E-commerce is increasingly useful, and nice to have as a service, which we use every day, but is it profitable? There were two e-commerce deal announcements in Nairobi today that happened almost simultaneously.
First up was Lipa Later, the “buy now pay later” fintech company confirming that it had acquired SkyGarden, a popular site for purchasing goods from abroad. SkyGarden had recently announced they were closing shop, as they were running out of cash – and this S.O.S. announcement appears to have worked as a last-minute rescue deal with Lipa Later came just days after. Lipa Later has been signing up partners and SME’s enabling them to sell products like laptops, phones, and insurance to customers on credit. The two companies had worked together and with this familiarity, the deal for a 100% takeover is complete and SkyGarden, with its staff already absorbed, will remain, and run independently. SkyGarden had invested $6 million to run in Kenya but seems to have faced challenges with the logistics of e-commerce. Lipa Later will maintain the “same day” delivery attraction of SkyGarden whose customers will now be able to pay using Lipa Later instalments in Kenya and later in Rwanda, Uganda and Nigeria.
Then there was the launch of Kapu Africa, from former executives of Jumia and other technology leaders.
Kapu Africa is focused on bringing down the cost of weekly groceries by sourcing from farms and food manufacturers for free next-day delivery to a Kapu agent collection centre such as hair salons or other homes near the buyer’s house. Orders are to be placed on WhatsApp by 9 PM with even lower prices for group purchases. Kapu says it has 1,500 centers in areas like Eastlands, South B, Kawangware and Kasarani and plans to be all across Nairobi by March 2023.
Other recent developments:
Safaricom for juniors: E-commerce buyers tend to be over-18 as payments require that a card and M-Pesa (mobile money) be used, but Safaricom has gone beyond that hurdle in launching M-Pesa Go, to tap kids between the age of 10-17, who have access to mobile phones, and enable them to buy from stores and pay for things like taxi rides and online meals, with supervision from their parents.
Contactless SME payments: Fast, easy payments, preferably without any physical contact or exchange, are a holy grail in e-commerce especially for fast-paced urban lives and for in-person shopping during Covid-19. Now Pesapal, which has quietly locked up key territories and partnerships in the SME payments space in Kenya enabling them to easily accept all forms of e-commerce payment from customers, whether card or mobile money, has launched a new tap service.
Food distribution: Logistics is a big part of e-commerce and last week Twiga Foods, one of the best-funded organizations in the space, had Kenya’s President William Ruto launch a logistics hub at Tatu City in Ruiru, near Nairobi. The company has a Twiga Soko Yetu platform and 200,000 square-foot automated warehouse and distribution centre that can handle 8 million kilos a day of fresh produce, food and retail commodities for Twiga to distribute to its 140,000 customers across Kenya and Uganda.
edit Now Jumia has closed its offices in Dubai and shifted its senior staff to work in Côte d’Ivoire, Kenya and Morocco, in a cost-cutting move. Via Tech Trends KE.
Previous insights on e-commerce in Kenya from Jumia and Chap Chap Go.