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Middle class shoppers bundle out the masses from online markets

FINANCIAL STANDARD
By Dominic Omondi | Oct 20th 2015 | 4 min read
By Dominic Omondi | October 20th 2015
FINANCIAL STANDARD

Imagine a man, let us call him John, looking like he has gone too long without a shower and is dressed in a torn T-shirt, frayed jeans and a pair of worn-out shoes. If John were to try to enter the opulent Village Market shopping mall, he would likely be denied entry or frisked a lot more than strictly necessary.

But if John had an Internet-enabled phone and went to one of the ever-growing online trading markets, he should be able to do some window shopping without facing any judgement.

And if he had items, such as maize, fertiliser or second-hand clothes to sell, he could set up a business at no cost, right? Well, not really.

Online market platforms are fast turning into middle-class shopping grounds, teeming with all sorts of consumer products popular with the bourgeoisie. These sites are slowly turning into online versions of high-end malls. As a result, John would have trouble finding a suitable buyer for his maize.

This situation is drawing attention as more Kenyans across the class divide go online.

According to data from the Communications Authority of Kenya (CA), Internet subscriptions increased 5.9 per cent to reach 19.9 million in the April to June quarter, up from 18.8 million the previous quarter. 

Consequently, the estimated number of Internet users increased from 29.1 million in the first three months of the year to 29.6 million in the second quarter, according to CA. This means about seven in 10 Kenyans have access to the Internet.

Kenya’s middle class population, however, stands at 19.9 million, or about four in 10 Kenyans, according to an African Development Bank (AfDB) report. Thus, the categorisation and pricing of products in online markets is elbowing out millions of potential online traders.

Exotic tastes

While online stores describe themselves as open markets that can be accessed by anyone, the categories they have chosen tend to be slanted toward those with some travel experience or exotic tastes.

“OLX is a free online classifieds platform that brings sellers and buyers together. It is just like Gikomba. We don’t set prices and don’t get involved in the transaction of the customers,” said Pauline Masese, OLX’s public relations officer.

Unfortunately, despite the company’s best efforts, buying and selling items on OLX has slowly bundled out the not-so-rich or those who do not have a taste for luxury products. Listings are becoming as expensive as items found in shops in high-end malls.

Even the categories online are inclined to the middle class, with popular headers being real estate, vehicles, home-furniture-gardens, and animals and pets. By the time of going to press, the categories with the most listings on OLX were real estate and vehicles, with 61,018 and 52,327 ads, respectively.

Under home-furniture-gardens, where you would expect affordable household appliances, most products on offer have exotic-sounding descriptions, such as ‘antique marquette dining set’ for Sh180,000. Those who can afford ‘garden umbrellas’, ‘lyricists’ or ‘event décor specialists’ are certainly not low-income earners by any definition.

Further, most online sellers come from the upmarket neighbourhoods of Kilimani, Lavington, Westlands, Kileleshwa and Runda.

An official from OLX, who asked not to be named as he is not authorised to speak to the press, said: “Anyone is allowed to use our site, and people from the areas you have mentioned are making use of the site to sell both new and old products.”

However, he could not explain why people from upper middle class areas use the service more than those from lower-end regions. 

Basic necessity

David Kibue, an IT specialist, said most online platforms target the middle class who can afford smartphones that enable them surf on their sites. 

But owning a smartphone is becoming a basic necessity, with CA data showing that 99 per cent of subscribers access the Internet through their mobile phones.

However, Pigiame, another online classifieds site, amid some middle class-inclined categories, has farming and agriculture, a particularly relevant header for a country that is largely agricultural. 

Other online sites have gone ahead and introduced transaction fees for listings or sales, or focus on purely middle class commodities like cars, further excluding the masses.

OLX said it is in the process of rectifying this.

“We have noticed that the categories that we are using are not compatible with local tastes, since the application was borrowed from another country,” said Ms Masese, who added that a localisation process would be completed within the next two months.

“So if agriculture contributes the most to GDP, then it makes sense for us to have an agricultural category.”

Soft landing

Masese added that the kind of trading they encourage on OLX is the customer-to-customer model. However, the firm has noticed that businesses are taking over the platform, creating business-to-customer models, slowly crowding out individual users from selling products.

“We are trying to create some space for businesses to compete against each other, not customers,” she said, adding that they have introduced a rule that bars a user from selling more than three phones, for example.

But until then, John has a soft landing — social media. One popular social media platform for the not-so-rich is the Facebook page, Soko Nyeusi (which translates to black market), dominated by young people, with the dominant language being sheng.

Trading activities range from seeking help on how to unblock a phone to selling rice from Mwea. The latest tablets are on sale, as are copies of various course notes and revision tests.

Facebook users can get in touch with the page administrators to sell something, or write their own post with the item they want to sell.

Pages that work the same way and have thousands of fans include Online Soko, Soko Kuu, Soko Nyeupe and Kenya Farmers Market.

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