Mar 25, 2021 the potential for a remarkable and long lasting ecommerce growth is within africas grasps. Reductions in transaction costs accompanying b2b e commerce implementations. Ecommerce in kenya according to mckinsey 20, the internet sector contributed 2. Adoption of ecommerce payment systems by commercial banks in kenya by jesse ndubi nakhumwa a research project submitted to the school of business, university of nairobi, in partial fulfillment of the requirements for the award of the degree of master of business administration, university of. The ripple effects of the growing ecommerce sector in kenya have also spread to the banking industry. In kenya, the growth of digital trade and digitally enabled transactions. Electronic money primarily involves the use of internet. In kenya, the impact of ecommerce on social and economic structures has also. The ecommerce sector is a new frontier in business that calls for close partnership between the ecommerce players and backend logistics to ensure a positive customer experience from that first click to eventual delivery. Comparing ecommerce and ebusiness we come to the subsequent conclusion. However, there are barriers to the rate of ecommerce adoption on the continent such as logistics and connectivity.
The need for a proper regulation of ecommerce in kenya. According to white papers released by jumia in may 2018, the company sold 250,000 phones at an average price of 12,300 in 2017 which means that the. With appealing brand colours, this website gives off a very clean, simple, and cheerful feeling. Logistics plays a pivotal role in the creation of visibility in the ecommerce. However, the sector is still nascent in developing countries like kenya where it is encumbered by the lack of an ecommerce culture and trust in such transactions. Pdf an assessment of the state of ecommerce in kenya. Maybe youve dreamed of becoming a famous novelist, only to drop the project when writers block set in. Already established ecommerce players in the country include africa internet groups jumia, kilimall international and olx, a unit of johannesburglisted naspers ltd. The research methodology used a questionnaire survey internet survey to collect data from 7 ecommerce businesses out of which 74 or 54. Examples of emoney are payment processors, digital currencies, bank deposits, direct deposits and electronic funds transfer eft dillon, 2001. Kenya, however, leads the world in terms of access. Information technology has become a key element in the success of ecommerce and has brought many new developments into the idea of an internet government.
Lets begin our list of online shops with ecommerce websites. Technology and ecommerce are the next frontiers in kenyan. Ecommerce adoption among small and micro enterprises in. It is therefore in this context that this white paper was developed with a view to developing an appropriate framework that will promote the adoption of ecommerce via the post. Factors affecting the adoption of ecommerce in smes in kenya. The purpose of the study will be to provide solutions facing ecommerce in terms of the trust, security, and privacy. White paper on e commerce adoption in kenya april 2015pdfsize.
The kenya garment and textile industry is composed of firms of varying sizes and technologies. In africa, 40 percent annual growth in ecommerce activity is predicted over the next decade. Imposition of tax on the ecommerce industry in kenya background taxation of the digital economy has been an area of debate in the international arena. Pdf the rapid growth of electronic commerce ecommerce across the globe has led to a growing demand for better understanding of this. Although the formal retail penetration in kenya is estimated at 30%, the fraction of kenyans buying products online was only 0. Ecommerce in kenyaaccording to mckinsey 20, the internet sector contributed 2. Apr 16, 2020 have you considered starting an ecommerce business in kenya. Challenges facing the use of mobile applications for e. Business opportunities and impact on the religious publishing sector in nairobi, kenya. If you are anything like a lot of people, you have a lot of big ideas that rarely come to fruition. In kenya, ecommerce is estimated to be worth more than kshs 70 120 billion in the short term and kshs 400 billion in the longterm, thus presenting lucrative business opportunities. This has been the foundation for many businesses to rise. In kenya, it was found out that ecommerce application was limited to use of phones according to matambalya and wolf 2001 while, the use of computers stood at 71. In fact the growth of the electronic commerce has revolutionized the world business market needs and behaviours, including all aspect of postal services.
This report is a working paper, and hence it represents research in progress. And the term ecommerce obviously is more widespread. Pdf 2016 ecommerce subsector assessment report for kenya. Working paper 201608 august, 2016 2016 ecommerce subsector assessment report for kenya by peter misiani mwencha, ph. For example, finserve, which is a subsidiary of equity bank is now providing its payment platform to rival banks as it seeks a larger share of the ecommerce market. The e commerce website started off in 2014 with the aim of becoming the leading e commerce platform in africa. The development of ecommerce in kenya introduction the kenyan government through the communications authority of kenya ca is committed to facilitate the development of the information and communications sector including broadcasting, multimedia, telecommunications and postal services and electronic commerce. However, in this book we will only use the term ecommerce, because every business transaction finally is involved in selling or buying of products or services. Ecommerce in kenya market research report euromonitor. Many trading partners are already practicing ecommerce, by mutual agreement, also in kenya. Top 100 online shopping websites in kenya gadgets kenya. The use of ecommerce in kenya has grown significantly over the last few years, especially among small and medium enterprises smes. The research offers appropriate analysis of significant import to academics, policy makers and practitioners in the ecommerce industry in kenya.
Kenya ecommerce international trade administration. Ecommerce is gaining ground globally and has become an irreversible trend. The impact and implementation of e commerce in government. Sep 06, 2019 in kenya, ecommerce is estimated to be worth more than kshs 70 120 billion in the short term and kshs 400 billion in the longterm, thus presenting lucrative business opportunities. Factors affecting the adoption of ecommerce in smes in kenya 387 2006 where he has argued that developing, acquiring or applying the appropriate technology like ecommerce at the right time are the key facets of business success in many different competing marketplaces like those of smes. Ecommerce though not specifically defined in our consumer protection and welfare laws,2 is in general what others will call ebusiness, internet or online shopping.
