Consumer Goods and Service 1

Consumer Goods and Services

A collection of companies connected by common business operations is called an

industry. Industries are divided into two primary groups based on their economic nature: those

that produce things and those that provide services. Each is essential to a country's economic

structure and cash movement but also significantly influences how goods and income are

distributed. Industries that produce goods are especially engaged in producing goods shipped to

customers. Businesses in the goods-producing sector include auto manufacturers and

confectionery factories. The majority of developed civilizations place equal importance on the

service sector. While they could occasionally supply customers with physical goods, their main

service usually provides direct, expert work for something the client cannot accomplish on their

own, such as a well-prepared meal or medication.

Consumer Goods and Service Industry

Uganda's economy has grown steadily ever since the 1990s. Between 1990 and 2018, the

real GDP increased at an average annual rate of 6.5%, while the real GDP per capita rose at a

slower annual rate of 3.1%. Uganda's economy saw significant change during this time of steady

expansion. Between 1990 and 2018, the value added by agriculture to the GDP decreased from

53% to 24%. According to Calabrese et al. (2019), the GDP contribution of the services sector

climbed from 30% to 48%, while the industry (which includes mining, manufacturing, and

building) increased from 10% to 20%. Uganda has not yet reached industrialization overall. The

pro-market reforms of the 1980s, 1990s, and 2000s have produced steady growth but have not

brought about the promised industrial development led by the private sector (Shinyekwa et al.,

2016). Agricultural and service sectors continue to be the backbone of the economy. Small

businesses that offer very little value dominate the industrial sector. For Uganda,
 Consumer Goods and Service 2

industrialization—particularly in the manufacturing sector—remains essential. According to

Hausmann et al. (2014), the nation has the second-highest dependence ratio in the world, but one

that is dropping. At more than 3%, Uganda has one of the world's greatest population growth

rates and fertility rates (number of children per woman) (Hausmann et al., 2014). According to

National Planning Authority (NPA) projections, the number of individuals who fall between the

employed and working-age populations will rise from 5 to 22 million if trends persist (NPA,

2014). Although the overall unemployment rate in Uganda is low (albeit high in specific

locations, most notably Kampala), the underemployment and precarious employment rates are

significant. Near-subsistence agriculture employs around half of the working-age population

(Obwona et al., 2014; Walter, 2019). According to the SET program, to accommodate new

workers entering the labor market between 2015 and 2030, Uganda would need to produce

650,000 jobs yearly, or 1,780 jobs every day (SET, 2018). Global experience indicates that

labor-intensive manufacturing may quickly generate the required jobs.

Current Technologies in the Consumer Products and Services Sector

In Uganda's consumer goods and services sector, major innovations include e-commerce, food

processing and packaging, beverage companies, and renewable energy and utilities.

Renewable Energy Sources and Utilities

Numerous African nations are seeing a sharp increase in energy costs, which has led to

the closure of numerous encouraging small and medium-sized businesses (SMEs). Some local

items are even more expensive than imported goods due to rising energy prices, which are

reflected in the cost of production of goods and services (Qudrat-Ullah et al., 2021). Food,

health, the environment, and water are just a few economic sectors heavily dependent on energy.
 Consumer Goods and Service 3

Any place's ability to flourish politically and socioeconomically depends on having access to

inexpensive, clean energy (Fashina et al., 2018). According to economic projections, Uganda

will require at least 2000 MW of energy to power homes and businesses by 2025. The country

has a variety of power-generating sources, with an installed capacity of around 1100 MW,

including small and big hydroelectric facilities (Onu & Mbohwa, 2018). Its equatorial location

ensures that solar resources are sufficient to supply Uganda's energy demands (EPIA, 2010).

Uganda can produce 4100 MW of hydropower, 1650 MW of biomass, 800 MW of peat, and 450

MW of geothermal energy (Fashina et al., 2018). The potential for solar energy is around 5.1

kW/m2.

On the other hand, hydropower generates around 80% of Uganda's electricity, while

traditional biomass accounts for over 90% of the country's primary energy output (Tumwesigye

et al., 2011). When biomass is removed from the equation, Uganda's remaining renewable

energy sources account for around 5% of the country's energy consumption, hindering the

economy's growth throughout the nation (MEMD, 2007). When dependable energy is available,

