Increased mobile penetration should not excite Kenya’s E-Commerce Businesses
One thing that excites Kenya’s e-commerce businesses is the increased mobile and mobile Internet penetration in the country. For example the trashy Jumia white paper expressed optimism for their business model when it reported that smartphone adoption in Kenya continues to gain momentum. In the latest data from the Communications Authority of Kenya, mobile penetration in Kenya increased to 89.9% by March this Year. This percentage could have significantly gone up since then as more Kenyans are now coming online, especially with the availability of affordable smartphones.
As the smartphone uptake goes up, so does the number of people visiting the internet and having access to a variety of mobile applications. This is in part why most businesses are choosing to make available their products online, with the belief that more smartphones will translate to more online shopping.
Back to the Jumia White paper, the e-commerce businesses reported that it recorded a significant growth in new mobile subscriptions, estimating that 3.6 million smartphones were sold across Kenya in 2015 and the adoption of smartphones across Africa is on the rise. When it comes to internet connection, the report put Kenya as the 21st most connected country on mobile with a traffic base of 83%.
The white paper also provided that “39% of e-commerce transactions happen today through mobile, and the figure may well explode for Africa as internet penetration is led by mobile broadband connections”. Now this is where I get sidetracked. Online visits through mobile may be high, yes, but how many people in Kenya or Africa even, actually use their mobile phones to shop online? I read through the report to find if there were figures on the actual purchases made through mobile but couldn’t find any (I stand to be corrected).
Do Kenyans Really Use Their Mobile Phones to shop online?
According to the report by Jumia, an analysis on the most used smartphone features by Kenyans put online shopping at 31%. But is this the common trend among online shoppers in Kenya? I, personally, do not do online shopping. I may browse available products in an online store and do my comparisons, but at the end any purchase I make will be done at an actual store. Unless it is an international buy or placing an order for particular food, I prefer the thrill of visiting an actual store to browse and feel the product I want to buy. And the few people I interact with that shop online will always do so through their PCs or laptops, never a mobile phone.
While more Kenyans are coming online and e-commerce sites are recording more visits through mobile devices, it is a stretch to say that the same will reflect on online shopping through mobile. Why? Many people don’t actually shop using their mobile phones and recent research confirms this. According to the research, people spent $335 billion online in 2015 and sales through mobile accounted for only less than a third of that figure. Unlike mobile, shopping on a desktop or PC allows consumers access to a better view of the product they are about to purchase. They will also not care much for the many pages they have to navigate before the checkout process, which is potentially difficult on a slow connection.
A typical Kenyan who recently purchased a smartphone because it was affordable will subscribe to the cheapest data available to maintain their social media presence on a daily basis. They will want to stay online, but only if it does not eat into their data bundles. For one to make an online purchase through mobile, they will require a significant amount of data, and so will the checkout process requiring consumers to wade through a series of pages. This then starts to become cumbersome for a process that is supposed to be simple and effective. At this point, most online shoppers pause to complete the process later when they have access on a PC. If research was to be done on actual online sales made through mobile, then it would be clear on the disconnect that exists between mobile internet traffic and actual sales. So, why are e-commerce platforms basing their success on mobile phone growth when Kenyans are not buying on mobile?
Kenyans Use Mobile Phones to browse, never buy
With the growth of smartphones and cheaper bundles available across different tariffs, it is no doubt that most Kenyans even in rural areas are gaining access to eCommerce platforms. The problem that exists though is that most eCommerce sites in Kenya are using this information to structure their growth strategy and predict success. It is a fact that Kenyans are shopping online using their mobile devices, but this is only to do research on available products, compare prices among other stores and generally browse to satisfy curiosity. All this so they can plan to either visit a store, or make a buy whenever they are at a desktop or PC.
The existing notion that as mobile, and especially smartphones, continue to rise there will be increased sales in eCommerce is a myth that could injure many businesses. How people shop online will depend not only on the fact that they have a smartphone in hand and readily available internet, but also on the products they want to buy and the buying process as well. Different industries have different ways of selling online, and individual stores that have an online shop will be worst hit if they are to bank on mobile to grow their business. Electronics and entertainment, for example, will not sell online in equal measure as will furniture or clothes.
According to another research on markets that use smartphones most when shopping online, Nigeria ranked the top in Africa with most buys being in Books, Clothes and Accessories. The results however, show that most of the online purchases made through smartphones were international and not local. It is important to note that Nigeria has always ranked ahead of Kenya when it comes to online shopping and as such, will be the case in using mobile. Kenyans are yet to adopt shopping through a mobile, with most people complaining of a tight data plan, slow internet connection, long purchase processes, many clicks and screens to navigate and small screens as reasons they would rather shop on a desktop or PC.
Unless consumers have access to a mobile app providing one step checkout, which is another case altogether, actual sales on Ecommerce in Kenya is expected to remain on the desktop for a while longer. There is no doubt that mobile commerce is growing and that increased smartphone uptake will change how people buy online, but it is not in a fast and steady way as most eCommerce platforms are letting us believe. Before basing the success of your business on the rise of smartphones, research on actual online sales should be done extensively. Kenyans don’t buy online using their mobile phones; instead, they browse and make maximum use of social Media.