E-commerce in Kenya

E-commerce

Internet access

According to the Communications Commission of Kenya, the internet penetration rate was 26% in 2017. Many Kenyans still don't have access to the internet, particularly in remote areas. However, access has grown significantly in the last few years, mainly due to the increasing affordability of connection. Recently, data bundles have become the fastest growing revenue source in the telecom sector. According to Safaricom, the average internet usage per month in 2017 was 270 MB, a 52% increase from 2016. The government has prioritized the expansion of Information Communication Technology (ICT) services in the entire country, reaching all Kenyans, with internet connectivity being a key pillar. Internet speeds in Kenya have also been improving. In 2017, Kenya’s internet connection speed averaged 12.2 Mbps, surpassing the global average of 7.2Mbps. Additionally, the country had the fastest mobile internet speed in the Middle East and sub-Saharan Africa. On the other hand, rural areas have not been able to benefit from Kenya’s high-capacity bandwidth and a digital divide based on gender persists in the country, with more male mobile and internet users than women.

E-commerce market

E-commerce in Kenya has grown significantly over the last few years, especially among small and medium businesses. However, the market is still developing. Although the formal retail penetration in Kenya is estimated at 30%, the fraction of Kenyans buying products online was only 0.5% (but that number is expected to grow). There are no official figures on e-commerce revenue in Kenya. According to the Communications Authority of Kenya and the Kenya National Bureau of Statistics, about 27% of companies sold their products online in 2017. The use of apps in e-Commerce have gathered rapid penetration in the market and plays a significant role in the promotion of online shopping. Consumers are now able to use apps to purchase goods and services such as food, clothing, vehicles, real estate, and transportation services. More players are entering the e-Commerce market due to the high turnovers, with estimates pointing to turnovers 25 times higher than traditional retail stores, as well as the fact that setting up an online shop does not require expensive infrastructure or a high initial investment. On the other hand, many Kenyans still do not believe in buying goods online, and online payment options are still unexplored (credit cards have a 10% penetration rate in Kenya), with most transactions being carried out in cash. Some of the most popular e-commerce websites in the country include Jumia, Kilimall, Masoko, Avechi, and Skygarden.