Lower costs of data will boost e-commerce in Kenya

Speaking at The National Forum on sustainable Data for Development held at the Laico Regency hotel in Nairobi this August, deputy president William Ruto asked mobile firms to reduce the cost of data bundles, he noted that while the cost of mobile phones has gone down, the cost of data has increased.

There is no doubt that the implementation of lower costs of data is welcome to the 99 percent of Kenyans browsing the internet via smartphones according to Communications Authority of Kenya Q3 2014/2015 statistics report but more-so it will turbo boost e-commerce growth in the country.

In 2014, Jumia Kenya increased sales by 900% after being in business for only a year. This success was to a large extent attributed to the Jumia mobile shopping applications that allows customers to browse, add items to cart and make payments from their smartphones which is among the company’s major strategy in the e-commerce take-over.

Jumia is however not the only e-commerce company banking on mobile shopping applications, others include OLX, Kaymu- online marketplace, Jovago- hotel booking site, Hellofood- a portal where you order food online, Lamudi- Property listing andEasy Taxi- online taxi requests portal among others.

According to Parinaz Firozi, MD, Jumia Kenya, “customers who use their mobile phones visit the site triple as often as those who use desktops and laptops”, however Firozi notes that “high cost of mobile data discourages would be customers from surfing the internet on mobile and making purchases.”

“While Ksh. 30 assures you of 1 hour of unlimited internet in a cyber café where the cost is 50 cents per minute, the same amount can barely last 10 minutes of unlimited internet on mobile data. The fear of running out of bundles while completing a purchase online is a ghost that should be tackled by lowering the cost of data.”

Firozi further argues that lower costs of data will provide entrepreneurial opportunities for retailers to be able to sell their products online either through social commerce or listing on online marketplaces where they can access thousands of customers across the country, increase sales and profits while bridging the gap between online and offline retail.

Similar sentiments are shared by Estelle verdier, MD Jovago, “While some network providers offer monthly unlimited internet bundles for mobile you will still find a fair usage policy that caps the internet speed after some time making it slow and disappointing, lower costs of data will be a massive boost.”

But it’s not only the e-commerce companies that feel mobile data is expensive, James Mwathi 26, a medical student at the University of Nairobi expresses, “I stay outside the campus and have 3 different modems, the cheapest unlimited internet bundle I can get for a week is Ksh.999-ksh.1300 this is discouraging especially when I want to research on products I intend to buy online.”

The past year has seen local and international brands that include Microsoft, Infinix, Innjoo, Armco, Fly Mobile, Maybelline, Darling Hair, Crown, Bata, Nairobi Sports House and hundreds of SME’s open online shops on Jumia as they seek to take advantage of the nationwide delivery network Jumia offers.

Firozi remains optimistic that mobile network providers will work closely with the government to lower the costs of data.

“While lower costs of data will boost e-commerce, I can’t emphasis enough the opportunities it will open for our vibrant tech savvy generation in areas of study, research, job search, networking and much more. It’s a bigger picture.”