The Future of Dotcom Imitators in Africa.
Thursday, April 14th, 2005Tapping back to history from the gold rush in 1848 California, to the Dotcom craze during the 90s. The influx of prospectors, adventurers or even dreamers streaming from every nuke and cranny,was really something that had a mark in history but then again here we are in the year 2005, people still Never learn.
Today we see the ever increasing rise of different websites ranging from social networks, to on-line shopping malls in Third world countries especially from the African region. The main motivation behind all this is the websites they see when they browse the net, and they quickly assume that this websites are really making huge amount of profits. They go and build a similar website based on the concept.The pathetic issue here is that this websites are located in the Developed part of world and the market is for the developed market !!. And really most of this imitators do not really know what a simple word like E-commerce means. Or even to go into the extreme of understanding the marketing concepts, and then mastering it, and developing ever changing marketing techniques to suit it. Well so to say its just easy, get a website on-line, register a domain, and start selling, or start running forums and maybe probably the regular income would just stream in.
How many even know that a canonical “dot-com” company’s business model relies on network effects to justify losing money to build market share, or even mind share, through giving their product away in the hope that they could eventually charge for it. (It’s worth noting that Amazon.com and other successful survivors of the era (*.com crash) proved this strategy sound in the long term, for a small few.) Many raised cash through public offerings on the stock exchanges, with stock often soaring to dizzying heights and making the initial controllers of the company wildly rich on paper.
Well from what I know Amazon the no1 when it comes to on-line shopping in terms of price and recognition is still owing banks huge amounts of money. Now the question is do they even make profit? From what I can tell No. So first of all, from what I understand about on-line businesses is that you have to know the market, then study it, then you can then develop ever changing ideas from that based on market trends, and besides you have to also get a source for investment to get a professional set-up to ensure that you have a grip on the market.
Now how many African on-line portals, are really up to that standard? I can really count them with my finger tips, maybe in Nigeria (shopforless.com) and a few others . Yet you still see young lads building up portals, hosting it, and wasting a lot of money hoping that they would earn a regular income through that (Well we the hosters get to earn from that :p). The future I see is a future of regret and withdrawal. But then again who knows?. I just hope that if its the later they don’t burn badly.