Kenya’s e-commerce sector projected to generate Ksh.28 billion by 2027 - report
Kenya’s e-commerce penetration is projected to grow to 53.6
per cent by 2025, according to a new report by the Competition Authority of Kenya (CAK).
The Online Food and Groceries Delivery Platforms Market
Study released Thursday says revenue generated from the sector is expected
to grow annually at a 19.15 per cent rate to reach a market volume of $208.2
million (Ksh.28 billion) by 2027.
This is in contrast to 2020 when the country’s e-commerce
penetration, including online food and groceries shopping, was estimated to be
at 40.3 per cent.
At the time, it was estimated that 9.3 per cent of Kenyans were
shopping for food and groceries online as of 2023, which is now projected to
rise to 16.7 per cent by 2027, which translates to 10.5 million consumers.
CAK attributed the rapid growth in online food and grocery
shopping in Kenya to the increased need for convenience and proficient delivery
services.
“Businesses and industry regulation including competition
law and policy enforcers, need to be adequately prepared and have an in-depth
understanding of not only potential competition concerns in these markets but
also consumer protection issues that may arise in online shopping platforms
including, online food and groceries markets which are multi-sided,” the competition
watchdog said.
The online food and grocery market in Kenya saw an upsurge with
the onset of the COVID-19 pandemic in 2020 as consumers avoided social places
as part of regulations to stop the spread of the coronavirus.
Other arrangements such as remote working saw many middle-class
Kenyans opt for online deliveries, which in turn incentivized food and grocery
retailers including restaurants and supermarkets to partner with delivery
platforms, payment and courier service providers.
CAK further attributes the surge in home and office delivery
to the convenience and safety that came with the model.
Some of the popular players in the local e-commerce and food
delivery scene are Jumia, Glovo, Uber Eats and Yum Deliveries as well as restaurants
and retail chains like Carrefour who have independently incorporated e-commerce
into their shopping experience.
While Kenya does not have explicit regulations governing
e-commerce, there have been several legislative changes in the recent past
including the Data Protection Act, of 2019 and the Copyright Amendment Act, of
2019.
The CAK report however notes significant information and regulatory gaps on how digital platforms operate along the e-commerce value chain.
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