Bad business: the makings of an ecommerce venture in Africa

If you had to pick any industry that Africa seems to have clung onto since its tech boom, it has to be ecommerce. For the most part, it’s relatively easy to set up an ecommerce shop. There may be some logistical challenges, but it seems to be an easier industry to play in.

Ecommerce globally is a big deal these days, but the fall of EcoMom shed some light on online shopping’s dark side. A telling report by the company’s financial controller, Philip Prentiss (one of only three people with knowledge of the company’s financials), exposed how the company was trapped into a loss-making spiral. In essence, its discount model meant the more products it sold, the more money it lost.

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