SMEs become more profitable and competitive (Groenewoudt et al., 2020). More jobs and

economic activity are produced by thriving SMEs (Razak et al., 2018). Thus, to give SMEs

access to dependable energy, policymakers in developing nations must work hard and create

laws that support this goal (Husaini & Leah, 2015). Hydropower is Uganda's main energy

source. But as the consequences of climate change worsen, alternative renewable energy sources

like solar power are starting to seem like more sensible options (Jurasz et al., 2018). Due to its

equatorial location, Uganda receives an average of five to seven peak sunny hours of solar

radiation each day. In 2019, more than thirty solar enterprises offered photovoltaic (PV)

technology.
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However, in Uganda, energy costs have increased by 193.8% in the past ten years (ERA,

2017). The major causes of this growth include the monopolization and centralization of the

electrical system, fluctuating currency values, rising demand, and higher utility operating and

maintenance expenses (ERA, 2016). This troubling scenario hobbles businesses, and they are

uncertain about their energy expenses. Growing processes and fluctuating electricity supplies

severely impact SME output, sales, profitability, and employment (Siyala et al., 2014).

Alternative energy supply methods and billing mechanisms are even more critical to counteract

such detrimental impacts on SMEs and economic development. Net metering technology is one

way to control how consumers' energy costs change over time. According to Mugaga and

Chamdimba (2019), net metering is a structured system in which commercial and individual

power producers and consumers generate electricity to meet their loads and have the option to

sell the excess power they create to the grid at a price below the retail price of electricity. Except

for a few private sector projects, Uganda lacked a net metering framework as of 2018 (Mugaga

& Chamdimba, 2019). There are few studies comparing the systematic differences between

many energy sources and billing methods simultaneously. SMEs would benefit more from self-

generation, net-metering billing methods, and hybrid energy systems (grid, solar, or diesel).

Research needs to evaluate a workable alternative energy source and billing structure that would

result in cheaper power costs for SMEs in Uganda.

Africa must combine traditional power-generating methods with renewable energy (RE)

resources such as biomass, geothermal, hydropower, solar, and wind to boost the region's power

capacity (Fashina et al., 2018). Despite a 43% rise in electrification rates, 600 million of Africa's

1.2 billion inhabitants lack access to electricity. both on- and off-grid solutions must be

employed to electrify the majority of rural regions (Husaini & Leah, 2015). Africa has enormous
 Consumer Goods and Service 5

potential for renewable energy, but it has not been fully used due to high investment prices and a

lack of awareness (Onu & Mbohwa, 2018). Solar energy is now the energy source with the

highest growth rate in the world, according to a report by the International Energy Agency. It is

the most dependable and cleanest kind of RE source that is currently accessible (Avellino et al.,

2018). Uganda's RE resources are still unexplored because of the anticipated financial and

technical risks. High prices and the lack of electricity from traditional hydro and thermal power

generation in Uganda are the two main factors making solar energy the most sought-after energy

source in the nation (Qudrat-Ullah et al., 2021). The energy sector has also been divided and

privatized into several entities, including ERA, Uganda Electricity Generation Company Limited

(UEGCL), Uganda Electricity Distribution Company Limited (UEDCL), Uganda Electricity

Transmission Company Limited (UETCL), and concessionaires ESKOM and UMEME).

Photovoltaic (PV) Solar Energy with Distributed Generation (DG)

According to Peng et al. (2018), distributed generation is any electric power-producing

plant with a maximum generation capacity of 50 MW at the customer's site and within the

distribution network. The energy system and the consumer benefit from the following seven

primary benefits of the DGs:

i. A decrease in voltage fluctuations,

ii. Varying capacity additions for utilities,

iii. Value addition through energy bill savings during peak hours when the time of use

(TOU) rates are applicable,

iv. Distributed energy generation has the advantage that power produced is not shipped

to distant ends for customer use. Emergency backup plans for customers during utility

outages increase the reliability and stability of power supply to customers.

 Consumer Goods and Service 6

v. An extra security benefits from not being a market player; and

vi. Dispersed generation, last but not least, stimulates investment in renewable energy

sources.

DG policies ought to be implemented so that a nation can diversify its economy by

adding more renewable energy. Solar photovoltaics (PV) is one of the most practical energy

sources for distributed generation among the technologies used in distributed generation (DG),

particularly in the African context (Ondraczek, 2014). The ease of use of photovoltaic systems

(PV) can be ascribed to the absence of infrastructure necessary for the gathering and

measurement of biomass for the production of power. The cost of PV components has decreased

due to ongoing technological advancements. Their price competitiveness is further enhanced

when premium PV is considered a cleaner form of energy production (Vikhorev et al., 2014). In

reality, in certain locations, the cost of solar PV power is competitive with that of electricity

generated from traditional energy sources; this phenomenon is known as socket parity (Hugo &

