Kenya has for a long time been ranked among the African countries that are dominating the e-commerce sales. E-commerce has helped jump-start SMEs and also helped large companies to tap into a market full of energized and ready consumers.
The opportunities presented by e-commerce in Africa are numerous. This was evident during the E-Power forum held in Nairobi today. The forum which was organised by the Association of Kenya Manufacturers (KAM) brought together SMEs and other industry leaders including Jumia Kenya to discuss the potential of e-commerce for small businesses.
The continent is a massive market with a growing population of 1.28 billion people, a network of over 15 million SMEs and merchants, and a rising internet connection of 453 million users. Kenya alone has a population of 48.5 million and an impressive 79 per cent internet penetration. With this, the number of Kenyans buying goods online keeps growing presenting a need for more SMEs and manufacturers to move online.
This has however not been the case. SMEs that are already using online platforms to sell have been able to explore new markets and enabled significant growth. But for some, it hasn’t been smooth sailing.
According to Jumia Kenya Managing Director Sam Chappatte, SMEs still, don’t know and understand how big the e-commerce market is today. He said e-commerce present a much a safer and way for SMEs to grow.
‘’SMEs don’t understand that within a couple of minutes you can sign up on platforms like Jumia and start selling countrywide. The investment required is smaller, and yet you are able to reach so many consumers’’
The MD said industry players need to also do a better job in educating these SMEs and other manufacturers the benefits of selling online.
‘’I think we as industry leaders need to do a better job at explaining these benefits and reaching out more to.’’
Selling online in Africa not easy. In fact, according to Disrupt Africa’s “Afri-Shopping: Exploring the African E-commerce Startup Ecosystem Report 2017” report, seventy per cent of e-commerce startups are unprofitable. Jumia, which is the largest e-commerce platform in Africa has 4m active consumers across the continent. Jumia says about 100m visited the platform in 2018 but according to Jumia, the e-commerce market is still untapped.
‘’1% of purchases are done online in Africa while it’s at 20% in China. The market is huge and untapped here’’ Sam said.
He says Jumia is reaching to as many vendors as possible for them to trade online.
‘’We have 15000 SMEs currently selling on Jumia in Kenya today with 100 vendors signing up on every day.‘’
Jumia wants to ensure they also bring vendors from outside Nairobi to sell online. The firm plans to set up hubs in different areas across the country starting next year where these vendors can sell their products.
‘’The biggest blocker for SMEs is access to the market. We want solve that by working with the Kenya Association of Manufacturers and government to open up these e-commerce hubs so that quality SMEs and manufacturers can have access to the market and sell their products. ‘’
Kenya currently has 7.41 Million SMEs according to KAM. 60% of theSE SMEs are in the service sector and approximately 400,000 of them fail every year. Jumia intends to work with KAM reach out to these SMEs.
The E-forum was also attended by a representative from the Ministry of Industry, Trade and Cooperatives.