Payment portal promises major e-commerce shift

When Quentin Faulkner launched an online store for parents looking for good quality clothing for their children two years ago, his peers told him he would close shop in weeks.

But the business - a baby clothing store that has no physical location and is solely marketed using social networking website Facebook - now handles up to 90 transactions a month.

That growth has inspired him to launch a second e-commerce website - Bagalicious.co.ke, which sells handbags. We handle up to 155 orders a month on this website. January is shaping up to be our second best month in terms of orders and revenue,” said Mr Faulkner.

More recently, web commerce has become a key driver of the many online commercial portals that Kenya’s restless technology entrepreneurs (also known as techpreneurs) have been trying to establish with the growth of internet use in the country.

In this club of online commerce start-ups is Totallytoto.com launched at the beginning of the year to solely sell goods online. The firm joins a growing list of websites that are selling mostly foreign made goods to Kenyan consumers at competitive prices. Mystrawberrystore.com, pesapal.com, enrakenya.com, kalahari.co.ke and nsoko.co.ke, styleconnection.co.ke and intokenya.com are the vanguards of this budding internet economy.
Growth of the internet sector is expected to create new opportunities for the development of e-commerce and m-commerce linking Kenya more closely to the global economy.

This new push for e-commerce got an impetus mid last year with the landing at the Kenyan coast of two undersea fibre optic cables that linked the country to high-speed internet connectivity, laying the groundwork for a digital economy.

E-commerce is expected to give rise to a digitally-enabled economy that runs on platforms such as e-government, e-health, e-education, social media and e-science. Because of its association with lower overhead costs, e-commerce has enabled retailers to charge lower prices besides offering consumers a more convenient shopping window.

Globally, the e-commerce industry is now worth $500 billion, but Africa’s many technological challenges, including the absence of local electronic payment portals, have ensured that the continent accounts for only a tiny fraction of it.

With the arrival of broadband internet, Kenyan companies are now refocusing their strategies to tap on online commerce that is expected to grow at an annual average of 10 per cent in the next decade.

Helped by the changing landscape in the travel industry, national flag carrier Kenya Airways is for example offering online ticketing and tens of small and medium-sized firms such as e-manamba.com are offering commuters the opportunity to purchase tickets online. Media companies such as the Nation Media Group have also gone online to sell digital editions of their publications.

Nakumatt, the country’s largest retail chain is planning to launch an online hyper-mart that offers for sale on-line all products available in its stores.

It will work as a complementary sales tool that will serve customers in remote areas. And to ensure its success, we have enlisted the support of a leading logistics solutions provider to handle the delivery and logistics support elements,” said Atul Shah, the Nakumatt managing director.

Currently, MamaMikes.com - the oldest locally developed e-commerce portal - draws its customer base from Kenyans living in the diaspora but now hopes the availability of a local payment portal launched by I & M Bank last week will open the online shop to the domestic consumers.

Intense competition

The website has been offering its customers a platform to buy gifts for relatives and friends in Kenya from abroad. The menu of items on sale includes mobile phone airtime, Nakumatt or Uchumi vouchers, or cakes and flowers during special occasions.