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Benchmarking to Support e-Commerce Company Expansion in Emerging Markets

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Copia is an e-commerce company focused on bringing low-priced, high-quality goods to middle- and low-income customers in Kenya—a country recently identified by Rand Merchant Bank as a top spot to invest in Africa. Copia approached MIT Sloan’s Global Entrepreneurship Lab (G-Lab) for help increasing revenue and net profits by offering new services through a multi-vendor online marketplace, as Kenya has favorable conditions for e-commerce to thrive. The company currently serves hundreds of thousands of people, many with little access to the internet, by enabling customers to place orders through agents or via cell phone.

“The base of the pyramid is often neglected as a market segment due to perceived low profitability,” says Chun Man Chow, a PhD candidate in MIT’s Department of Chemical Engineering who worked on the project. “By serving those in need in rural settings, Copia is able to run a profitable and expanding business. That is very inspiring.

”To address Copia’s challenge, G-Lab brought together a diverse team of students, including Chow, Keitumetse Molamu, MSMS ’21; Kunal Sanghani, LGO ’22; and Cathy Wu, a Harvard Law School student. Between them, they had experience in engineering, supply chains, business consulting, and the law. The team investigated Copia’s existing business model and researched top performers in the target space. The students then examined the experience of four successful multi-vendor companies—taking a deeper dive into two major emerging market players, two-time G-Lab host Mercado Libre of Argentina and Jumia of Nigeria—to provide benchmarking. This work enabled them to identify several key features for Copia related to technology, logistics, returns, and quality control.

The G-Lab team recommended Copia begin its expansion with a minimal viable product (MVP), an electronics marketplace with significant quality oversight. The company could then build its marketplace through a process of lean evolution, ultimately offering a diverse range of products and services through vendors, with less upfront involvement from Copia.

“The hosts really appreciated our recommendations and are moving ahead with the strategic plan we developed,” Chow says. “We are excited that our work is critical in contributing to their growth and expansion, and will have real impact on people on the ground.

”Chow says the project was also a great experience for him personally. “I learned from our host the importance of strong human relationships in business, which manifest in their trusted network of end customers, suppliers, and agents,” he says. “I've also strengthened my skills in performing benchmarking analysis and financial forecasting, and learned a lot about supply chain management, especially in the emerging economies context and in non-urban areas.”

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