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The impact of the gig economy on e-commerce and its sustainability

BUSINESS NEWS
By Sara Okuoro | February 24th 2021

The growth of the gig economy, where short-term contracts or freelance work prevail as opposed to permanent jobs, has enabled people to increase their income and run multiple ‘side-hustles.’

In the gig economy, participants enjoy the flexibility of choosing what to do and when to work, and the convenience of being matched up with potential clients through mobile apps.

In Kenya, ride-hailing apps and online professional workers comprise the lion’s share of the gig economy both in value and number of workers.

Research from Mercy Corps suggests that the offline Kenyan gig economy will reach USD28.95 billion in 2023 from USD19.6 billion in 2019 and will employ a total of 5.7 million workers.

The growth of gig economy is fueled in part by mobile, internet and smartphone penetration and the proliferation of mobile money in Kenya. Mobile money platforms such as M-Pesa have become the second most-used payment channel in Kenya after cash.

Ecommerce has skyrocketed in Kenya with the number of customers and businesses running their transactions online rising. 

Glovo is an on-demand technology platform that connects customers with riders to get products delivered through a mobile app.

Priscilla Muhiu (pictured above), Glovo’s general manager for Kenya shares on the gig economy, e-commerce and COVID-19.

The impact of the gig economy on e-commerce and its sustainability - The gig economy has given Kenyans the freedom to work and live more efficiently and effectively. It has also opened up an innovative new revenue stream for the continent — allowing millions to take up flexible work on their own terms.

Gig work is becoming increasingly important as a potential pathway to socio-economic development and employment creation, given Africa’s unique status as the continent with the youngest population in the world amongst the highest youth unemployment rate.

Impact of Covid-19 to the business and how the company survived- As part of the protocols put in place by the government to stem the tide of the pandemic, consumers created and reinforced new online buying behaviors and habits.

Consumers were more motivated than ever to shop online and have deliveries made at their doorstep and the ripple effect of this was a 30 per cent increase in grocery orders in Kenya as reported by Glovo in 2020.

The evolution of online delivery space and the overall outlook of the on-demand delivery market- As the online retail space continues to expand, consumers are choosing click retail over traditional brick and mortar stores.

Online retail presents a unique opportunity to have a positive impact on the Kenyan economy including job creation for riders and a business lifeline for restaurant owners.

This shift in consumer behavior, coupled with the advent of Covid-19 and increase in internet penetration, has seen the rapid growth of on-demand delivery start-ups.

What strategy plans does Glovo have for Kenya in 2021? – We are looking at offering more competitive delivery fees. We will continue to expand into new towns in Kenya and getting into various partnerships that will benefit the consumers.

Pricilla’s key lessons in life - You are not defined by what is in your head, you are what you do, you don’t have to feel like today is your day, you just have to act like it is. Actions may not bring happiness but there’s no happiness without action and also one of my favorite lessons is, life is not a shop for your pauses and your procrastinations.

 

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