While e-commerce needs internet access and payment services to work, it has to be facilitated by physical logistics, addressing system, customs duties/ taxes and cybersecurity, in Kenya the problems seem to be even worse.
In 2012, the e-commerce sector in Kenya was estimated to be worth $50 million even though Kenya had relativelygood internet connectivity compared to most sub-saharan countries, a high take-up of mobile payments services, a rapid growth in the number of payment cards.
In comparison, South Africa’s e-commerce sector in 2012 was worth $624 million while Egypt’s was worth $200 million. According to a survey by Kenya’s Communications Authority (CAK), the lack of reliable, low cost delivery services and services to enable consumers to return unwanted or defective items; the lack of a national addressing system, the high import duty-almost 50% of the value of items imported and the the lack of a cybersecurity system to allow merchants verify the identity of customers and the general lack of trust are a hinderence to e-commerce in Kenya.
Richard Tanui, Manager, Competition and Tarrif Analysis at the Communication Authority of Kenya speaking today at the ICT Week said, “The Cybersecurity-National infrustructure has been put in place. The National addressing system is being developed led by the ministry of ICT nad a pilot project has been undertaken covering Nairobi. It will be rolled out begining from Nairobi then to ther towns then countrywide. CAK through the ministry of ICT will be engaging the government on customs and taxes for low-valued e-commerce items. CAK also holds postal and cuourier stakeholders forum to share emerging issues.”
By being aware of such intermittent problems facing e-commerce uptake in Kenya, the government seems to be on the right track to finally solving the national addressing problem, which has been talked about for long. The problem is not just timelines, with every new parastatal leadership comes new objectives, and the body might not be able to make everything happen overnight, hence opening room for the private sector and startups.
OkHI, a startup recently founded in Kenya wants to solve Kenya’s addressing problem by enabling creation and secure sharing of physical addresses via your mobile phone. Timbo Drayson the founder was inspired to build okHI after someone gave him directions he couldnt even follow.
The ex-Googler says on his site, “I once asked for directions and was told: take the second right after where the goats used to graze. The craziest thing was that the lady I asked actually knew where that was!”
A public-private partnership might be the right way to solve the national addressing problem in Kenya, and so are issues to do with traffic jams and logistics.
Though Kenya now has 21.6 million internet users mostly coming online mostly via mobile phones and tablets firms like Jumia, Hellofood will take long to double up their orders due to poor logistics services and an non-existent national adressing system.