Kenya among Africa’s Big 3 in E-Commerce

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As the world becomes more attuned to online buying, Kenya is determined not to be left behind. Commenting on this trend in September 2013, we reported that Kenya was “not only taking part in the eCommerce industry, but it is flourishing and growing rapidly every day.”

Now, a year and a half later, Paysure has rated Kenya as second in the list of the top seven countries predicted for technology and eCommerce growth in the region, after Senegal. According to communications Authority of Kenya quarterly sector statistics report Q3 2014/2015. The number of internet users stands at 29 million. Internet subscriptions stand at 18.8 million while mobile subscriptions dominate at 18.6 million bringing to 99 percent the number of Kenyans browsing the web via smartphones and to 72.7 percent the number of people with access to internet in Kenya. To understand the potential of e-commerce more, in June 2014, Communications authority of Kenya estimates the value of e-commerce to be KES 4.3 Billion.

Being a leader in technology in East Africa, it’s no surprise that Kenya was able to take advantage of e-commerce. Mix in the popularity of mobile payments and M-Pesa, and the shift makes even more sense.

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Kenya is Africa’s leader in all aspects of mobile. Mobile connections account for almost all of internet subscriptions in the country, while the number of people using mobile payment services has been growing each year to reach a significant double-digit number in 2014. Still, the country’s eCommerce market is smaller than that of some other African countries, although ranking first in mobile shopper penetration together with Nigeria.

Two years ago, Jumia was eyeing Kenya’s growing eCommerce sector. Today, they are one of Kenya’s leading online shopping destinations, allowing shopping for the widest assortment of high quality products and services at affordable prices.

OLX topped the list of sites that Kenyans have searched for most on Google in 2014, this resulted in the company looking forward to seeing the e-commerce market growing not only in Kenya but in Africa as a whole. OLX intends to play a key role in future innovations as it seeks to cement its position in the Kenyan market as the leading countrywide but highly localized virtual market place.

In a study recently conducted in Nigeria, Kenya and South Africa by Ipsos, a global market research company, on behalf of PayPal, it has been discovered that 89% of Nigerian internet users shop online or expect to do so in the future, compared to 70% of South Africans and 60% of Kenyans. Out of the approximately 50 million internet users in Nigeria, 65% of users already shop online and another 24% of users expect to do so in the future.

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According to Qube, a Digital Media agency, the future of eCommerce in Kenya is developing rapidly. “In our opinion it is something that Kenyan companies should utilize”, they stated, adding: “In the past, companies that wanted to sell their products online faced a major hurdle in the form of payment platforms.” This, however, has changed dramatically. There are now local payment platforms that have integrated payment methods that work for and in Kenya.

There is serious progress in eCommerce within the country the latest being Kenyan NIC Bank Group plans to launch NIC Konnect, a banking platform that works through social media.

NIC Konnect will let customers access various banking services through their accounts on social networks including WhatsApp, Facebook and Twitter. The platform, which is aimed at young Kenyans, allows customers to view their balance, mini statements, and make funds transfers using a PIN.

According to Dr. Bitange Ndemo, the Kenyan government has established a five year programme for the introduction of e-commerce in the public sector. The programme’s main project is the establishment of an electronic marketplace for public procurement in a bid to promote e-commerce in Kenya. In addition, the Kenyan government has put in a framework that will guide/govern e-commerce as contained in the Kenya Communications (Amendment) Bill 2008 also known as the ICT Bill. The law seeks to promote e-trade within Kenya and between Kenya and other trading partners and also provides a conclusive legal environment for all players to do business and transact.

Finally, the rapid expansion of the Internet is fueling the growth of e-business. E-commerce is on the verge of exploding as more companies rush to reduce costs, improve productivity, and provide greater customer access. Although most small businesses feel the Internet has not had an impact on their business, many are optimistic and have plans to expand into e-commerce. The best thing that can happen to e-commerce in Kenya is for more businesses to realize the potential of increased sales and setting themselves up to accept online payments through their websites and for consumers to adopt online shopping as a convenient, safe and cost-effective means of shopping. That will hasten the maturing of this industry, and everyone will benefit.

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By Kelley Boss       

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