Building a thriving E-commerce business in Uganda

Ecommerce is growing exponentially, a trend that is expected to continue through 2020 and beyond especially in light of the COVID-19 pandemic that is slowly seeing the world go contactless or at least in theory. Many businesses have closed physical offices and are gradually going online. 

The WTO's Work Programme on Electronic Commerce defines e-Commerce as ‘the production, distribution, marketing, sale or delivery of goods and services by electronic means.'

There are different forms of e-Commerce; business-to-business (B2B) and business-to-consumer (B2C), consumer-to-consumer (C2C), and the more recent and fast-rising, social commerce (S-Commerce) where buyers and sellers conduct e-Commerce transactions on social media platforms sometimes using a particular payment channel.

In 2020, according to the International Trade Centre (ITC), there are 630 B2C (Business to Consumer) marketplaces in Africa.

This e-commerce wave has spawned the phenomenon of ‘e-commerce marketplaces' otherwise known as ‘virtual marketplaces' (VMP) in the mold of the Jumia's and Amazons of this world. 

A VMP is as good as its reputation. Its reputation is what attracts or disinterests users on the platform. One bad experience of a customer can go viral and create reputational damage. 

This means that VMPs must ensure that they control the quality and behaviour of their users, but at the same time must remain vigilant in tracking merchants who may be engaging in unsavoury behaviour.

VMP's onboard customers through rigorous registration processes. Some of the best in this industry combine monitoring and evaluation systems that track key performance indicators. They collect massive amounts of algorithmic data on customers based on this.

The same age-old business principles and virtues that have held true for many successful enterprises apply to e-commerce. Are you trustworthy? Can you make good on your promises? Are your products delivered on time? Are you tax-compliant? How effective and efficient are your administrative and internal systems?

Proper business practices that apply to managing business efficiently are required; for e-commerce specifically, one must be up to the task when it comes to order fulfillment, packaging, shipment, communication with clients, parcel tracking, returns, complaints management, among others.

As one engages in this virtual business model, keep in mind that the internet never forgets. One has to provide the best service as is reasonably possible from the outset and give your customers a wonderful experience. Of course, first impressions matter and it goes without saying that consistency is key. A good reputation is such a big thing in the online world because online information tends to travel much more quickly and widely. 

A good customer support system is of the essence and comes in handy in preventing some of the issues concerning e-commerce.  This good customer support system helps in nipping in the bud customer cancellations of orders because of various reasons like bad reviews.

Another important factor regarding customer management is feedback time to customers. It is highly recommended that your customers' queries do not go unanswered after 24 hours.

One also needs to regularly update and maintain the content of their online shop. Constant reinvention of content is required especially taking into consideration customer feedback.

According to a 2017/2018 National IT Survey Report, 68.6% of consumers that had bought goods online reported several challenges like delayed delivery beyond promised time, goods looking different on arrival, goods not arriving at all, overcharging, or incurring an unexpected fee.

Visibility and branding become a very important aspect as the online business expands. Therefore online/digital marketing is a worthwhile investment for any business. Tools like Search Engine Optimization (SEO) must be deployed.

Policies must be well spelled out on the VMP. A good shipping policy providing for instances of delayed deliveries of goods due for example to the inefficiencies of third-party logistics providers or bad weather among others is very vital. It is important for e-commerce players not to give unrealistic expectations of delivery times. Clients have to be updated along each stage of the order. 

It is critical to also have Terms of Use which stipulate among others the liability of the VMP, Intellectual Property rights, methods of payments, etc. A privacy policy and a return policy should also be on the VMP.

'Payments' is a crucial component in e-commerce. What payment gateway or method is used on the VMP? Is it from a third-party provider or is the VMP self-contained with its own payments system in the mold of AmazonPay? How efficient is it? When it comes to payments, e-commerce is highly susceptible to money laundering and other examples of cybercrime. Uganda now has a law regulating the payments sector called the National Payment Systems Act, 2020 which is a major step in the right direction with digital payment offerings on the rise.




Uganda has a bunch of cyber laws that an e-commerce player should be abreast with; the Electronic Transactions Act, 2011, the Electronic Signatures Act, 2011, the Computer Misuse Act, 2011, the National Information Technology Authority Act, 2009, the Uganda Communications Act, 2013, the Data Protection Act, 2019, the National Payment Systems Act, 2020, the Sale of Goods and Supply of Services Act, 2017 and a bunch of operationalizing Regulations thereunder. 

Particular attention should be paid to the Electronic Transactions Act as far as its consumer protection provisions are concerned. An e-commerce business is required to provide its profile online-the name of the business, the nature of the business, contact information and location, allow consumers an opportunity to review transactions before placing their orders, allow a consumer to opt-out of unsolicited communication, among others.

E-commerce platforms collect and manipulate a lot of our data through their algorithmic analysis. Since February 2019, Uganda has had a Data Protection Act which provides certain obligations on Data Processors and Controllers as far as data protection and privacy is concerned. Most importantly the collection of personal data requires the consent of Data Subjects. Lack of or inadequate data protection policies can lead to potential exposure for industry players.




Some of the common infringement scenarios in e-commerce revolve around Intellectual Property where a vendor will sell through the site items which perhaps are owned by another party whose consent they have not obtained. The Electronic Transactions Act protects a service provider from liability in respect of third-party material which is in the form of electronic records to which he or she merely provides access if the infringement is founded on any rights subsisting in or in relation to the material on condition that during their course, the service provider is not aware of the facts that gave rise to the infringing activity. Many cases have been handed down by the European Court of Justice and elsewhere have fortified this position. 

COVID-19 seems to have given e-commerce in this part of the world a massive boost with a number of e-commerce solutions on the rise everywhere. Some partnerships took place during that Covid-19 period that saw the likes of Jumia partner with the United Nations Development Program (UNDP) that saw several market vendors now connected and selling their produce on the Jumia platform to mention but a few. 

Giants like Amazon have attempted to reign in their Intellectual Property issues through coming up with some initiatives including "Project Zero", where machine learning is deployed to proactively remove counterfeit products from Amazon's stores. 

The much-vaunted African Continental Free Trade Area (AFCTA) is mooting a Protocol on e-commerce, the World Trade Organization met a few weeks ago to set standards for e-commerce. Ugandan businesses especially the MSME's have an opportunity to take lead in this discussion and be the gold-standard.

The writer is a technology, media, and telecommunications lawyer