Boom of social commerce: How Kenyan traders are beating competitors and algorithms to make money

From crowded markets and bustling streets at the city centre, the marketplace has moved online, with Small and Medium Enterprises (SMEs) setting shop on social media platforms including Instagram, Facebook, X and TikTok.

These traders have given those with physical shops a run for their money. New entrants in the e-commerce space have disrupted pricing and service delivery for legacy retailers.

A walk on the streets of Shanghai, China, gives a perspective of the strategy mix in today’s marketplace, where technology is crucial in linking buyers to sellers and vice versa. Inside a fully stocked high-end shoe store, a ring light, music and a rotating photo booth are used by a special team that is live on social media, selling products and giving a view of the store.

One big marketplace

Back in Kenya, David Wanyoike, the owner of Elecmert Solutions is reaching his customers online. He has over 3,000 followers on X – the platform making majority of sales for him.

Wanyoike sells home and office electronic devices including TVs, laptops, speakers, and personal accessories including phones, earphones and portable speakers.

He is among businesspeople who have set up social commerce strategies to support their physical stores. This involves dedicating plenty of time to shoot social media content to notify clients of sales, and new products.

“People who walk into the shop to buy have reduced. While 10% walk in randomly, the other 90% come through social media and on referrals from friends and previous clients,” he says.

“I work with friends who have a huge following, they post and tag me.”

Having operated the business for 8 years, Wanyoike has established contacts with boda boda and taxi persons who deliver items once a purchase request is made. Delivery costs range from Ksh.200 – Ksh.1000.

Unlike Wanyoike, Jane Mwende who has been in business for six years operates a purely online shop. To sell home decor products, she has established a huge social media presence, with more than 40,000 followers on Instagram and Facebook. Her TikTok following is also growing rapidly, but she witnesses slow growth on X.

Mwende’s products are well stocked in her house, and only leave when being delivered to a client who has made a request online or through a call.  

Once a customer makes an order, Mwende hands over the product to a matatu driver, who takes it to Nairobi CBD. A boda boda operator then picks it and takes it to a stall within the CBD, which is shared by Mwende and over 10 other independent sellers.

“I pay Ksh.2000 monthly for a shelf in the stall. Once the product is there, the stall operators will hand it over to the customer and confirm payment,” she explains her business model.

The mother of two ventured into the online business after leaving an administrative job.

Mwende’s strategy is a mix of creativity in shooting videos and photos and using tools such as Meta Campaign Planner and Metricool to schedule her posts.

She also uses AI tools to generate creative ideas for filming and writing captions. This is an all-day task she does on Sundays.

While business people lay traps for potential customers online, buyers are also in constant pursuit of the best deals. The strenuous task of having to walk from one retailer to another in search of a good price has now been made easy through technology.

At the comfort of her couch, Mary Atieno searches for an item online. Among the recommendations is not only products from giant e-commerce platforms such as Jumia but also those from small businesses that command influence on X, Facebook and Instagram.

“Before I even think of walking to a store in town to buy an item, I search for it online. This way, I get to see varieties of the products available in the market and their price ranges. This way I can make an informed decision to buy or not,” says Atieno.

She also shares that at times she searches for items online, even though she is not ready to buy them. This helps with budgeting.

“Some stores have a ‘lipa polepole’ option that enables me to pay for an item in instalments that do not affect my other bills.”

The social-commerce matrix

An August 2024 decision by Türkiye’s Information and Communication Technologies Authority (BTK) to restrict access to Instagram raised serious concerns that the directive would cripple e-commerce in the country.

Emre Ekmekci, Vice President of the Electronic Commerce Operators Association (ETID) noted that nearly 10 per cent of e-commerce activities take place on Instagram, therefore, restricting the platform would lead to a $57.4 million loss daily.

This underscores the impact of social commerce on economies beyond Kenya.

To hack the social-commerce matrix, learning institutions such as South East Technological University (SETU) in Ireland have begun offering courses on the social media business.

Considering becoming a social media influencer is now a popular career path among Gen-Z youth, the university introduced a four-year-long bachelor's degree in "Content Creation and Social Media".

As the market changes, businesspeople are also adopting new ways to stay afloat on social media platforms, which are turning towards more commercialisation of content.  

Mwende notes that social media platforms have changed, and creators running businesses are not benefiting from organic visibility.

“When you look at your account statistics, you realise the traffic is much lower as compared to the number of followers you have,” she says.

She recalls that when she started the online business, it was easy for a post on Instagram and Facebook to gain visibility from her followers and other users. 

However, she notes the changes on the Facebook and Instagram platforms today, where commercial pages with a high number of followers do not enjoy the luxury of visibility. Platform algorithms tend to favour those that use Meta business features and those that bid payment to promote their posts.

She now sponsors her posts to reach more prospective customers. In order to beat the algorithms, she also employs strategies such as selecting the best time to sponsor a post, and also interacts with followers to keep her feed active.

“The more you sponsor posts, the more you will sell. You have to consider the best times and dates for sponsoring a post. You are likely to benefit if you do it at the end or beginning of the month as that is when most people buy items.”

On the other hand, Wanyoike is not open to sponsoring his content as he believes he would not get a good return on investment.

“I have not spent on advertising lately. I used to pay for Google ads, but stopped once I realised I was not getting a good return on investment,” Wanyoike says, adding that he has not considered upgrading his X account to premium.

What’s at stake in social commerce?

Just like a retail shop is prone to risks such as theft or damage of property, online businesses are also faced with issues such as fraud and a lack of satisfaction by customers.

Atieno recalls buying a make-up stand she spotted online, which did not meet her expectations.

“In the picture, I saw on Instagram, the product looked wooden, and would fit my make-up and other self-care products. However, I was disappointed after purchasing it, as I found out it was made of light plastic and could not sustain the weight of my products. It ended up breaking just 2 weeks after purchase,” says Atieno, who has not purchased anything from the online shop since then.

To curb this and maintain trust, Wanyoike says “Before someone buys, we try to share full information on the product, its description and specific features.”

Retailers, on the other hand, say they face multiple incidences of fraud, where customers fail to pay once the products are delivered.

“I have been conned. There are clients who ask for products to be dropped at their homes or offices and do not pay.” Mwende testifies.

To address these risks, they apply a mix of ‘pay before delivery’ and ‘pay after delivery’ model depending on the client and the value of product.

“Once I send a delivery person, they have to ensure I am paid before they leave the location. Through experience, I can easily tell a con and genuine buyer. I can spot a con even from how he texts and talks,” Wanyoike says.

He notes that the Kenyan market is also experiencing unfair competition due to counterfeit products that are sold at a cheaper price.

“There is too much competition, you find some people selling their products in prices that are not logical. There are clients who have opted for the cheap options, but would later report that they were duped into buying counterfeit products,” he remarks.

The retailers have also put in place refund policies to handle client dissatisfaction.

When an item is damaged during transit, they take it upon themselves to settle the damage costs.