E-commerce continues to thrive across the world with platforms such as Amazon, Alibaba ,eBAY and others transacting billions of dollars. Locally, the subsector has been thriving with platforms such as Olx becoming immensely popular. Jumia, one of the local players in this segment is currently the third most trafficked website in Kenya pointing at an emerging trend.
The recent edition of #WHATSNEXT organized by venture fund Nest tackled the state of Retail and E-Commerce in Kenya. Among the panelists of the event was Thiaragajan Ramamurthy (TRM), the operations director for Kenya’s largest retailer Nakumatt. Ramamurthy hinted that the retailer was looking to e-commerce with plans to launch an online store in October 2016. Nakumatt is already putting in place the necessary infrastructure regarding payments and logistics in readiness for this milestone. Some of Nakumatt stores get as many as 10,000 walk-ins daily making this development timely.
The Nakumatt Global card has allowed the firm learn customer behavior and will serve as the first key enabler for the e-Commerce store as far as payments are concerned. According to TRM, 25% of transactions taking place at Nakumatt are through cards. “Nakumatt customers often withdraw cash from the ATM and then continue to shop at their store while they could easily make these payments via card”, he added. TRM said the retailer pays banks 1.8% on behalf of customers for their transactions and was looking to have more customers use non-cash payment modes. With regards to logistics, Techweez has learned that Nakumatt has been offering delivery of goods to shoppers from their retail store in Nanyuki. Ideally, the customers make their purchases, Nakumatt bundles them based on their locations and then makes deliveries for all customers in a given location. Once launched, this would definitely be a big boon for the retailer as it allows them to deal with the delivery problem e-commerce entrants face in Kenya.
Still on payments, TRM said their customers prefer M-Pesa over a credit card with security being the biggest issue for them. Banks being the main custodians of cards haven’t fronted cards enough as possible channels of payments. TRM notes that Nakumatt Global card is unique in that they reward customers even for spending outside Nakumatt. They encourage it more and give half a point (loyalty) on transactions outside the store.
Nakumatt is not the first retailer to consider such a direction with Tuskys Supermarket having stated last year plans to launch an online store in Q2 2016. Not much has been heard since despite the retailer having looped in Safaricom to power payments for the services with Wells Fargo involved in the delivery of goods.
