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Jumia Targets Local Manufacturers to Boost E-Commerce Growth

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Online purchase and sale of products is a trend that is fast developing globally but quite slowly in Kenya.

In Kenya, only 1% of Kenyans buy goods online with the rest prefer to physically purchase from the shop. However, there are signs of this percentage improving with time as more Kenyans change to digital.

10% of smartphone sells in the country are done online, according to statistics by Jumia. Just the fact that Kenyans are buying smartphones shows how the country is digitalizing. The fact 10% of those buying phones are doing so online is a sign of growth in the country’s E-Commerce sector.

455 million people are active Internet users out of the 1.2 billion population of the world today. Last year, the Jumia E-Commerce website was visited by 100 million people in Africa. However, out of these numbers, only 4 million actually transacted.

Based on these facts, Jumia Kenya Managing Director Sam Chappatte says there is potential for E-Commerce to grow in the country. Speaking at the E-Power forum, Mr. Chappatte said that the low number of online sellers is what is stalling the growth of E-Commerce in the country.

“Kenyans are willing to buy online but the only challenge is that there are not enough sellers who have their products on E-Commerce websites. We (E-Commerce sellers) need to co-create and get our products online so that we can serve these customers,” Mr. Chappatte noted.

Mr. Chappatte further encouraged Kenyan entrepreneurs and manufacturers to put their products online and reach a larger scope of customers. With Jumia’s plans of opening hubs outside Nairobi where SMEs can sell their product, entrepreneurs from all around the country can now venture into E-Commerce.

Furthermore, putting products online is cheaper than actually setting up a physical shop. There is a lot of capital put in setting up a shop for your products but with E-Commerce, all you need is a warehouse to store your products.

Kenya is still growing in E-Commerce but there is a promise for improvement in the future. An entrepreneur or manufacturer who has just started selling online today will have tremendous experience by the time E-Commerce will be hot in the country.

Developed countries like China and the US have a 20% E-Commerce penetration meaning that percentage of purchases are done online. With Kenya still at 1%, there is much room to learn for those entrepreneurs who will be venturing in E-Commerce today.

E-Commerce websites are also providing deals and discounts while the market is still growing. These deals are likely to reduce once E-Commerce becomes a more significant player in the market.

Jumia, for instance, takes a minimum of a 5% commission on every sale of your product made on their site. However, if your product is locally manufactured then Jumia will scrape off 50% of the commission.

Most local manufacturers have been lamenting that they hardly come by customers willing to purchase their products. E-Commerce might just be their long-lasting solution. Once it has established itself, E-Commerce might be the long-awaited end to the ‘Buy Kenya Build Kenya Campaign’.

Do you have a product to sell? Try selling it online.

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Kevin Namunwa
Kevin Namunwahttp://www.businesstoday.co.ke
Kevin Namunwa is a senior reporter for Business Today. Email at [email protected].
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