As you know we, as Prisync team, enjoy exploring new markets every other week. The latest trends, customer behavior and structural needs that can help out e-commerce entrepreneurs are our main interest when we produce these pieces. This week we are looking at Kenya, an African country, which has many surprises in its e-commerce market. Let’s take a look.
According to World Bank data, Kenya’s growth is expected to rise up to 5.9% in 2016 and 6.1% in 2017. The economic outlook seems positive thanks to its tea exports. The main partners in trade are Uganda, Tanzania and Netherlands. Another important factor about Kenya is that the infrastructure investments are increasing. Since e-commerce drop shipping can suffer most from weak infrastructures this is good news. Kenya is a founding member of the EAC (East African Community) which aims to increase trade and commerce between countries. It is also the biggest economy as well as the most industrialize country in East and Central Africa.
According to this report, Mobile penetration has reached over 89% at the end of 2015. Internet penetration levels are 87.2% which translates into 37.4 million online users. Only 78 percent of them have access to 3G services. 2G is more common. The easy access to Internet through mobile phones was one of the biggest factors of growth in Kenya’s e-commerce.
Supply chain systems are a crucial part of e-commerce businesses’ agenda. It is important to ensure the trustworthy image of online retailers and delivering orders paid for within the agreed time. Kenyans are said to spend more money online if the delivery destinations are reached which is mostly upcountry. The logistics services that are present in Kenya are G4S Securicor Kenya, Wells Fargo, DHL and Postal Corporation of Kenya’s EMS Service.
Kenya National Chamber of Commerce (KNCCI) has agreed on a deal with Chinese e-commerce service Amanbo. The main idea is to cut off the middlemen and reduce the logistics costs that arise from exports and imports. According to the agreement KNCCI will verify the quality and standards for Kenyans that are interested in selling their products on the Chinese market. This will offer the local traders larger options with more competitive prices. Cutting of the middlemen will also reduce risks of buying low quality goods in the trade process.
One of the reasons of growth in the e-commerce sector of Kenya is the presence of online markets. Many offline businesses got a chance to create virtual shops and increase their sales. This has also enabled other retailers out of Kenya to enter the market and create a more vibrant business environment. Another reason was the mobile e-commerce. As we mentioned earlier above, the increasing mobile penetration was combined with mobile payment services. Safaricom, Airtel and Orange were among the service providers. Shopping applications load a lot faster due to these developments and offer a good shopping experience for Kenyans. Affiliate marketing and social media related commerce were also found to be successful. Pick-up stations were also popular. Customers can select their orders online and pick them up from a local post office or get them from the offline retail store. Lastly, black Friday style buying days prove to be very effective.
The e-commerce market of Kenya is growing and it is growing in a solid way. Supply chain and logistics are getting better. Mobile penetration is high and it is very popular for payment systems as well. Pick up locations and black Fridays are increasing the growth all over the country. We hope this brief overview of Kenya’s e-commerce was helpful for e-commerce entrepreneurs all around.
Kenya’s e-commerce is growing more and more every day.