Electronic commerce in Kenya is opening up, following success of group-buying sites, offering discounts and exposure for small businesses.
The establishment and growth of group-buying sites has been a challenge in Kenya, which lacks both thriving e-commerce and a credit-card culture. Most transactions are completed with cash, and most recently through mobile payment gateways.
Rupu.co.ke, set up last December, was the first group-buying site and, although availability of affordable connectivity has allowed more people online, it was hard for businesses and individuals to trust that the item or service would be delivered after payment. Business owners had a hard time believing that a site that allowed them free listings could be above-board.
"Questions ranged from 'how sure am I that I'm to receive a voucher once I pay?' to 'are you guys professional scam artists?' This was the same for [all] the businesses we approached," said Munyutu Waigi, Rupu.co.ke founder. "It is free to be featured on Rupu and many businesses believed there had to be a catch. This was a challenge."
The discount model of Rupu resonated with the market, given that buyers like to bargain and the 50 percent discount was attractive. Currently, there are two other daily deals sites, Mocality and Zetu deals, and a daily deal aggregator, Zambudeals.com.
For Waigi, trust has been tough to cultivate, although he received a lot of support from smaller businesses that did not have physical shops and viewed the opportunity as free marketing and a way to get more people to use the products.
"By consistently providing excellent customer service and delivering value to the merchants, our buyers now come from as far as Europe and [the] U.S.A.," added Waigi.
Availability of a reliable mobile payment gateway through mobile service providers, credit cards and Pesapal, one of the growing online payment gateways, has allowed Rupu to receive payments and provide refunds, which has allowed more buyers and businesses to get on board.
With the prospect of business growth, Zambu entered the market in September, aggregating daily deals from Mocality, Zetu and Rupu, and the aggregator is optimistic the market will grow to hundreds of deals a day.
"Zambu is currently aggregating deals in Kenya, Ireland, New Zealand and the U.K., and we are making interesting numbers in each of these markets," said Tomas Netusil, CEO of Zambudeals.com. "In Kenya, we have tens of newsletter subscribers and hundreds of followers on Twitter; this means the Kenyan market is beginning its journey."
While the number of people buying deals online is lower than in other places, some companies find that approach is good for business growth.
"I have met more than a hundred customers since I listed on Rupu.co.ke earlier this year; my business has grown and I still get business referrals even after the deal closes," said Ombaye Getui, CEO of Simply Delightful, a bakery based in Karen, a residential area.
While the market may seem like it has been cracked in terms of online spending and trust, Waigi and Netusil say that it will only improve as more customers begin using buying sites and businesses come online as well.