April 14, 2024
Challenges Facing eCommerce in Kenya

Kenya’s eCommerce sector is snowballing, and the country has great potential to become a leading market in Africa. However, several challenges need to be addressed before this can happen.

1. Lack of awareness.

Lack of awareness is one of the significant challenges facing eCommerce in Kenya. 

According to a recent study by the University of Nairobi, only 4% of Kenyans are aware of eCommerce and what it entails. This is a worrying trend considering eCommerce’s potential to grow the Kenyan economy.

There are several reasons for the low awareness levels. One is the lack of reliable internet infrastructure. This makes it difficult for people to access eCommerce platforms and use them to make purchases. 

Another reason is the lack of understanding of how eCommerce works. This means that even if people have access to platforms, they may not know how to use them properly.

How can this be solved?

You can do several things to solve this problem. 

One is to increase investment in internet infrastructure. This will make it easier for people to access eCommerce platforms and use them to make purchases. 

Another solution is to educate people on how eCommerce works. This can be done through workshops, seminars, and other awareness-raising initiatives.

2. Unreliable delivery services.

In Kenya, eCommerce businesses have been struggling to find reliable delivery services. 

This has been a major challenge for businesses, as they have to rely on unreliable third-party delivery services. 

This has led to many businesses losing customers and sales, as orders are often not delivered on time or at all. 

Some businesses have overcome this challenge by partnering with private courier companies, but this is not a sustainable solution for all businesses. 

The Kenyan government needs to improve the country’s infrastructure to provide reliable delivery services for all businesses, large and small. 

Otherwise, eCommerce in Kenya will continue to struggle and lag behind other countries. 

3. Supply chain issues.

Supply chain issues are another challenge facing eCommerce in Kenya. The country’s infrastructure is not well-developed, which makes it difficult to move goods around. 

This can lead to delays and disruptions in the supply of goods, which can impact businesses negatively. In addition, there is a lack of warehousing and storage facilities in Kenya. This means that companies have to store their products on their premises, which can be expensive and impractical.

How can this be solved?

One solution is to invest in developing the country’s infrastructure. This will make it easier for businesses to move goods around and reduce disruptions in the supply chain. 

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Another solution is to build more warehouses and storage facilities, so businesses have somewhere safe and affordable to store their products.

4. Lack of trust

In Kenya, lack of trust is one of eCommerce’s biggest challenges. This is because Kenyan consumers are skeptical of online shopping and are not confident in the security of their personal information. 

As a result, many Kenyans prefer to shop in person or through local businesses they trust.

Another challenge related to trust is payment security. Many Kenyans do not have access to credit cards or PayPal, standard payment methods for online purchases. 

This leaves them reliant on cash-on-delivery (COD) options, which can be unreliable.

Without trust, eCommerce will continue to struggle in Kenya. 

To build trust, eCommerce businesses must provide a secure and user-friendly shopping experience. They also need to educate consumers on the benefits of shopping online and how to stay safe. 

5. High costs.

The high cost of living is a significant challenge facing eCommerce in Kenya. The cost of goods and services is often double or triple what it is in developed countries, making it difficult for Kenyans to afford necessities, let alone purchase items online.

In addition to the high cost of goods, Kenyans also have to contend with high prices for shipping and delivery. 

These costs can often make up a significant portion of the total price of an online purchase, making it even more difficult for Kenyan consumers to take advantage of eCommerce.

Finally, Kenyans also have to deal with a lack of reliable and affordable internet access. This lack of access makes it difficult for consumers to research products, compare prices online, and make purchases. 

It also makes it difficult for businesses to reach potential customers and sell their products effectively. 

How can this be solved?

One solution is for businesses to offer more affordable pricing for their products. 

Another solution is for businesses to provide free or discounted shipping and delivery options. 

Finally, investment in internet infrastructure would make it easier for Kenyans to access eCommerce platforms and use them to make purchases.

6. Poor infrastructure

Kenya’s eCommerce sector is increasing, but the country’s infrastructure is struggling to keep up.

