Rocket Internet’s imminent launch of Jumia.co.ke could rock Kenya’s still nascent e-commerce landscape
I’m what you would call a veteran of sorts as far as the Internet in Kenya is concerned having worked for over 15 years in the space in a myriad of companies doing all sorts of Internet things. You could say I know a thing or two about how it all works in this market, from Internet access all the way to selling Internet-based mobile advertising. Therefore, for some inexplicable reason, I still can’t understand why it seems that e-commerce, which is actually old hat these days globally, still has not (really) taken off in Kenya?!
Yes, there have been all sorts of e-commerce start-ups in Kenya which have had varying degrees of success since as far as I can remember but it seems that no one has really cracked it, at scale. This means, building an e-commerce business from the ground up that could potentially tackle the retail behemoths that are Nakumatt, Tuskys and Uchumi. Better yet, what about an Amazon.com of sorts that could take on the combined might of Westgate Mall, Yaya Centre and Sarit Centre, all rolled into one – as in real SCALE.
I see no reason why this is not possible as all the ingredients are in place. Kenya leads the world in mobile money with over 15 million mobile subscribers having access to Safaricom’s wildly successful M-Pesa. Internet access in Kenya is speculatively thought to be over 10 million users which would imply a penetration of roughly 25% – it is also fast and inexpensive with the abundant broadband bandwidth on offer. Banks such as KCB and I&M Bank offer locally-based e-commerce packages for businesses that include online payment processing and merchant accounts. Lastly, Kenya as a market generally excels at trade and business so there should be a massive appetite for e-commerce.
However, to be honest, most of the e-commerce businesses in Kenya that are making massive headway at the moment are small to medium sized businesses ranging from the “mom and pop” variety working from their homes to regular retail businesses that have managed to “bolt on” e-commerce-based sales online. That being said, its a well known fact that MIH Internet East Africa shockingly shuttered Kalahari.co.ke just over a year ago which until then represented probably the biggest e-commerce play in East Africa. Indeed, Ringier Kenya which has its HQ in Switzerland has been driving e-commerce with its Groupon clone Rupu for the better part of the past few years with a decent level of success. Rupu has also recently expanded to include RupuShops.co.ke and even RupuTravel.co.ke. Not to be left behind, MIH Internet East Africa launched Mocality Deals as well back in 2010 and it has been duking it out with both Rupu and Zetu as the major daily deals web sites in Kenya.
All these developments bring me to the point of this blog post regarding Germany’s Rocket Internet and its imminent launch of Jumia.co.ke as its primary e-commerce brand in Kenya. Jumia is the brand being used by Rocket Internet to roll-out its e-commerce offering throughout Africa. Jumia is already active in Egypt, Morocco and Nigeria where they are doing really well (from what I hear). In Nigeria for instance, Jumia.com.ng has managed to achieve market leadership for e-commerce in a matter of months. Funny enough, I just found out that Rocket Internet has already been active in Kenya with HelloFood.co.ke which lets you order take out via their web site. This service has also been rolled out in other African markets – it looks like well-established EatIn.co.ke could get “disrupted” by HelloFood. It seems that no digital business model or market size seems to be too small for Rocket Internet to take a stab at it.
After hearing some rather colourful stories about how aggressive Rocket Internet is in its market growth strategies, Kenya could without a doubt see the arrival of what may potentially become known as “Kenya’s Amazon.com.” However, it’s still early days for sure and one must imagine that the likes of MIH Internet East Africa and Ringier Kenya as the other “big boys” in Kenya’s e-commerce space will be keenly watching, and, responding quickly to the arrival of Jumia in Kenya. Whichever way this goes, I am waiting to see how well they perform and hopefully, finally, we will see a major e-commerce revolution take place in Kenya.