For a small business owner in a town far from Nairobi,
restocking a shop can mean closing for the day, travelling to the city,
searching for affordable goods and returning home hoping the trip was worth the
time and money.
Vinod Goel, who oversees Jumia’s operations in Kenya and
Uganda, believes technology can change that equation.
For Goel, e-commerce is not merely about buying products on a
phone. It is about changing how goods reach consumers, how small businesses
find customers and how people in remote areas access products that may be
expensive or difficult to find in their local shops.
Bringing the shop to the customer
Traditionally, buying a product has required a customer to
travel to a shop. Digital payments have changed how money moves, but they have
not necessarily eliminated the journey to the marketplace.
E-commerce reverses that arrangement, allowing customers to
order products electronically and have them delivered or collected at
designated locations.
Goel argues that this model reduces costs by cutting some of
the intermediaries involved in traditional distribution.
In conventional retail, he explains, goods may pass through
several distributors and wholesalers before reaching a shop. Each stage can add
costs.
Online platforms, he says, can shorten that chain by
connecting suppliers, sellers and consumers more directly.
The attraction is not limited to price. Online platforms can
also offer a wider selection than a physical shop with limited shelf space.
For a customer outside Nairobi, this could mean accessing
products that are not readily available in nearby shops without making a costly
journey to a larger town.
Yet the promise of convenience and lower prices does not
automatically translate into access. Customers still need reliable delivery
services, information about the platform and confidence that the products they
order will arrive as expected.
The challenge of reaching rural customers
Goel describes the last leg of delivery as one of the
practical difficulties facing online retailers. The economics of such
deliveries can be challenging when individual orders are scattered across
distant communities.
Jumia’s response has been to establish
collection points closer to customers. He says the company had built about 300
pick-up stations at the time of the interview, with plans to increase the
number to at least 800 that year and potentially 2,000 the following year
The idea is to place collection points in towns that people
from surrounding villages already visit for work, shopping or other activities.
Rather than requiring a delivery vehicle to reach every
customer’s doorstep, parcels can be transported to these locations for
collection.
Customers are notified through text messages, email and the
company’s app when their orders arrive.
Goel says the company intends to expand the network as it
seeks to reach more customers beyond major urban centres.
For the thousands of businesses selling through online
platforms, the opportunity extends beyond reaching individual shoppers. He
argues that the platform gives small enterprises access to a wider market while
providing services that would otherwise be expensive for an individual business
to establish, including customer access and logistics.
“You just need your product,” Goel says of the opportunity to
begin selling through the platform.
However, he cautions that operating online is not a shortcut
to business success.
Sellers must maintain product quality, price their goods
competitively and fulfil orders promptly. Customers who receive inferior
products or experience delays can choose to shop elsewhere, while returns can
eat into a seller’s earnings.
Goel describes the discipline required as demanding,
particularly for traders accustomed to selling through traditional retail
channels.
Jobs, skills and the next generation of
entrepreneurs
Goel notes that former Jumia employees have gone on to hold
leadership positions in Kenyan start-ups, arguing that experience in e-commerce
can help build entrepreneurial capacity.
The company has also developed JForce, a commission-based
programme through which individuals help customers place orders.
The model is intended to serve people who may not have
smartphones, reliable internet access or the confidence to navigate online
shopping independently. A JForce agent can help such customers select products
and place orders, earning a commission when business is completed.
Goel says the programme has attracted participants from
different backgrounds, including students and people who use their social
networks to find customers.
For all the opportunities associated with online shopping, one
obstacle remains particularly difficult to overcome: fraud.
Consumers who have lost money to fake websites, misleading
sellers or undelivered orders may be reluctant to transact online again.
Goel acknowledges that scams damage confidence in the wider
e-commerce sector, including established platforms whose names can be imitated
by fraudulent operators.
He says Jumia monitors websites that resemble its own and
works to have fraudulent pages taken down, either directly or through the
relevant authorities.
He also urges consumers to exercise caution when shopping
online. The company recommends using its official app, which Goel describes as
safer than accessing the service through a web browser.
Goel argues that stronger safeguards are needed to protect
online shoppers, alongside clearer rules for businesses operating in the
sector.
Kenya’s e-commerce market also faces questions about taxation,
consumer protection and the treatment of businesses operating locally compared
with those shipping goods from abroad.
Goel argues that policymakers should consider the economic
value retained in Kenya when regulating online commerce.
He contrasts businesses with local operations, which he says
contribute through employment, taxes and other economic activity, with overseas
sellers that can supply Kenyan customers without maintaining the same physical
presence in the country.
He offers figures to illustrate the difference, estimating
that a sale worth Ksh.1,000 through an overseas operator may leave Ksh.100 in
the Kenyan economy, compared with Ksh.700 for a locally established operator.
His broader argument is that policy should account for the
different ways online businesses contribute to the domestic economy, while
ensuring that consumers benefit from competition and affordable products.
According to Goel, efforts were under way to work with
umbrella business organisations to help establish an e-commerce association
that could represent the sector and contribute to policy discussions.
Such an organisation could provide a forum for addressing
shared concerns, although its effectiveness would depend on the interests
represented and the practical measures it helps advance.
A market still finding its feet
Despite the challenges, Goel believes Kenya has significant
room for e-commerce to grow.
He points to the combination of digital payments, mobile
connectivity and the difficulty many consumers face accessing a broad range of
goods locally.
Goel’s ambition is for customers to be able to order products
locally without travelling abroad or relying on informal intermediaries whose
reliability they cannot establish.
That future, however, depends on the sector’s ability to
address the problems that still discourage consumers from shopping online.