Poor roads, limited access to reliable electricity, and high shipping costs are some challenges facing eCommerce businesses in Kenya.

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These challenges make it difficult for businesses to reach customers, process orders and deliver goods promptly and efficiently.

As a result, many businesses are forced to operate at a loss or scale back their operations, which hinders the growth of the sector as a whole.

The Kenyan government has acknowledged these challenges and is working to improve the country’s infrastructure, but much more needs to be done to support eCommerce growth in Kenya.

How can this be solved?

One solution is for the government to continue investing in infrastructure development. This will make it easier for businesses to reach customers and deliver goods in a timely and efficient manner. 

Another solution is for businesses to work together to find innovative ways to circumvent Kenya’s infrastructure challenges. 

For example, some businesses have started using drones to deliver goods to remote areas where roads are poor or nonexistent. 

7. Highly fragmented markets.

What do fragmented markets mean?

In very simple terms, it means that the target market is divided into many small pieces.

A good example would be if you were selling mobile phones in Kenya. The Kenyan market is highly fragmented, with over 30 different operators offering services. This makes it very difficult to reach all potential customers through a single channel such as online or offline stores.

The solution:

One way to overcome this challenge is to focus on a niche market. 

For example, you could focus on selling only to businesses rather than trying to sell mobile phones to all Kenyans. This would allow you to target a specific group of customers and make it easier to reach them.

Another solution is to partner with local companies that have a wide distribution network. This will help you reach more customers without having to set up your own distribution channels.

8. High illiteracy rates.

There are many challenges that eCommerce in Kenya faces, but one of the most pressing is the high illiteracy rate. 

According to a recent study, 18.46% of Kenyans cannot read or write. This means that a large portion of the population is unable to take advantage of the many benefits that eCommerce has to offer.

This high illiteracy rate presents a number of challenges for eCommerce in Kenya. 

First, it makes it difficult for people to access and use online services. This can be a major barrier to entry for many potential customers.

Second, it limits the ability of businesses to reach and engage with their target audience. Many marketing and advertising campaigns rely on text-based communication, which is inaccessible to those who cannot read or write.

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The solution:

One way to overcome this challenge is to focus on alternative channels of communication such as audio and video. This will allow you to reach a wider audience and engage with them in a more effective way. 

Another solution is to partner with local organizations that can help you reach the illiterate population. 

For example, you could partner with a literacy organization to provide training on how to use online services.

9. Merchants scamming buyers.

Unfortunately, there are many cases of fraud and scams in the eCommerce industry. This is a global problem, but it is especially prevalent in Kenya. 

There have been numerous reports of buyers being scammed by sellers on online platforms such as Facebook and Instagram shops. 

In most cases, the seller will take the buyer’s money without delivering the product or service that was promised.

This type of scam can be very difficult to detect and prevent. 

The best way to protect yourself is to only deal with reputable sellers. You can also use an escrow service, which will hold the buyer’s money until the product or service has been delivered.

10. Stiff competition from local open-air markets.

In many parts of Kenya, open-air markets are the preferred way to shop for everyday items. This is because they offer a wide variety of goods at very low prices. 

For many people, these markets are more convenient and trustworthy than online stores. 

As a result, eCommerce businesses in Kenya face stiff competition from these local markets.

The solution:

One way to overcome this challenge is to focus on selling products that cannot be easily found in open-air markets. 

For example, you could focus on selling electronics or other high-value items. 

Another solution is to partner with local market vendors and help them sell their goods online. This will give you access to a more extensive customer base and allow you to tap into customers’ existing trust in these vendors.

Final thoughts

Kenya’s eCommerce industry is growing rapidly, but many challenges still need to be addressed. 

These challenges include a highly fragmented market, high illiteracy rates, and stiff competition from local open-air markets. 

However, there are solutions to these problems, and Kenya has the potential to become a leading eCommerce market in Africa.

Read also: How To Start an eCommerce Business In Kenya.

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