Kenyan start-up Nuzo is banking on blockchain to disrupt the multi-million shillings e-commerce industry that has for years proved a tough nut to crack for many investors.
Nuzo, which runs a shop-to-earn e-commerce platform, last month launched Nuzo Coins which will be earned by users of its platform whenever they buy or sell online.
“We believe that including the community in ownership and governance of digital platforms is the best way to unlock the true potential of digital commerce in Africa,” says Nuzo Founder Charles Nichols.
Nichols, who previously co-founded SunCulture, another start-up that has raised nearly Sh6 billion said integrating blockchain will give the platform’s users a different shopping experience and also help Nuzo extend its reach to more prospective clients.
“We have seen first-hand at Nuzo that by including our community in ownership, we have been able to build a popular marketplace that is growing very rapidly,” said Nichols.
“The high engagement of the Nuzo community enables us to create new marketing opportunities for businesses that can’t be found anywhere else.”
The platform users will earn Nuzo Coins when they buy and sell online and these coins increase in value as the marketplace grows.
Nuzo Coins are powered by the mobile-first, carbon-negative Celo blockchain and can be redeemed to buy goods, airtime, and pay bills.
Since launching in June, the platform now counts 40,000 users and growing rapidly.
However, compared to other regions, Africa still lags behind in e-commerce adoption with less than tow per cent of retail transactions happening online compared to 19 per cent globally.
Kenya’s e-commerce sector has for years been ripe for disruption but attempts by both large private sector players and start-ups have yielded little in terms of market growth and new earning streams.
Companies like Jumia which raised massive investor funds on the back of the country’s e-commerce potential are still struggling to cut the high operating and logistics costs that eat into revenues.
CitiBank estimates that Kenya’s e-commerce market could be worth Sh700 million. Unlocking this value has however proved to be a moving target and Nuzo is banking on the decentralised nature of blockchain to attract more high-value users.
A recent report by the United Nations Conference on Trade and Development indicates that 4.2 million people in Kenya own cryptocurrency assets.