When e-commerce first began to boom in the United States, Japan, and other parts of the world, Kenya’s lack of widely available internet service left them behind. Even in 2010, many Kenyans did not have access to high speed internet, which limited the nation’s ability to take advantage of e-commerce. Fast forward to today and Kenya at the opening of 2016 is not only taking part in the e-commerce industry, but it is flourishing and growing rapidly every day.
Mobile payments guide the way
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.
A new era of online shopping has opened up to the people of Kenya which can now make a variety of purchases straight from mobile devices. They are offered convenience, speedier checkout processes, and a wider range of purchasing options than ever before. Booming in 2015 and growing, cross border mobile payments allow not only Kenyans to purchase in Kenya based online stores using their mobile, but also shoppers from other countries in the region.
What are customers buying?
For the most part, consumers are using e-commerce to purchase digital or non-shippable goods such as computer software, downloadable music and movies, airline tickets, and reservations. The goal is to increase the sales of physical goods. This will help further expand e-commerce in Kenya and open the doors to new companies to take advantage of the industry's growth.
Consumers want to purchase these tangible goods online, but feel the need of additional advancement in terms of secure payments delivery systems first. Buying and selling of physical goods will be advantageous to both consumers and sellers. Online retail reduces overhead such as a physical location, labor costs, and other expenses. And as a result, those savings get passed on to consumers in the form of lower priced goods.
Starting their operation in Kenya in 2013 Jumia was one of the companies looking to change the way that e-commerce is perceived in Kenya. After achieving success in Nigeria, they have set their eyes set on Kenya’s booming e-commerce industry. The founder of Jumia said, “after cracking success in Nigeria it was only natural for the e-commerce platform to set shop in Kenya”. Today, Jumia is a house hold name in Kenya and already have redesigned their website (October 2015) to provide a beter customer experience.
Fostering Nigeria’s booming technology industry is the iHub located in Nairobi. The iHub is an open community of investors, venture capitalists, tech geniuses, startup companies, entrepreneurs, and forward thinkers who all share a common goal of pushing the technology industry forward.
People looking to get into the e-commerce field or tech industry in general can go to the iHub for consulting, research and development, investments and potential partnerships. Several large corporations such as Google, Intel, and Samsung, have partnered up with iHub to help ensure its success.
The future of e-commerce in Kenya
Jumia along with many new entrepreneurs coming through iHub, realize that Kenya is taking off right now. Their success in the mobile industry catapulted the nation’s tech growth exponentially and they are looking to keep the momentum going by revolutionizing e-commerce as well.
The current focus for Kenya is feeding the demand of the consumers. The country is no longer restrained by slow or non-existent internet connections. There are over 10 million people that now have internet access in Kenya.
Consumers have made it clear that they want to shop online. It is now up to retailers to supply more products and also to provide a safer online shopping experience. There is an opportunity for new online retailers to attract specialized markets
and become household names in online shopping.
The future of e-commerce in Kenya looks extremely bright. Within the next few years, Kenya may become the overall leader of technology in sub-Saharan Africa, even bypassing Nigeria.
Eran Feinstein is the founder of Direct Pay Online. Direct Pay Online provides global e-commerce and online payments solutions for the travel and related industries He is a leading authority in the fields of e-commerce, travel and payments, having acquired extensive experience from various parts of the world.