Can Someone Explain the Economics of the Lusaka Online Hoe Market?
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So, as a purely research-based study, there seems to be an unregulated pricing mechanism in the Lusaka online, for lack of a better term, “hoe market”, or as it is more locally known, hookups.
I have observed some genuinely concerning price ranges for what appears to be roughly the same product, and as far as I am aware, there is absolutely no regulatory body overseeing this market.
Providers of such services, which I will simply refer to as “hookups” for the purposes of this study, appear to charge anywhere between K150 and K1,500.
That is a 10× price difference for what appears, from an outside observer's perspective, to be the same general service.
This raises some important economic questions.
What exactly determines the price?
Is it supply and demand? Location? Appearance? Reputation? Negotiation skills? The platform being used? Is there some sort of hidden pricing algorithm that the general public has not been informed about?
Because the supply side of this market is particularly fascinating.
There are groups where multiple providers are constantly advertising themselves, sometimes with posts along the lines of “available, inbox quickly”, suggesting what would theoretically be a highly competitive and oversupplied market.
Yet in another part of the ecosystem, you have connectors acting as intermediaries. Instead of simply contacting the provider, you apparently pay the connector to obtain a line to the provider.
So now we have brokers.
And then there is the most fascinating part of the market.
Sometimes the provider finally responds to your inquiry and somehow manages to make you feel like you are the one asking for a favour.
This is despite the fact that you are supposedly the consumer.
At this point, I am beginning to question whether I understand basic economics.
We have supply, demand, intermediaries, wildly varying prices, inconsistent availability and apparently no standardized pricing mechanism.
Yet somehow the market continues to function.
Upon further research, the apparent average price for a “short time” seems to be somewhere around K250 to K350.
This is interesting because that price appears to be relatively consistent across a number of providers regardless of appearance.
Which brings me to another observation.
Appearance seems to be a factor, but apparently not nearly as much as location.
Providers from areas such as Chalala and Woodlands seem to commonly start around K500, and some of these negotiators have the ability to detect financial weakness from several kilometres away.
You can almost hear the economic consultant in their head saying, “The market will bear this price.”
Meanwhile, providers from Kamwala South, Chawama, Libala South and Chilenje seem to maintain prices somewhere around K350 to K500, with transport sometimes being negotiated separately.
Interestingly, I have found the general customer service towards potential clients in these areas to be relatively okay.
The customer service aspect of this market deserves its own study, though.
Because sometimes the consumer is a first-timer, socially awkward, doesn't know how this particular market operates and is already nervous about the whole transaction.
You would therefore expect some form of customer service.
Instead, sometimes simply asking basic questions seems to be treated as an inconvenience.
Imagine going to a restaurant and asking what comes with the meal only for the waiter to make you feel like you have personally offended their ancestors.
This brings me to the question of consumer protection.
Who exactly protects the consumer in this market?
There is no obvious regulatory body, no standardized pricing, no published price list and apparently no Consumer Complaints Department.
What happens when you pay K500 and the service does not match what was advertised?
Who do you complain to?
ZABS?
ZICTA?
The Competition and Consumer Protection Commission?
The Ministry of Commerce?
At what point does this become an economic issue?
Even with the supposed pricing volatility, there does seem to be some kind of informal agreed-upon market rate.
Perhaps there is a genuine pricing structure that exists independently of any formal regulation.
Or perhaps it is simply:
“Shop 1 charges K350, so I will charge K350 too.”
Which would mean we are looking at a decentralized pricing model based entirely on market observation.
Fascinating.
So, I am therefore asking the economists, business people and fellow researchers of Lusaka Reddit:
Who actually sets the price?
What determines whether the market value is K250, K350, K500 or K1,500?
And more importantly, how does someone justify the upper end of that range when the consumer may subsequently experience the economic phenomenon known as post-purchase regret?
You make the transaction, everything is over, and suddenly you are sitting there thinking:
“Why the hell did I just spend K1,500?”
This is not buyer's remorse.
This is market correction.
And before anyone asks, I have never personally participated in this market.
This is purely an academic study.
For research purposes.
Obviously.