A new report by Visa has demonstrated the potential for the local e-commerce sector in Kenya to grow. This gives entrepreneurs more reason to do business online.
According to a new survey by Visa, Kenya is one of the top e-commerce markets in Sub-Saharan Africa. This is owing to ease of access to financial services and cross-border businesses driving the majority of e-Commerce transactions in Kenya.
Kenya ranks third in overall volume of eCommerce in 2019 and 2020, according to a Visa research titled ‘E-trade developments in Sub Saharan Africa (SSA)’. South Africa ranks first place, Nigeria second and Kenya third.
New e-commerce users increased by 5% in Sub Saharan Africa
“E-commerce has experienced phenomenal growth rates around the world, and even recent setbacks as result of the continuing Covid-19 pandemic haven’t stopped its rise.” Visa SSA Report.
According to the report, global e-commerce sales are expected to reach $7 trillion by 2024.
The ongoing Covid-19 epidemic, according to the report, has fueled the expansion of e-commerce. With lockdown restrictions being implemented around the world to stop the spread of disease, forcing buyers to turn to eCommerce to fill the hole created by face-to-face retail’s shutdown.
According to the report, new e-Commerce users increased by 5% in Sub Saharan Africa (SSA). This is as a result of the lockdown, compared to the active base in SSA the previous year.
The ability to access financial services, digital payment methods, and digital infrastructure are the most essential e-Commerce enablers.
The report shows that bank accounts facilitated financial access in Nigeria and South Africa, while Mobile Money facilitated financial access in Kenya.
“Digital access is primarily enabled by mobile phones across all three markets. Internet penetration is highest in South Africa at just under two-thirds of the population. On the other hand, Kenya and Nigeria each have just over one-third of the population with digital access through the internet.”
Another finding was that while cash was prevalent in Nigeria, electronic payment instruments such as mobile money in Kenya and cards in South Africa matched their top drivers of access.
While spending power has decreased across the continent as a result of numerous lockdowns, the report states that eCommerce spending has not decreased to the same extent as face-to-face spending; in fact, the closure of face-to-face environments has attracted new users and increased the frequency of eCommerce spending.
When it comes to digital payments, cards have grown in popularity across the continent, with Kenya seeing the most growth.
Contactless has a significant preference, which is notable for allowing secure card payments on delivery and the usage of e-wallet services.