Juan, 2017). The technology is economical for DG because of the steady decline in solar PV

costs. On a horizontal surface, Uganda's mean daily sun radiation is 5.1 kWh/m2. This degree of

insolation makes it ideal for using solar technologies to deliver power to off-grid rural homes and

institutions, such as solar photovoltaic systems and solar water heating (MEMD, 2007). DGs can

supply the customer's whole load need; any excess is even supplied back into the grid. It reduces

transmission and distribution losses—the process by which some energy is wasted as heat during

transmission—because the generated electricity is not sent to distant locations. Before UMEME

took over the distribution concession in 2005, grid losses in Uganda were 40%. Power losses

might be greatly decreased if distributed solar PV generation is promoted. SMEs' profitability

 Consumer Goods and Service 7

and economic growth are enhanced by a dependable source of energy supply (Siyala et al.,

2014).

Tariffs and Billing Systems for Energy

The FiTs method was originally used to encourage renewable energy solutions.

Customers were drawn to these FiTs since they were often more expensive than retail pricing

(Ohrlunda et al., 2019). As of 2012, 65 nations and 27 states used the Renewable Energy Feed-

in-Tariff, or REFiT. The benefit of REFiT is the stability of consistent financial flows due to the

tariffs' 10- to 20-year duration. Receiving financing and loans from financial organizations helps

electricity producers (Michaelowa et al., 2003). Rather than helping customers struggling with

high power costs, REFiT assists nations by encouraging RE resources. In Germany, for example,

end-user bills have been extremely expensive, which has led to opposition.

Metering On Credit and Prepaid

Ensuring correct electricity metering and billing is a major concern for many African

nations. In Nigeria, for instance, the Nigerian Electricity Regulatory Commission (NERC)

suggested that all consumers have prepaid meters installed (Adekitan et al., 2018). Either

metered or prepaid meters were used for electricity billing. By purchasing or selling power

before consumption, prepaid metering gives customers control over the electricity Budget and

the company's earnings. High labor intensity, high credit and financing risk, and other cost-

related aspects are characteristics of prepaid and credit metering (Moki, 2012). The benefits

include consumers using energy more efficiently, utility firms' budgets getting better, and their

bad debts going down. Prepaid metering has several drawbacks, including expensive
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infrastructure requirements, disagreements over who owns the prepaid meters, and the need for

payment before usage.

Adoption of E-Commerce and SME Growth in Uganda

Usually seen as the cornerstone of robust economies, especially in emerging nations.

Over 40% of enterprises worldwide are SMEs, effectively the primary driver of job creation,

accounting for an average of 20–90% of employment (Kiraka, Kobia, & Katwalo, 2013).

According to estimates (Nangoli, Turinawe, Kituyi, Kusemererwa & Jaaza et al., 2013), SMEs

employ more than 80% of the country's workforce, makeup 90% of the private sector, contribute

more than 70% of the country's GDP (Asiimwe, 2017), and account for more than 80% of the

country's output of manufactured goods (Turyahikayo, 2015). SMEs in Uganda continue to have

a relatively poor survival rate despite their contribution to economic growth (Asiimwe, 2017;

Turyakira, 2012). For example, it's projected that almost two out of every three Ugandan startups

fail to make it past their first anniversary (UBOS, 2012). Accordingly, some of the primary

causes of the low survival rate are bad saving habits, a lack of entrepreneurial abilities, and an

incapacity to take advantage of new development prospects (Nangoli et al., 2013). It is

improbable that any firm will prosper in the present digital era without using information and

communications technology (ICT) more. Without embracing technology, businesses—

particularly SMEs—cannot expand more quickly (Kozak, 2011). All firms, no matter how big or

small, have to contend with several competitive obstacles. Managers are implementing e-

commerce in their companies to deal with this situation and stay competitive (Poorangi et al.,

2013). According to Awiagah, Kang, and Lim (2016), small and medium-sized enterprises

(SMEs) must adopt inventive e-commerce tactics to maintain their competitiveness, profitability,

and success in domestic and international marketplaces. The adoption of e-commerce has been
 Consumer Goods and Service 9

identified as one of the advances that might support the survival and expansion of SMEs. SMEs

may benefit from increased Internet use through lower costs, more efficient operations, access to

new clients, and faster company expansion (Standing, Standing, and Love, 2010). E-commerce

undoubtedly speeds up internal communication and enables effective resource management

(Ahmad et al., 2015).

