OPINION: To lead in e-Commerce, Kenya must get policy right

Kenya’s next digital growth story will be determined as much by policy as by technology.

The country has built one of Africa’s strongest digital foundations, with a population of 57 million, internet penetration of 48%, more than 42 million smartphones in use, and 45 million mobile money subscriptions. E-commerce is growing at an estimated 16–18% annually, supported by a young, connected and increasingly digital population. 

Yet despite these advantages, e-commerce still accounts for only 2–5% of retail sales, far below mature markets such as China and the United States. The opportunity ahead is therefore immense, but only if policy enables growth rather than unintentionally constrains it. 

This matters because digital commerce is no longer simply about online shopping. It is becoming a powerful engine for economic inclusion, SME growth and market formalisation.

Nearly 70% of Kenyans live in rural areas, and digital marketplaces are increasingly connecting these communities to products, services and economic opportunities previously beyond their reach. Orders from secondary cities and rural regions now account for 60% of Jumia’s total orders, highlighting how rapidly digital participation is expanding across the country. 

Digital commerce is also helping small businesses grow. SMEs now account for 60% of sellers on Jumia’s platform, up from 40%, while the broader ecosystem supports more than 80,000 livelihoods. These are clear examples of how digital platforms help entrepreneurs access wider markets, formalise their operations and participate more fully in the economy.

To unlock this potential, policymakers should focus on five priorities.

First, Kenya needs a clear and modern regulatory framework for digital marketplaces. Platforms facilitate transactions, logistics and payments between independent buyers and sellers, and regulation should reflect this reality. 

Second, policy should encourage formalisation. Digital platforms help bring SMEs into the formal economy, broaden the tax base and improve compliance. Regulations should support this transition rather than create incentives for businesses to move to informal channels. 

Third, Kenya must create a level playing field between local and foreign operators. Businesses that invest locally, create jobs and comply with local obligations should not compete at a disadvantage against entities with limited local presence or accountability. 

Fourth, continued investment in digital infrastructure and logistics remains essential. Connectivity alone is not enough. Efficient delivery networks, reliable payment systems and affordable digital access will determine how quickly the benefits of e-commerce spread beyond major cities. 

Finally, government and industry should institutionalise regular consultation on digital economy policies. Technology evolves faster than legislation, making ongoing public-private dialogue essential to effective regulation. 

These recommendations are not about supporting one company or one sector. They are about ensuring Kenya captures the full economic value of its digital transformation.

Across Africa, countries are competing aggressively for technology investment, innovation capital and digital talent. Investors increasingly favour markets that combine strong infrastructure with regulatory certainty and policy predictability.

Kenya already has the connectivity, entrepreneurial culture and consumer demand needed to lead. The risk is not that the digital economy will stop growing. The risk is that it will grow below its potential because policy fails to keep pace with innovation.

Every barrier to formalisation, every layer of regulatory uncertainty and every policy that discourages investment carries a cost, in jobs, inclusion and economic growth.

Kenya has already demonstrated what is possible when innovation is matched by enabling regulation. Mobile money became a global success story not simply because demand existed, but because policy created the space for innovation to flourish. E-commerce now stands at a similar crossroads. With millions of consumers coming online, thousands of SMEs seeking wider markets, and investment flowing into digital infrastructure, the opportunity is clear. The question is whether policy will accelerate this momentum or slow it.

If Kenya gets this right, it can become Africa’s leading digital commerce economy. If it does not, investment, innovation and growth will simply flow to markets offering greater certainty. The time to make those choices is now.

 The writer, Vinod Goel, is the Regional CEO, Jumia East Africa