While bankers turn a blind eye to this opportunity because the hurdles to creating easy and secure systems for retailers are too high to scale, M-PESA will make hay while the sun shines and rewrite the history of retail in the country.
If you notice your colleagues dressing above their pay grade blame it on Black Friday, the day after Thanksgiving, known for it’s surge in retail activity and commonly thought of as the beginning of the Christmas season. Originating in the US where excessive consumerism is the norm the idea has surfaced in Kenya with retailers intending to leverage on growing disposable incomes and access to credit.
So much so that online retailer Jumia has launched their own version of Black Friday which runs for a month, not a day. Perhaps they should call it Black Month, or Black Widow because it is just as harmful to your bank balances as the spider’s bite. Employers are forced to pay attention as their staff request inordinate salary advances so that they can take advantage of incredible price offers and, get this, make big savings! If you buy that you’ll buy anything.
A study conducted among internet users in Kenya showed that the items that they purchased the most outside food and pharmaceutical products were clothing, entertainment and electronics, in that order. We wanted to identify what people searched for online and bought offline in order to understand the impact of search on shopping patterns.
The entertainment sector was at top of the list when searching for products, followed by electronics, and fashion came in third position, showing that physical clothing stores still have significant influence on purchasing decisions.
However, as online shopping gains traction the numbers are bound to surge forward as consumers begin to make their decisions purely on what they see online, coupled with product and user reviews.
The first obstacle that we must get over is referred to as the trust threshold which indicates the level of comfort that the masses have with payment systems employed, as well as the faith they place on their retailers to deliver the merchandise as promised. There are too many con jobs out there and we get queasy if we have to part with our money before we have the product safely in our keeping.
The retailers must also get over their trust issues. The credible vendors struggle with shipping items until they see the money as they have encountered a great number of bank cheques of the rubber variety — those with springy elasticity and bounce. Naughty customers are in plenty, leading to a lipa-mbele-ya-kula (pay before you eat) way of life.
When mobile payment system M-Pesa was introduced a decade ago it only began to fulfill it’s income potential with the gradual rise of society’s trust in it. It was a similar story with Tanzania’s introduction of mobile money even though they had witnessed the Kenyan example a few years earlier.
The shopping channel on GTV had identical experiences and when they promised to deliver the products to homes prior to receiving payment, the shoppers would still prefer to commute all the way to Thika to touch the product before they completed the transaction.
While bankers turn a blind eye to this opportunity because the hurdles to creating easy and secure systems for retailers are too high to scale, M-PESA will make hay while the sun shines and rewrite the history of retail in the country.
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