In essence, e-commerce is doing business online. According to Basu and Muylle (2007),

it is defined as "conducting transactions via Internet technology," which includes the activities of

offering or selling goods or services, as well as receiving electronic orders for goods or services

via the Internet, such as those made by email or digital form. Online payment is not always

required. Purchasing, selling, and exchanging information over computer networks, such as the

Internet, is also known as e-commerce (Turban et al., 2008). Likewise, Turban et al. (2010)

define e-commerce as "the process of buying, selling, transferring, and swapping items and data

using computer networks, mainly via the web and intranets." This is consistent with the

definition of e-commerce provided by Huseynov and Yildirim (2016), which is conducting

business using computer networks. E-commerce is the practice of businesses using an ICT

network, especially the Internet, to do business. Although SMEs might gain a larger consumer

base through Internet-based e-commerce (Wanjau, Macharia, and Ayodo, 2012), major

corporations are mostly responsible for expanding e-commerce use among firms. SMEs have a

somewhat low e-commerce adoption rate compared to bigger enterprises (Govindaraju,

Wiratmadja, & Rivana, 2015). SMEs have traditionally been sluggish to implement such efforts,

especially in Uganda. They may be ignorant of how e-commerce might improve their company's

expansion and operations. While e-commerce adoption has been the subject of several studies,

most of them (Kurnia, Choudrie, Mahbubur, & Alzougool, 2015) were done mostly in
 Consumer Goods and Service 10

industrialized nations, with just a small number concentrating on SMEs in developing nations. It

should be highlighted that most previous research on the variables influencing e-commerce

adoption has been conducted in developed nations, and the amount of e-commerce adoption

among SMEs in developing nations may be explained by limited empirical data (Ahmad et al.,

2015). Similarly, there is no empirical study on the obstacles that Ugandan SMEs face in

implementing e-commerce. Therefore, this study aimed to determine how e-commerce adoption

among SMEs is influenced by various factors and how SMEs' development in Uganda is affected

by e-commerce adoption.

Unquestionably, the original purpose of e-commerce technology was to serve the

demands of big companies in industrialized nations. Nevertheless, SMEs in underdeveloped

nations can still benefit from e-commerce adoption (Kurnia et al., 2015). While e-commerce

adoption by companies has been the subject of several studies, it is important to understand the

variables affecting technology adoption from the unique perspective of small and medium-sized

enterprises (SMEs) (Sakai, 2012). E-commerce is well known to provide businesses with many

advantages, including lower costs, more productivity and sales, a wider consumer base, and

enhanced customer loyalty (Turban, 2010). All of these benefits are critical to the expansion of

small and medium-sized enterprises (SMEs).

Nonetheless, research (Dubelaar, Sohal, & Savic, 2005) has found a few barriers that

SMEs, mostly in poor nations, face when attempting e-commerce. These include insufficient IT

resources, internal opposition, security concerns, unprepared business partners, and a shortage of

human resources. Kotelnikov (2007) identifies several reasons why SMEs, especially those in

developing nations, have not adopted e-commerce, including a weak legal framework, a lack of

financial resources, a lack of ICT expertise, and a bad communication infrastructure. According
 Consumer Goods and Service 11

to Ahmad et al. (2015), various factors, such as perceived relative benefit, compatibility,

manager or owner knowledge and experience, managerial traits, and external change agents,

affect SMEs' adoption of e-commerce in developing nations. Perceived compatibility and outside

change agents are the most important factors. Therefore, external change agents—primarily the

government, outside consultants, and e-commerce solution providers—significantly impact

SMEs' adoption of e-commerce. Similarly, adoption will probably fail if the current

infrastructure isn't compatible with e-commerce technologies (Ahmad et al., 2015). This is

consistent with the research done in 2009 by Alam & Mohammad, who found that SMEs in low-

income nations use e-commerce more frequently when it is technically compatible. SMEs have

difficulty implementing e-commerce, according to Jones et al. (2011). This is mostly because e-

commerce technology always evolves, and company demands differ.

How The Public And Government Would Benefit From The Industry's Integration Of

Technology Capabilities.

i. Software, Platforms, And Applications

Uganda's consumer goods and services sector is greatly improved by integrating

platforms, apps, and software since it increases efficiency, improves customer interaction, and

streamlines operations. The Fourth Industrial Transformation (4IR) has brought about a

technological transformation that has transformed how governments provide services to their

populations, with artificial intelligence (AI) at the vanguard. A collection of technologies known

as artificial intelligence empowers computers "to perform tasks, such as speech recognition,

visual perception, decision-making, language translation, and problem-solving, that would

typically require human intelligence" (Meroueh & Chen 2023:32). AI was first developed as an
 Consumer Goods and Service 12

academic field in the 1950s, with research focused on teaching a computer to behave

intelligently like a person. Since then, it has seen revolutionary technological advances (Haenlein

& Kaplan 2019). AI applications have been transformed by machine learning advances into

useful tools that can be integrated into various businesses and are gradually becoming a

necessary part of our everyday lives (Fanti, Guarascio, & Moggi, 2022). African governments—

including Uganda's—are determined to keep up with technological advancements after falling

behind during the First, Second, and Third Industrial Revolutions. In the public sector,

transformative AI technologies can improve decision-making processes and allocate resources

optimally. the potential AI technologies bring, governments worldwide may now use them in

various areas to improve their residents' quality of life and strengthen public service delivery.

