How online shopping is disrupting the status quo in Kenya
Today, more and more online stores are in place giving consumers a variety of choices to make from the comfort of their homes as it reduces on workload like lining up in stores
The new wave of online business has sparked a stakes market disruption as clients and consumers embrace the new frenzy with enthusiasm due to convenience it brings forth thus putting the future of retail in real limbo.
According to data from Statista Market Insights, revenue in the ecommerce market is projected to reach US$898.71 million (Ksh 116 billion) in 2025.
Revenue is expected to show an annual growth rate (CAGR 2025-2029) of 4.14 per cent, resulting in a projected market volume of US$1.06 billion (Ksh 137 billion) by 2029.
Today, more and more online stores are in place giving consumers a variety of choices to make from the comfort of their homes as it reduces on workload like lining up in stores.
As long as there is internet connectivity and one wants a product; then it is simple and fast thus completely transforming the entire landscape and model of retail as we know it.
With mall space becoming expensive, now creativity has made certain businesses take up the online approach to cut down on costs and ensure maximum margins on the products sold.
According to Stephen Mutoro, Secretary General, Consumer Federation of Kenya, the physical nature of business interaction makes for trust, but the efficiency of online is the game-changer.
“We must admit how things have changed overtime giving customers variety and less time constraints in terms of getting services. People hate long queues which is frustrating. The reality is post coronavirus pandemic, very few people especially in the urban places have the patience for retail. Also, online now is cheap and has variables which are more useful for everyone.”
“There are a lot of advantages for sure for people who use the online platforms and this has now put a strain on the traditional model for shoppers. Globally, the shift is here and we just must adapt as fast as possible. Of course, for certain products like farm implements or automobiles you still need a physical store but otherwise everything else is easy,” he says.
“With technology of course, things have been simplified like for example if I want to purchase something I can go to my online store, use Google maps for directions and then I pay via the mobile phone cash apps. This is cheap and efficient. Going forward, I am sure the physical shops will have to be more flexible on how they run so that they remain sustainable. People also look at the safety element, issues like parking space in town so the idea with online is convergence of all factors into one big pot and so the potential for that service is endless. I want to believe that in the future only Fast moving consumables will be in supermarkets otherwise everything else like beauty products, electronics and clothes can find space online as they are already.”
Infrotrack Research & Consulting Founder/CEO Angela Ambitho who was recently a keynote speaker at the Lagos Business School Retail Summit told The Informer Media Group that evolution was the way to go for traditional shops. This even as she emphasized extinction was not necessarily the solution;
“With 77 per cent of Africans expected to own smartphones by 2025, the question arises: Will traditional supermarkets and malls survive the onslaught of digital retail? The answer is not black and white. Rather than outright replacement, the future of retail lies in hybrid models where physical stores evolve alongside digital platforms.”
“Despite the rapid growth of online shopping, brick-and-mortar retail will not vanish. Africa’s retail market is still 70 per cent informal, with local shops and open-air markets remaining dominant.
While e-commerce provides convenience, physical stores account for over 85 per cent of total retail sales across most African countries,” she says.
“However, survival will depend on adaptation. The rise of “Retailtainment”; where malls incorporate VR, AI-driven experiences, and live events, is already transforming physical shopping spaces into engagement hubs. A global study found that 70 per cent of consumers still consider in-store experiences crucial for brand loyalty, and Africa is no exception. To stay competitive, traditional retailers must: Integrate omni-channel strategies, where in-store shopping seamlessly connects with online platforms; Invest in supply chain efficiency to keep up with fast online deliveries &Redesign shopping spaces to offer immersive experiences beyond just transactions.”
On his part, Economist Edward Kusewa states; “Legacy stores have been disrupted and this was bound to happen. Look at what bookstores and food outlets have been affected. Like banks, the digital platforms have transformed ways of doing business and this of course has come with downsides like people losing jobs and lease spaces going unoccupied.”
He adds; “The concept of e-marketing has greatly taken route in urban Africa mostly but this again is commensurate to disposable incomes and this means mostly the millenials or middle class are the biggest utilizers. In the case of this continent, uptake particularly for fast food chains onto the online markets has been huge because people rarely want to physically go out to shop what can come to them. Of course this thing is not a stand-alone and needs supporting mechanism like infrastructure and good internet provision. To that extent, rural Kenya is still not well equipped to handle such transformation. The digital migration will take time because it is expensive and complex.”
Kusewa, who doubles up as a Lecturer with St Paul University in Limuru, points out that rural market has opportunities particularly with farming and so eventually, things’ will turn head.
“This product we have today is good for the farming community in the rural areas. Sellers will now be quickly being able to reach buyers and cut out crooked middlemen. Eliminating unnecessary costs makes perfect sense and therefore with models like M-Pesa, things will change for the better especially with that large rural demographic. However, there must be deliberate efforts to address issues of financing, building and capacity so that this project takes route effectively across board.”
“However, I am excited about the prospects and looking ahead to the next 10 years, we certainly will have big growth in that space. The economy is already responding positively to this ideology and we must keep at it. It is a multi-billion-dollar sector that everyone can surely benefit from in the long-term. I see companies allover embracing courier services, airbnb, uber, jumia et cetera. This tells you there are a market and certainly a need.
The changing pattern of consumer behaviour is key to this movement and it is just getting started.”
