Growth in online business only silver lining in the Covid clouds

An upsurge in e-commerce may well be the only silver lining in the dark clouds Covid-19 has kept over the Kenyan economy even as the second round of infections now threatens to dampen the festive season.

The Communication Authority of Kenya is already estimating the sector to be worth just over Sh4 billion as many more people troop to online platforms to shop during the pandemic that created a ‘social distance’ with cash and reduced physical interactions to cut spread of the virus.

For an industry that the official data had just projected to be under 40 percent in penetration by 2017, electronic payments and online shopping are set to surge as coronavirus introduces a new normal in the market.

Online groceries, a previously niche sector, made headway in new ground as people staying at home created an increased demand for daily essentials and tech-savvy entrepreneurs swung into action.

Metropolitan areas

“Covid-19 brought an unexpected awareness about the necessity of online businesses,” says Mr Samuel Baraza, founder of Kitengela-based Cubersie Market. 

Initially a crowdfunding platform, Cuberise was meant to financially support young and budding entrepreneurs actualise their business dreams.

But when Covid-19 struck, even with the funds, these micro-entrepreneurs still found it hard accessing the market for their products/services. This motivated Mr Baraza to transition from crowdfunding to e-commerce to help farmers market their fresh produce.

Besides expanding market access for farmers mainly within the metropolitan areas, the platform also serves established small and medium enterprises and provides a solution to Kenyans worried about the typically crowded open-air markets perceived to be of great-risk in spreading Covid-19.

Mr Baraza, who also runs a free delivery bit of the platform says the convenience has hooked many sellers into the business.

“Selling is a lifelong business process compared to seasonal crowdfunding. After setting up the businesses, we realised that entrepreneurs still needed a market for sustainability. We even found it more compelling to shift to e-commerce since most customers avoided physical shopping due to the pandemic,” Mr Baraza said.

Unexpected rise in orders

He mainly targets micro and small startups with no physical shops. Subscribers need to list their products on the Cuberise website at no cost. They also enjoy free consultations, especially for the underperforming fresh farm products. 

“We save our customers the cost of buying website hosting and domains,” Mr Baraza notes. There is, however, sharing of profit at 10 percent commission or less for low margin products.

During the peak of the Covid-19 infection rate, Cuberise could receive more than 1,000 orders per month for farm produce.

Orders which are placed a day earlier have surged as the virus wave peaked and containment measures became more stringent.

Mr Baraza says the platform is currently modifying its model to make it cheaper and even more user-friendly for farmers to sign up to meet the unexpected rise in orders.

It is also tweaking it to incorporate service providers such as tutors, electricians, mechanics, fitness trainers, chefs, house helps, and plumbers.

Big opportunity

For 34-year-old Nasha Moinket the platform has enabled her reach to customers almost threefold.

“When businesses started going online, I was worried how I’ll integrate my groceries into the digital market. Cuberise, however, brought a sigh of hope. It has offered a seamless opportunity at a low cost since the pandemic began,” she says.

Although the industry is already dominated by other giant players such as Jumia and Amazon, Mr Baraza believes it is not a hindrance to other upcoming e-eommerce platforms.

“I believe there is still a big opportunity to exploit especially for fast-moving consumer goods (FMCG). I don’t see dominant platforms as a threat since every e-eommerce has its own clientele range. An online customer is not loyal to a brand but to the price. We, therefore, try to make our price competitive, affordable and hassle-free,” he said.

Grocery shoppers are increasingly picky online, and others remain very skeptical about what they see online but the entrepreneur is optimistic that after the pandemic, the industry is still likely to emerge stronger. The trick is how to keep