A summary of eCommerce related information relating to Kenya. This information is from "Preparing Your Business for Global eCommerce" prepared by the U.S. Commercial Service for exporters.
Last Published: 7/15/2016

Statistics

Capital:    Nairobi Population: 45 million GDP (USD): 61 billion Currency:    Shilling (KES)
Languages: English, Swahili
Contact
Janet Mwangi Commercial Specialist janet.mwangi@trade.gov 2542 0363 6725

Summary

The country has well-defined business to consumer (B2C) and business to business (B2B) market segments in major sectors, such as telecom, banking, and retail. B2B involves services such as business-process outsourcing, Internet marketing and advertisement, information security service, and enterprise resource planning. B2C services include premium rate subscription services, such as downloading ringtones, music, and games; consumer mobile competitions; toll-free services; and online banking.
Generally, U.S.-made products are appealing to consumers for a variety of reasons, including the perception that their quality is superior to that of Chinese products. According to Kenya National Bureau of Statistics data, the value of U.S. exports to   Kenya rose to KES 29.5 billion in May 2015 compared with China’s KES 21.1 billion. Kenyan trade experts see the shift in commercial interests in favor of the United States as a positive development with high-value  potential.

Market Entry

Popular E-Commerce Sites
The most commonly used sites are

•    jumia.com (general shopping)
•    cheki.co.ke (cars)
•    olx.co.ke (similar to eBay or  Craigslist)
•    rupu.co.ke (general shopping)

Global sites such as Amazon and Alibaba also are gaining  popularity.


Digital Advertising

Consumers now have access to 3G- or 4G-enabled smart devices, and ads are now often placed on social media platforms. However, traditional ad placements on TV, in print   media, and on the radio are common and most preferred, as they reach a wider audience. Other types of advertising are digital and 2D billboards that are found on major   highways.

Fulfillment Centers

•    FedEx
•    DHL
•    Aramex
•    Express Kenya
 

Online Payment

Ticketsasa is used for purchase of advance theater and movie tickets. Mobile payment platforms such as M-Pesa continue to lead, as do platforms integrated with online sites such as Jumia and Rupu, among others. Credit card payments for online purchases still remain low, with less than 1 percent of the population making  them.

Current Market Trends

Ninety-four percent of transactions in Kenya are still made in cash, according to McKinsey. More consumers with access to reliable Internet connections are opting to make online purchases for various reasons. Eighty-five percent of Kenyans have adopted electronic means of payment, including bank accounts, mobile phone prepaid cards, or other payment products. According to a new study by MasterCard, some of the factors affecting online purchasing are broadband costs, logistics, fragmented and open markets, literacy rates, and distrust due to Internet fraud and cyber security  issues.

According to a World Bank report, Kenya’s economy is larger and growing faster than previously estimated following a re-basing of growth figures, further elevating the country as an economic powerhouse in sub-Saharan Africa. In the baseline scenario, Kenya’s GDP is projected to grow 6.0 percent in 2015 and 6.6 percent in 2016, thanks mainly to increased aggregate demand as a result of ongoing infrastructure projects and the fall in oil prices. The report further indicates that even in the low-growth scenario, the economy will still grow in the next two years, with the growth in GDP forecast at 5.6 percent in both 2015    and 2016 and at 5.7 percent in  2017.
 

Popular Social Media Sites

• Facebook    
• Twitter    
• Instagram
• LinkedIn


Cross-Border E-Commerce

The percentage of consumers and small and medium-sized businesses engaging in cross- border commerce is growing. It is currently less than 5 percent of the total   population.


Mobile E-Commerce

About 5 percent of consumers make e-commerce purchases on their cellphones. Interest has been driven by active marketing campaigns by companies such as Jumia and OLX. Nearly 90 percent of Safaricom’s mobile subscriber population, however, makes money transfers and cashless payments for goods and services using the M-Pesa mobile payment service.

The “M” stands for mobile and pesa is the Swahili word for money. Once customers create   an M-Pesa account, they put cash into the system through any of the 65,000 agents located countrywide. The service now enables mobile diaspora remittances to and from the United Kingdom through Skrill and to the United States through Western  Union.


Current Demand

Services

Tourism and hospitality sector websites such as tripadvisor.com and sleepout.co.ke are major sites that provide online hotel booking services. Financial services products include online-banking products as well as customer operation of accounts via their mobile phones and devices.

In the education sector, distance learning is available at the graduate level through virtual classrooms, video conferences, and online  blackboards.
 

Major Buying Holidays

•    Valentine’s Day
•    Easter
•    Eid
•    Christmas

Challenges

Data Collection

The Communications Authority of Kenya (formerly the Communications Commission of Kenya) is the regulator of all businesses in the information and communication technology sector. It may impose licensing restrictions for safeguarding how online consumer information is gathered and distributed.
 

IPR

Any content that violates the intellectual property rights of another person, including pirated movies, music, and patents, is  prohibited.
 

Regulations and Initiatives

The Communications Authority of Kenya (CAK) provides licensing for   transformational
e-commerce initiatives. Various legislation also governs information and communications technology initiatives under various acts, such as the Science and Technology  Act
(Cap. 250) of 1977, the Kenya Broadcasting Corporation Act of 1988, and the Kenya Communications Act of 1998. Overall, a proper legal and regulatory framework  for
c.    ommerce is lacking in Kenya. According to CAK, increased use of e-commerce and   other e-transactions may lead to increased cybercrimes and attacks that require robust legal frameworks and enhanced internal capacity to address the cybercrimes and network security.
 

Prohibited Products

•    Soaps and cosmetic products containing mercury
•    Used tires for light commercial and passenger vehicles
•    Narcotic drugs
•    Counterfeit goods of all kinds
•    Agricultural and industrial chemicals (full list reference: EAC Customs Management Act of 2004)
 

Prepared by the International Trade Administration. With its network of 108 offices across the United States and in more than 75 countries, the International Trade Administration of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.