all required marketplace features integrated with eGP portal. ● Mobile app: Simple/ Lightweight inventory management system using open source tools having an android and iOS version ● Capacity building, promotion and awareness raising
Workflow of the Marketplace
Architecture
Potential stakeholders
The Ethiopian SME marketplace portal is not an entity that can operate with a single institution instead it needs the collaboration and coordination of the following institutions for its success and sustainibility
# Institution Role Remark
Ministry of innovation and technology Arranging office, development devices, recruiting permanent back-office staff etc. Ethiopian enterprise development owner Public Property Procurement Agency Availing of the EGP platform for integration. Ministry of Trade and Regional Integration License issuance for e- commerce platform operators. Ministry of Finance and Economic Development PPP model related joint works National Bank of Ethiopia electronic payment related requirements. Ministry of labor and skills (MoLS) to reach SME’s and startups supported and followed with them Entrepreneurship development institute (EDI For the business model development and taking a pool of addresses of SME’s and startups Ethio Post Delivery Private companies working in delivery and e- commerce Development partners Project Financing
Business sustainability plan
Platform ownership and continuous revenue generation are the key points to consider. Value proposition to attract customers – factory market price. ➔ Develop a new platform or adopt existing private e-commerce portals in a consortium model? ◆ hellomarket, shega.com, etc.. ➔ donner driven vs business driven Design the platform considering continuous revenue generation The platform will provide free service until SME’s adopt the system and get a tangible benefit from the platform (increase in revenue and market reach). The platform development team within the coming two years will form their own company and in a PPP model the platform will generate an income through service charges from SME’s and third party platform users also Paid advertisement through the platform as more than 50K MSME’s are to be registered on the platform there would be a large volume of site visitors.
I. Policy and regulations issues
In Parallel with the development of the e-commerce marketplace portal there are some policy and regulations issues that should be handled. The following are some of them
- Logistics and refund policy
- National E-commerce policy
- E-commerce directive
- E-commerce roadmap
- E-commerce guideline
- eGP to incorporate SMEs affermative action
II. Paid advertisement pages
(Premium option/Premium users have a right to advertise their products or services if they upgrade to premium version)
