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Shoppers keep online retailers on their toes

By Peter Theuri | January 19th 2021 at 11:00:00 GMT +0300

AfricaSokoni Chief Executive Officer (CEO) Ebrima Fatty. [David Njaaga, Standard]

The arrival of the coronavirus pandemic on Kenyan shores in March last year altered how people shop, with an unprecedented upsurge in e-commerce in the country and around the world.  

While it has come with its fair share of challenges such as quality issues where what is delivered to the customer sometimes does not match what is advertised, more Kenyans are shopping online more than ever before. 

AfricaSokoni Chief Executive Ebrima Fatty said many people were aware of the existence most of the e-commerce platforms way before Covid-19 struck but did not see the need to use them.

To many, Mr Fatty said, they were not essential service providers, while the issue of trust also hampered uptake.

“There has always been an issue of trust. Customers have in the past been defrauded by some online sellers, making e-commerce massively unattractive to many Kenyans. People not getting what they have ordered has really spoilt the reputation of online markets,” he said in a recent interview.

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AfricaSokoni is a Kenyan e-commerce platform started three years and seeks to promote African products and businesses.

Fatty said their niche is in African products and are working hard to win the trust of online shoppers.

He said as customers started adapting to the new methods of buying in the wake of Covid-19, e-commerce platforms had to evolve to accommodate customers’ changing needs.

“It was an extraordinary year for us at AfricaSokoni. It was a year of innovation, customer obsession, employee obsession, brand building, consolidation, pivoting, increase in product offerings and building partnerships,” said Fatty.

Moses Kemibaro, the founder and chief executive of Dotsavvy Ltd, a digital business agency that provides integrated digital business solutions, said some of the e-commerce platforms saw their sales triple during the pandemic.

E-commerce increased, with some companies creating their online platforms. Consequently, volumes increased tremendously,” said Mr Kemibaro.

He said government incentives such as the waiver of charges for transactions of Sh1,000 and below on mobile money transfers lifted e-commerce.

“People realised they were using crucial time in visiting stores. They could order online and use the time they would have used to go to the stores and maybe go to the gym or spend time with their families. It was about optimising time and money,” added Kemibaro.

US management consulting firm McKinsey & Company compiled data that shows that the world has vaulted five years forward in consumer and business digital adoption in just under a year.

The result is online companies now paying more attention to their products amid stiff competition in a bid to retain customers.

Kemibaro said this has seen companies improve on reliability and quality.  

But even as adoption of online buying reached a new high, replacing physical shopping entirely, he said, is a tall order.

Kemibaro said Kenyans have adopted a “dual-purpose behaviour,” where they visit the stores when they can, knowing that should something prevent them from accessing such places, they can fall back on the option of ordering online.

“It works quite the same way as mobile banking. Mobile banking will save you time. But sometimes you might need to visit the bank yourself, say to sign documents,” he said.

Grace period

“Sometimes, appearing at the supermarket may be of benefit to the customer. There might be offers on select products, and sometimes customers want to see and feel every product on the shelves before making a choice.”

The introduction of a digital services tax on January 1, 2021 has caused disquiet among affected companies, with players in the e-commerce sector calling for a grace period before they can start making the payments, especially in the wake of Covid-19.

“We are still young companies. We are complying and have submitted the required documents but would request the government to consider these nascent companies and only charge such a tax when we are stable enough,” said AfricaSokoni’s Fatty.

The digital services tax rate is placed at 1.5 per cent of the gross transaction value.

The gross transaction value is the payment received as consideration for the digital service.

In the context of a digital marketplace provider, the transaction value is the commission or fee paid for the use of the platform.   

[email protected] 

 

Covid 19 Time Series

 


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