Warren Buffet had never bought shares of technology companies until earlier this year. Being a great friend of Bill Gates for many years, one would have expected this tsar of the stock market to go all the way on Microsoft shares.
Asked why, Buffet has always insisted that he did not understand technology and would invest in something he did not know. I have always found that excuse lame. I think that the real reason why the moneyed Warren hesitated to was because of the clash of dotcoms.
In the early 90s when the internet was making serious inroads into business affairs, there was a notion that all traditional shops would disappear on the face of planet earth. Instead we would have virtual shops on the internet where we would shop and groceries would be delivered at our doorsteps.
Thanks to the concept, we have virtual shops like Amazon and Dell Order System. However there was nothing revolutionary about it; traditional shops did not die. That resulted into clash of many of the initial online shop stocks.
Three decades down the line, the virtual shop concept is back and it is for real this time around. In Kenya young techie-savvy entrepreneurial women have set up shops on Instagram. All one has to do is visit the shop online, make an order and before you realize it, the sales lady will be at your doorsteps to deliver the designer fashion dress.
Online trading works much better when the articles involved are digital. There are many items that have become bits and bytes. Books today are not paper atoms but megabytes. Companies like ESCOM charge electricity in kilowatts hour; and it just a number. As a customer, you have variety of choices; you can use AirTel Money, TNM Mpamba plastic money or indeed NB’s Mo626 digital money to pay for your electricity.
Music today is less tangible; nothing more than files on your smartphone. Surprisingly, most artists still prefer to sell own music in DVD/CD media. While that goes a long to keep piracy in check, an artist can only cover a certain small area of a market within a day.
Let us say hypothetically that an artist can sell 20 albums of music per day at K600 each. But the same artist can unbundled the album into single digital songs and offer them through AirTel Money or TNM Mpamba platforms and manage to sell two thousand songs within a day at K50 each. The first scenario would yield K12, 000 total daily sales whilst the second one would bring in K100, 000.
Costs associated with personal selling are much higher than online retailing. All I am trying to say is that the artist makes money online while busy snoring at home.
But then, internet in this part of the world is simply unaffordable, you might rightly be complaining. Digital solutions like TNM Mpamba and AirTel money do not require an internet connection; all you need to transact is the cheapest GSM handset.
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