Cybersecurity, trust woes slow Kenya's e-commerce growth

Rapid expansion of online trade is constrained by growing concerns around cybersecurity and consumer trust. [Courtesy]

Kenya's booming e-commerce sector faces significant headwinds from persistent cybersecurity threats and a lack of consumer trust, a new government draft policy shows.

These factors deter many Kenyans from fully embracing online shopping

The "Kenya National E-Commerce Policy Draft, June 2025," reviewed by Financial Standard highlights these challenges as critical obstacles to the sector's full potential, according to the Ministry of Investments, Trade and Industry.

The document notes that despite rapid expansion in online trade, its growth is "constrained by growing concerns around cybersecurity and consumer trust."

The country's e-commerce penetration reached 43.2 per cent in 2023.

For many Kenyans, the risk of online fraud is a major concern.

"Reported cybercrime incidents increased dramatically from 700 million in 2022 to 1.7 billion in 2023," the policy reveals, attributing this surge largely to "system vulnerabilities and digital fraud."

This rise in digital crime poses "significant threats to consumer trust in online commerce," the document adds.

While Kenya has a Computer Misuse and Cybercrime Act (2018) in place, the policy acknowledges that "the enforcement and compliance with the provisions of the Act have remained a challenge."

Consumer trust issues extend beyond security to concerns about fair practices and effective ways to resolve problems.

"In the absence of an effective consumer protection framework...the majority of would-be users will continue to shy away from engaging in e-commerce related activities," states the draft policy.

Specific concerns cited include "violation of consumer rights by e-commerce business, inadequate dispute resolution mechanisms...and misleading market conduct."

Such experiences are not uncommon for online shoppers.

For instance, Nairobi resident Jane Mwangi, 34, told Financial Standard via a telephone interview that she stopped buying clothes online after ordering a dress that never arrived, with the seller becoming unreachable.

"There was no one to complain to, no easy way to get my money back," she said.

Similarly, Mark Omondi, 48, a small business owner in Kisumu, recounted via email losing Sh15,000 when his payment details were compromised after an online purchase, leading to unauthorised transactions.

"It makes you think twice about putting your card details anywhere online," Omondi said.

The cumulative effect of these challenges is that "weak or unclear provisions around consumer rights, data privacy, dispute resolution, and cybersecurity have eroded user trust in e-commerce platforms, limiting broader adoption, especially in rural and underserved areas," the policy's rationale explains.

Even with widespread mobile internet access and innovative mobile money platforms, this erosion of trust remains a significant barrier.

To counter these issues, the draft policy proposes several actions. It aims to develop "digital trustmark and verifiable credentials for e-commerce players" to enhance confidence.

It also seeks to promote "local e-commerce infrastructure to boost data sovereignty" and enhance "regulatory clarity fostering interoperability among digital platforms," the document outlines.

As Kenya seeks to position itself as a global player in e-commerce, addressing these fundamental issues of cybersecurity and consumer trust will be paramount.

Without a strong foundation of confidence and protection, the country risks hindering the full potential of its digital marketplace and limiting the broader socio-economic benefits that e-commerce can deliver, according to the policy.