E-Commerce firms in Kenya not ready for competition from Amazon and Alibaba

E-commerce companies in Kenya might not be ready for competition from global giants such as Amazon and Alibaba. This is according to a new World Bank report

The global lender noted that although companies such as Jumia Kenya had made progress in online business in the country, they still did not have the muscle to compete against America’s Amazon and China’s Alibaba.

“For the moment, the global e-commerce majors such as Amazon and  Alibaba, have not developed a strong presence in Africa, though Amazon is building a fulfilment centre in Cape Town and Alibaba has established a fund for young African entrepreneurs,” read part of the by World Bank report dubbed Information and Communications for Development.

“It remains to be seen whether local African e-commerce companies such as Takealot (South Africa), Kilimall (Kenya), Konga (Nigeria) as well as Jumia can build sufficient scale to resist the global majors when they do arrive.”

However, the World Bank lauded the contribution of local e-commerce firms such as Jumia to the penetration of online shopping in Kenya through the adoption of unique payment methods. 

“The company (Jumia) also offers the facility to pay through mobile money. In addition, it has launched offline “experiential centres” to help consumers overcome their doubts about the look and feel of the products they are purchasing.

It also noted that despite the lack of formal street addresses that has been a major constraint on home delivery in many African cities or detailed mapping, Jumia has developed its own maps for delivery.

The local e-commerce fraternity was upset after an online classifieds firm OLX shut down its Kenyan operations rendering over 31 employees jobless.

The South African e-commerce company said yesterday it would also close its Nigerian office - a blow to the growth of e-commerce in the country.

The unveiling of Safaricom’s e-commerce platform Masoko has not done much to increase the nascent online business.