Academics and practitioners have historically focused on the luxury fashion sector

because of the high growth rate that defines this industry, marketing. As a result, the market for

luxury fashion items was valued at over $1.2 trillion globally in 2017. It is projected that 500

million people will purchase luxury fashion by 2030 (D'Arpizio, Levato, Kamel, & de

Montgolfier, 2017). Digital technology influences around 80% of the global luxury market,

according to McKinsey & Company (2018), and by 2025, online sales of premium goods are

predicted to account for 20% of all transactions. Millennials, born between 1980 and 2000, are a

significant segment of the customer base that purchases luxury fashion items online (Chu,

Kamal, & Kim, 2019). By 2025, millennials will make up around 45% of luxury consumers, up

from their current percentage of 30% (D'Arpizio et al., 2017). According to Kim and Ko (2012),

millennials have an innate expectation that firms would employ modern media to engage in

meaningful online interactions. Consumers acquire favorable opinions of businesses that

 Consumer Goods and Service 13

demonstrate a desire to communicate with them, give them pertinent information, and establish

enduring bonds with them (Verhagen, Swen, Feldberg, & Merikivi, 2015).

However, millennials are more likely to search. Their interactions on social media

platforms and the information they can get online about businesses have a greater effect on them

(Kim, Ko, Xu, & Han, 2012). In light of this, before purchasing, Millennials frequently peruse

social media sites, reviews, and influencers for luxury fashion brands (Deloitte, 2017). In light of

this, it is critical for social media marketing managers to understand how Millennials see and

assess the social media activities of luxury companies (Zollo et al., 2020). Uganda's government

and business community stand to gain greatly from using this capacity in the consumer products

and services sector. Increased traffic and client reach are the primary advantages for businesses.

ii. Blockchain

Utilizing blockchain technology can greatly improve Uganda's consumer goods and

services sector by offering several advantages, such as improved supply chain transparency and

traceability, safety in quality assurance, decreased fraud and counterfeit goods, and streamlined

payments and contracts. Blockchain technology makes real-time tracking of items from

manufacturer to customer possible. every transaction is documented on an unchangeable,

transparent ledger, tracking the origins and movements of product. This can assist in preventing

the sale of fake items and confirming the legitimacy of products. All parties involved in the

supply chain, ranging from farmers to merchants, are liable for their respective contributions.

This openness can result from increased consumer and corporate trust (Market Research). Safety

regulations may be fulfilled by tracking food goods from farm to table using blockchain. The

possibility of widespread contamination can be decreased in the case of a foodborne illness

epidemic by promptly identifying and isolating the source (Food Business Africa). On the
 Consumer Goods and Service 14

blockchain, products may receive certifications attesting to their quality and conformance with

international standards. This is especially critical for Uganda's export markets, where fulfilling

exacting quality requirements is essential (AFMASS Africa). Blockchain technology offers a

safe means of confirming the legitimacy of expensive products like electronics, prescription

drugs, and high-end goods. Customers may verify a product is authentic by scanning its QR

code, which provides access to its complete history (Food Business Africa). blockchain

technology is decentralized making it more difficult for fraudsters to manipulate transaction

records, increasing consumer and company security (AFMASS Africa).

Smart contracts, which automatically carry out and enforce the terms of an agreement

whenever specific criteria are satisfied, are made possible by blockchain technology. This can

save expenses, simplify transactions, and lessen the need for intermediaries (AFMASS Africa).

Businesses accept cryptocurrency payments, and they can be quicker and more affordable than

conventional payment methods. For cross-border transactions, this is especially helpful (Food

Business Africa). Companies may utilize blockchain technology to validate claims made about

their products, such as environmental practices, fair trade status, or organic certification.

According to market research, this can improve customer trust and brand reputation. Customers

may earn and spend points in a trustless environment with loyalty programs that are transparent

and safe, thanks to blockchain technology. Customer retention and engagement may increase as

a result (AFMASS Africa). Blockchain technology may reduce paperwork and human error by

automating several logistical procedures. This may result in lower operating expenses and more

effective inventory management (Market Research). Blockchain can assist in streamlining the

supply chain, reducing delays, and enhancing overall efficiency by giving all parties a single

source of truth (AFMASS Africa).

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