Legal and regulatory challenges facing the growth of e. Ecommerce adoption among micro, small and medium sector in nairobi county, kenya phares b. Kenya recently adopted a digital economy blueprint meant to further develop the ict sector and ecommerce activity. Field experience in developing countries and ldcs confirms that. Ecommerce in kenya see 7 absolutely worrying challenges. The kenya communications amendment act of 2008 is kenya s adoption of the united nations model law on electronic commerce of 1996. Global b2c e commerce sales, in usd billion, b2c e commerce share of total retail sales, in %, and cagr, in %, by region, incl. The purpose of the study was to investigate the factors that influence the growth of ecommerce in nairobi, kenya. The purpose of this note is to identify the key issues surrounding electronic commerce e commerce in kenya.
A critical look at the obtaining scenario with respect to the development of ecommerce through the post in kenya is highlighted under section 3 below. Ecommerce in the garment industry in kenya usage, obstacles and policies by mary njeri kinyanjui and dorothy mccormick institute for development studies university of nairobi p. This is followed by a discussion on the studies that have been conducted on ecommerce in kenya. Apr 12, 2020 ecommerce in kenya has benefited from africas economic growth in recent times. Electronic commerce law with a special emphasis on the kenya. Jul 24, 2014 payment in ecommerce in kenya, tanzania and uganda is mostly in mobile money, such as mpesa, rather than credit cards which have only 10% penetration in kenya, for instance. With the internet connectivity in kenya hitting 60% while the penetration of formal retail is estimated at 30%, the number of kenyans buying goods online is expected to grow.
The growth momentum for ecommerce in kenya is unstoppable. A significant barrier to e commerce in many emerging markets is the lack of access to online payment systems. Sep 25, 2018 as a result of the growth, african economies, keen on promoting the e commerce industry have struck deals to facilitate bilateral trade, importing and local manufacturing within the continent. Now, it is the responsibility of everyone involved in this market to do everything in their power, so that african countries can truly enjoy and benefit from ecommerce. Roam predicts that there will be an increased uptake of ecommerce on the continent considering that the companys online listings grew by 121 per cent in the first quarter of 2018. Ecommerce in the garment industry in kenya usage, obstacles. The purpose of this guide is to profile the ecommerce landscape in kenya, nigeria and south africa, with a particular focus on the business to consumer b2c medium for products.
The use of ecommerce in kenya has grown significantly over the last few years, especially among small and medium enterprises. Pursuant to cap 411a of the laws of kenya, the government is committed to. Pdf 2016 ecommerce subsector assessment report for. Furthermore, ecommerce will be a catalyst to the achievement of the big four agenda, in which manufacturing is a key pillar. Kenya is currently migrating most of its services to the egovernment platform. However, this figure should be treated with some caution as accurate statistics of contribution to gdp are hard to come by since in kenya, ict and ecommerce in particular is not yet considered as a sector in the yearly economic survey reports.
The frontier of ecommerce is now accessible due to the recent rise of technology. Baseline survey to be done to ascertain the exact level of ecommerce adoption was recommended. Future ecommerce trends and challenges in east africa. The ecommerce market encompasses the sale of physical goods via a digital channel to a private end user b2c.
The objective of this study was to establish the challenges and benefits of online trading within the kenyan ecommerce sector. Ecommerce stands for electronic commerce which deals with the facilitation of transactions and selling of. The paper took cognizance of the lack of specific law regulation of ecommerce. However, this figure should be treated with some caution as accurate statistics of contribution to gdp are hard to come by since in kenya, ict and ecommerce in particular is not yet considered as a sector in the yearly economic survey. Describes how widely ecommerce is used, the primary sectors that sell through ecommerce, and how much productservice in each sector is. Consumer distrust is a major concern, mainly regarded as the protection of private information and the fear of the risk of being exposed to online fraudulent activities. Selling on the kenyan ecommerce market is a great option to grow your online business. It also looked at the various modes of payments and how this affected the growth of the various ecommerce businesses. The paper therefore proposes a regulatory framework for ecommerce. Ecommerce market ecommerce in kenya has grown significantly over the last few years, especially among small and medium businesses. This has been the main obstacle to ecommerce in kenya. Adoption of ecommerce payment systems by commercial.
Ecommerce and performance of online businesses in kenya. Ecommerce is a method of trading that replaces paperbased documentation by a mutually binding electronic protocol between buyers and sellers. The study is intended to add to the existing knowledge base on ecommerce in kenya and contribute to the growth of this nascent industry by providing. From smartphones to blankets, these websites have it all under one roof. Stages of ecommerce adoption there are several steps that should be taken to further adopt the internet and ecommerce in.
Euromonitor international is the leading provider of strategic market research reports. Accessing the ecommerce markets in kenya, nigeria and south africa. Kenyans do their shopping from online stores here in reffered to as ecommerce websites, from classifieds freepremium and from social media marketplaces. The study sought to provide answers on the effect of internet coverage on ecommerce businesses in nairobi, kenya. Pdf ecommerce has changed the way of doing business across the world. Field experience in developing countries and ldcs confirms that to realize this potential, additional support. A study by nyaga and ogollah 2015 sought to explore the challenges facing mobile network operators in penetrating the mobile money transfer market in kenya, which was dominated by a single service provider. For instance, the tax challenges of the digitalisation of the economy was identified as one of the main. In its simplest form ecommerce can be defined as the exchange of business communications and transactions over internet technologies. The problem is compounded by the lack of comprehensive legal and tax provisions in kenyan. Check out facts, figures and trends for the kenyan market, including online sales tips and data about top ecommerce platforms, product categories and payment methods in kenya. Describes how widely e commerce is used, the primary sectors that sell through e commerce, and how much productservice in each sector is.
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