Kenya’s ecommerce sector has been growing steadily in recent years with the entry of local and international platforms. Last year saw the launch of online marketplace KiliMall, founded by Chinese national Yang Tao, who moved to Kenya four years ago. The company claims to have 200,000 customers.
According to Tao, he was motivated to start the platform to address the high cost of imported products.
“In the traditional ways of trading there are many middlemen in the supply chain, and the margin increases each time the product switches hands. This makes the price in Kenya almost three times more expensive than in developed economies. I think that technology and internet can change this and reduce the costs,” says Tao.
KiliMall currently has a network of 500 merchants who sell their products via the platform. Some of them, Tao explains, also have physical outlets, while others are small traders operating from their homes. KiliMall offers its merchants free warehousing in the capital Nairobi, from where sold goods are transported by the firm’s fleet of motorcycles and vehicles.
“Our value proposition to merchants is cost savings and access to a wider market. They don’t have to pay goodwill, rent, electricity and warehousing.
“For our customers we offer reduced prices [and] a wide variety of products, which is important because most physical shops can hold only limited stock. And we have a strong quality assurance team to make sure each product delivered to the customer is in good condition and authentic. We ensure our merchants are not selling counterfeit goods,” explains Tao.
The number of Kenyans selling and buying online is on the rise due greater access to the internet; the availability of companies handling logistics; and a wide variety of payment options. According to statistics from the Communications Authority of Kenya, the country now has more than 18 million internet subscriptions.
Opportunities in smaller cities
Outside of Nairobi, KiliMall sees opportunity in secondary cities and towns that are often ignored by e-commerce companies. The firm recently entered a partnership with the Postal Corporation of Kenya enabling customers of KiliMall to collect goods and place orders at over 600 post offices countrywide.
“Currently Nairobi is the biggest market for most e-commerce platforms here but other cities and towns around the country are also growing. This morning I was at the warehouse and I saw packages prepared to be sent outside of Nairobi. This is important because outside of Nairobi people don’t have many options. We want people outside of Nairobi to share the same shopping experience as Nairobians,” says Tao.
In addition to larger secondary cities such Mombasa and Kisumu, Tao says KiliMall is finding traction in the southwestern town of Kisii and in Nyeri, located in the central region.
“People in these towns are beginning to be curious about ecommerce. They are sceptical about paying money in advance, but I find Kenyans to be open to new things, even a bit adventurous.”