The 2018 United Nations Conference on the Trade and Development (UNCTAD) Business-to-Consumer E-commerce Index ranked Kenya in 7th position in ecommerce uptake in Africa and position 85th globally. Leading the Africa pack is Mauritius, Nigeria, South Africa, Tunisia, Morocco and Ghana respectively. Globally, Netherlands took the lead having improved from a being placed 4th on the same in 2017. While Africa needs to boost Internet penetration to grow e-commerce, it also needs to get more of her existing Internet users to trust the online market for making purchases, secure servers, bank accounts, a clearly marked and mapped address system.
The UNCTAD report further estimates that that the B2C e-commerce market in Africa is worth about $ 5.7 billion in 2017, which corresponds to less than 0.5% of GDP, far below the global average of over 4%. However, the uptake of eCommerce in Africa has seen online shoppers surge at an annual rate of 18% which is way above the global rate of 12%. There is no doubt that e commerce is fast emerging as a new frontier in Africa and in the global market. As eCommerce continues to grow, retailers need to expand their distribution networks, build more fulfillment centers, and leverage more on 3PL partners. At the same time, online retailers must place greater focus on conveniently locating their fulfillment centers close to their markets to facilitate faster deliveries.
Reliable and solid logistics and supply chain interventions are the heart of successful ecommerce. This will ensure that the sector thrives and sufficiently satisfies customer demands for availability of goods purchased, timely deliveries and safe and secure deliveries exempt from breakages, bends or losses as well as favorable return policies. In Kenya, ecommerce players heavily rely on third parties who provide storage and shipping services. These services can build or break the customer experience as they make their purchases online. Meshack Kipturgo, Siginon Group’s Managing Director states, “The eCommerce sector is a new frontier in business that calls for close synergies between the ecommerce players and back end logistics to ensure a positive customer experience from that first click to eventual delivery.”
Logistics players play a critical role in supporting the ecommerce process by shipping, managing stock levels as well as making final deliveries to end destinations. The inventory must therefore be secure, and the services offered must be efficiently and safely delivered yet offer best value for money to ensure the customer appreciates the value of goods bought. Meshack adds, “A solid and long-term partnership between logistics players and ecommerce partnerships will ensure growth and expansion for both parties at the end of it all, the e-customer emerges the winner.”
Several systems have been adopted to integrate ecommerce retailers and logistics entities to allow for a seamless process. Today, warehouse management systems have been adopted that enable inventory owners to view their stocks on demand. For ecommerce players, these systems allow them to view available stocks, guide re order decisions as well as ease the stock taking process. Logistics players are also able to receive online instructions of goods that need to be stocked out as well as received and report them same via bar code systems and other stock movement detectors. It is also an industry best practice to provide the tracking numbers to customers in their confirmation email so they can keep track of where their package is.
Amazon, the global ecommerce giant, has evolved over time since its inception to have one of the most advanced fulfillment networks in the world. The Amazon fulfillment centers provide storage as well as the subsequent logistics of picking, packing, shipping, and providing customer service for the various products. Meshack concludes; “The opportunities for ecommerce retailers are growing steadily particularly with younger shoppers who are more tech and internet savvy. Logistics companies have also positioned themselves to tap into the opportunities that come with ecommerce to satisfy the needs of the ecommerce customer”. Ecommerce in Kenya presents a new frontier in doing business and will no doubt open more opportunities for trade in Kenya. More and more logistics companies must adopt technology to facilitate their processes to facilitate the demands of this new market.