E commerce has the potential to bring boost rural regions through employment opportunities and easy access to a variety of products, Jumia now says.
In its latest report dubbed ‘E-Commerce in Rural Areas’, the online shop says digital marketplaces could create close to five million jobs by 2025 on successful expansion to the rural areas.
“More than 72 per cent of Kenya’s population lives outside the main cities, and access to a supermarket is challenging in such areas. This presents an opportunity for e-commerce to grow and meet the rising demand in these areas,” said Charles Ballard, CEO of Jumia Kenya.
He said currently, only 23 per cent of online shopping orders from their platform goes to the rural areas despite the large market opportunity.
Nairobi and Mombasa account for 62 per cent while other major town take up 15 per cent of the orders.
“Choices for products in rural areas are currently extremely limited for consumers, and infrastructure is particularly constrained,” the report reads in part.
Nevertheless, Ballard added that their strive to develop further in peri-urban and rural areas, points towards driving the country’s economic growth and improving lives through the internet, echoing government’s digital transformation drive.
Recently, the government announced its plan to start the process of introducing digital ID in a bid to boost e-commerce and curb online fraud.
The cabinet secretary, Ministry of Information, Communication and the Digital Economy, Eliud Owalo said lack of a digital ID has stifled the expansion of e-commerce activities in the country.
“The activities mostly depend on digital trust to process transactions,” Owalo said.
He noted that the success of e-commerce depends on digital trust, built through verification and authentication processes, especially during merchant and customer registrations and payments, as well as through rating systems.
“A strong digital trust generates a sense of security in a transaction, key to any e-commerce activity,” he added.
Data by Statista, a global data firm, shows e-commerce use in Kenya is above the regional average, with revenues expected to grow annually by 16.4 per cent by 2025, to hit $1.1 billion (Sh153.5 billion).
A report by Visa for the Sub Saharan Africa (SSA), ranks Kenya third in total volume of e-commerce in 2019 and 2020.
South Africa was first while Nigeria came second.
According to the report, e-commerce sales are projected to grow to $7 trillion (Sh976.1 trillion) across the globe by 2024.
This is projected to create job opportunities for the many unemployed youths, specifically in the country.
According to Raphael Obonyo, the director and co-founder of The Youth Congress, the youth, who form about 80 per cent of the country’s population, are the worst hit by unemployment.
“Out of every 10 unemployed Kenyans, seven are young people aged 35 and below, Obonyo said.
With the localisation drive, The Jumia report further highlights Eldoret, Nakuru, Kakamega, Kitale and Kisumu regions as the most promising areas for online shopping.
It cited beauty, home furniture, phones, and TV as the leading categories currently demanded by rural customers in Kenya.