The biggest losers in the paradigm shift to online shopping would no doubt have been the territorial store owners, who stood to lose a significant number of customers to e-commerce — or so it was figured.
But as it is emerging now, the reverse is actually true. Most Kenyan entrepreneurs have chosen to swim with the tide and have shifted all or part of their businesses online in an effort to bridge between offline and online sales and capture a wider market while increasing their brand presence.
Hill Ren MD for JUA Energy a company that manufactures electronic accessories for consumers who lack electricity and other technological products is one such entrepreneur who established entirely online and has no physical stores.
“My shop is purely virtual on Jumia Kenya’s online marketplace where only my products are listed. Selling online exempts me from costs like rent, salaries, wages and insurances, storage costs (as Jumia store my products for free), county council/government permits and risks like theft, fire and looting. Jumia takes an agreed commission only for items sold and remits the rest to my account.”
Gideon Sigei, 27, is a stall owner in Nairobi’s Luthuli Avenue with several virtual shops across several e-commerce platforms.
“I have listed over 800 smartphones on OLX, Jumia, Kaymu, and on our Facebook page to maximize on exposure to potential customers. For Jumia, I use the seller centre portal to track shipped, pending and cancelled orders on my own, when an item is sold, I mark it as out of stock,” Sigei said.
Statistics shared by Communication’s Authority of Kenya (CAK) indicate that the total number of data and internet subscriptions has grown by close to six percent, and now stands at nearly 15 million. Those numbers are what have jostled retail giants like BATA, Nairobi Sports House, Text Book centre among others to embrace e-commerce in addition to having physical branches across the country thus choosing to rent virtual shops on Jumia.
According to Parinaz Firozi, MD Jumia Kenya, “There is mounting pressure on physical stores to match online prices.” Firozi says that online prices are much lower than those offered by physical stores.
Her comments are seconded by a survey conducted by MasterCard in May 2012, which indicated that around 71 percent of online shoppers have expressed satisfaction with the overall experience. The survey further explained that most items were cheaper online than when offered for sale offline, with the most popular online products being fashion and electronics.
Firozi also argues, “Some shoppers visit physical stores to sample products they intend to buy. They then compare prices with those online factoring in transportation costs and risks. Seven out of 10 customers prefer to shop online and have the item delivered to their doorstep for free where they can pay on delivery.”
Aleeda Fazal MD Kaymu Kenya shares these sentiments, saying, “Convenience is what matters in these present days, if a customer cannot access a company’s products online, the chances of them buying from another company whose products are online are very high.”
As the number of data and internet subscriptions continues to skyrocket in Kenya, there’s no doubt that more and more companies will migrate online where their customers are. And so the question still remains: are virtual shops the future of retail in Kenya?