Unlocking Ecommerce in Kenya through modernization of traditional Trade Models
The rise of ecommerce in Kenya just like many other African countries has been steady with a joint report by Kenya national bureau of statistics and communications authority of Kenya indicating that 27% of firms were selling their wares online. Further according to United Nations Conference on Trade and Development (UNCTAD) Ecommerce in Kenya accounted for 6% of all purchase compared to western Europe’s 75%.
The growth of Ecommerce is set to continue underpinned on efficient payment platforms, increasing internet connectivity currently at 60% and with formal retail penetration of 30% of which 0.5% is online there is still a lot of market to be covered.
Nevertheless Ecommerce in Kenya may not reach its full potential as compared to other mature and emerging markets such as US, Europe and China if it doesn’t address its challenges of: logistics, security and mistrust, poor infrastructure among others.
The modern challenges of Ecommerce are not unique to Kenya but addressing them would need Ecommerce to dig deep and develop a customized model that can work in Kenya and not blindly copy paste models working elswhere . There are many examples of good business models that work in one country but fail in others due to blind copy pasting.
Mpesa has been hugely successful in Kenya but failed in South Africa, A breakfast multinational exited Africa due to low sales of its breakfast products which failed to consider the heterogeneous nature of Africa, Amazaon and Ebay less than optimal performance in China vis a vis Tencent and Alibaba with its unique Taobao and Tmall approach.
The success of Ecommerce in USA is a natural evolution from general store, Montgomery ward catalog , walmart then Amzon and Ebay. During the entire evolution trade mirrored American society that was open to technology, individualistic among other socio economic and political factors.
Ecommerce in an emerging market such as China had several false starts before entry of Alibaba and Tencent by largely Amazon (Inventory model) and Ebay (Market place model) due to the lack of consideration the uniqueness of China.
Alibaba was successful due to the fact that the company built its business; Taobao, Tmall and Alipay based on the actual needs of Chinese entrepreneurs and merchants and cognizant of their cultural context.
The same story is playing out in India which is unique due to: different languages, religion, culture, federal state and a deep tradition of Kirana shops a symbol of Indian retail.
The success of Ecommerce in Kenya is hinged on a business model that takes full trade cultural appreciation of Kenya’s 43 tribes.