6 October 2018

Ethiopia: Nahoo Launches First Shopping Channel

The company has invested 20 million Br in the channel, dubbed Mazesha Zone

Nahoo Television has begun broadcasting the nation's first shopping channel, mainly devoted to commercials, presentations and demonstrations of products.

Nahoo invested 20 million Br in the channel, Mazesha Zone. The broadcaster has at the same time set up warehouses, delivery systems, e-payment mechanisms and credit schemes to facilitate the operations of the satellite channel.

The station will initially advertise about 100 consumer goods and products, with plans to incorporate up to 5,000 items in the coming six-month period.

The channel will allow viewers to place orders for the items advertised on the channel by phone to a hotline. The television station is located in Rosetta Building, in Bole District, and the four dispatch and distribution centres are located across the city.

Information on callers' orders concerning product and location of deliveries will be gathered, and purchases above 1,000 Br will be delivered free of charge.

Callers can also become registered clients - the company aims to obtain 10,000 customers within three months - who will be required to deposit money in an account opened for this purpose at the Bank of Abyssinia. Thereafter, clients will be given store-value cards that can only be used for purchases at the shopping channel.

The card will keep records of the amount of money deposited by the account holder and transaction history. Registered clients may pay for the products by swiping a card at Nahoo's Point of Sale (PoS) machines without a cash transaction at delivery.

The company has integrated a credit card system into its operation. When clients run out of cash on their store-value cards, they will be extended interest-free credit for up to 25pc of the original deposit amount.

"The nation's markets are hectic and inconvenient. They do not invite potential buyers to spend their money," said Tewdoros Shiferaw, a major shareholder of Nahoo, explaining the intention behind the home shopping channel. "More than that, customers don't know the quality of the product they are buying."

With around 60 employees already in place for this new operation, the broadcaster is in the process of hiring recruits. It is expected to create job opportunities for up to 300 people when it becomes fully operational.

Companies whose products are advertised on the channel are not required to pay for product placement. The station plans to collect revenue from mark-ups on the products sold.

Top Water Bottling will be one of the companies that will get their products presented on the shopping channel.

"We are very glad of the new television service," says Shimelis Ajemma, marketing manager of Top Water, "and we hope to use it both for sales and building our brand name."

The newly launched Mazesha Zone will only serve as a platform, with the whole operation to be carried out by its parent company, Rosetta.

Nahoo was launched in 2016 by Nahoo LLC, a Kenyan Media company in partnership with a local production company, Tuba Productions.

Nahoo LLC was forced to sell its ownership rights back in February after the Ethiopian Broadcasting Authority enforced a new law that reserved the media business for nationals only. Tewodros is the founder and major shareholder of Rosetta General Business Plc, a company engaged in real estate development, import and export, and recently in the media and communications business.

For Mazesha Zone, Nahoo did not buy a new broadcasting frequency but merely introduced it on a previously created frequency, according to Mekonnen Michael, CEO of Nahoo. Nahoo has another satellite channel broadcasted on a different frequency.

While the Ethiopian Broadcasting Authority does not prohibit ownership of two frequencies, it requires the transmission of similar content. For this reason, the broadcaster would need two licenses, which is not allowed to be given to a single person.

Nahoo was contacted by the Authority last week and ordered to close the new unlicensed channel.

"We will not close the station but apply for a new license by transferring the ownership rights," said Mekonnen.

Tewedros has been in the same waters before when he acquired Nahoo. He was a co-founder and board member of the African Renaissance Television Service. He relinquished his share at African Renaissance when he established Nahoo, since the law did not allow him to have a majority share in two channels.

Nahoo is one of 16 licensed satellite TV Stations in Ethiopia. There are 4.3 million households with satellite dishes, according to media survey reports. As of March 2017, Nahoo had a TV viewership share of 8.3pc in the country, while Kana has the largest at 32pc.

Mulugeta G. Medhin (PhD), a lecturer on marketing for more than two decades, approves of Nahoo's move into e-marketing. The platform will create huge opportunities for both sellers and buyers, he said. The stations, by being a facilitator, will bring in more money as spending gets easier and easier, according to him.

"Ethiopia will witness growing e-commerce across multiple platforms," he said.

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