Kalahari.co.ke is dead in Kenya… RIP. When they came in they made a lot of noise, advertised almost everywhere but at the end,the site is being shut down in Kenya. Reason being, poor business in Kenya. It is funny Nigeria has the same problem and the same action being taken. Kenyans go online to look for products but not many buy things online unless the given product can’t be found completely physically somewhere. Earlier on the reason given was the low rate of credit card penetration in Kenya but many firms including Kalahari changed tacked and incorporated Mpesa as the mode of payment . But the closure of Kalahari means this too not working at the moment.
By the way Kalahari had 14 million users and over 3million products and services listed on the site. In hhis part of the world that is huge and it is disappointing that despite that and the investment in terms of the advertisement on the media and online, the site still has to be shut down.
So what is the real problem?
My gut feeling is that the problem is lies with the trust. Many Kenyans don’t trust the local companies selling products and services online. The online transaction needs trusted payment system and trusted dealers. When one go online and pay for something, they should have a complete trust that the given service or product will be delivered. I think that is lacking at the moment.
Sometime back i wrote an article wondering why it is so hard to make money online in Kenya and quoted dealfish as some of the most popular website in Kenya but still can’t make money. At the moment deafish is the second most popular website in Kenya just behind nation.co.ke according to alexa.com. But again dealfish is free and at the moment not making money online. On that article the East regional manager Mr. Moses Kemibaro commented that they have a plan. Here:
Moses Kemibaro here. In responding to your comment “popular companies like Dealfish still can’t make money online” I think you should get a clearer picture on who we are and what we plan to do. Dealfish is part of MIH which owns many successful and profitable online classifieds businesses globally. Therefore, we know how to make money. We are still in the “launch” phase in building Dealfish as a Pan-African business. This is not unlike how Amazon did not make a profit for years as they invested in “building” their business to become the success they are today. We will make money but its not like we are clueless as to how this will be done. This may be unusual in a market like Kenya but trust me we are in it to make money – just not yet. I hope this clarifies matters?
By the way Kalahari.co.ke is part of MIH which is the same company that operates Mocality, the online business directory and Dealfish. Talking about mocality they had to recently start providing the daily deals meaning that depending purely on ecommerce or mcommerce is not the route at the moment.
And the big question i am asking this morning is, is the dealfish the next to go down?
Hey Kachwanya, nice piece but I don’t think the problem is trust. I can confirm that I’ve sold several things online without ever meeting my customers, and these are services where there is no physical product save for a document. I’ve been paid through MPESA regularly in amounts over Sh. 20,000 and some of these customers just found me through google.
I think the problem with Kalahari is more fundamental, which is that their website has no USP. 1. Price? Nope you can get the same stuff they sell much cheaper by visiting shopping malls from Eastleigh to Westage. 2. Convenience? Nope. Their products take upto 7 days to ship – online shopping should be about instant gratification. 3. Selection? If maybe the first two were true, we could overlook this – but I can assure you, you’re better off in Nakumatt.Kalahari.co.ke wrongly assumes that their competition is Westage, Junction and other uptown shopping malls, but really it is the million and one 4’x4′ boutiques that charge Sh.1m goodwill but are still in business. Take a look at aliexpress.com and you’ll see what Kalahari.co.ke would have to become before it ever got my shilling.
Hapo umebonga real. The USP of Amazon was that they were able to use their website to offer exhaustive inventory, low prices and convenience. Kalahari didn’t offer any of these, but then again you have to admit, in a net importing country, it is very hard to gain these competitive advantages.
I worry about Dealfish now. They are clearly spending millions upon millions on marketing. Will they be able to deliver the high short-term returns that the Naspers group usually demands? We’ll see.
As for the silver lining in all of this, I think the rest of us netpreneurs could use the data from MIH to analyze the state of the market in terms of profitability, critical mass, etc. I am currently looking to the iHub research team to help out with this.
I would agree with Kachwanya that one of the reason the kalahari.com faced most is the lack of trust and secondly most of the Kenya online users do browse for the goods yet there is no one time they will buy goods online. But as former C.E.O of Safaricom said. Kenyan market needs some patience. Kalahari.com could have took a different strategy and may be they could had a good business platform in future.
True man, Kalahari needed some patient and change of strategy not closing down. Kenyans like to wait and see and gauge how serious one is. Closing down will daint trust further and if they ever come back we shall not care. Convinience alone cannot sell, it has to be a combination including prices and Kenyans really like low prices. For Mocality and Dealfish i wish they could hold on a bit lest they destroy the trust that exist for similar websites. eCommerece will pick up with time only the best strategy has not been explored. What worked for Amazon and eBay may not work here. Kenyans like bargaining, i have not seen any eCommerce site offering that. e.g check http://www.ioffer.com in China, it allows for negotiation. As for delivery and competition from 4*4 exhibition stores, cost cutting and efficiency can beat them. I think Kalahari thought they could make quick money by pioneering the market, thats why they poured millions. Now that they have closed down what does Moses Kemibaro has to say about the comment you have quoted? I have not bought goods online but have bought services with a lot of trust and paid through Mpesa.
Kalahari What is Kalahari.co.ke Actually this people have been quite for a while. I just think theirs is a Wrong marketing plan thats all
Hey Karanja was just thinkin over your Comment a while ago.
I was just wondering what kind of Services do you offer and how do you market them
check out http://formakenyancompany.com. I use SEO, AdWords and Facebook Ads.
Mr. Majani, please provide the link to the MIH data – sounds interesting
Update: Moses Kemibaro has quit as Regional Manager of Dealfish
I agree with Harry. Why do it online if I can do it better without the platform? There was absolutely zero value proposition for the user.
As for trust, it grows based on the user experience (especially the first users) who automatically become free marketers (evangelists) for your product. Kalahari.co.ke had none of this
stop rewriting contents from other articles be creative