Mostbet yorumlar herhangi bir bahisçiyi bunun güvenilir bir bahisçi olduğuna ikna edecektir. Tüm oyuncular için spor bahisleri, çevrimiçi kumarhaneler, promosyonlar, bonuslar ve hediyeler. Şimdi Katıl!
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.
Cloud technology giant SAP aims to enable enterprises to make digital transformations that can result in significant increases in revenue and efficiency by connecting processes and making their internal systems, data and networks more intelligent.
SAP Africa had its first-ever “drive event” in Nairobi for customers and partners in November 2022 to explain more about business innovation and transformation and to show companies how with the right technology and insights, and with the right partner, they can grow exponentially.
SAP bills itself as the “coolest software company you have never heard of” running the critical systems of top companies in diverse industries like ice cream, pet food, beauty products, and finance where 77% of all global transactions go through an SAP system.
Why Innovate? Hardeep Sound, the SAP Regional Director, East Africa said that since 2000, 52% of the Fortune 500 companies have gone out of business. In Kenya, household names like Intercontinental and Tuskys were among the 1,300 and 2,530 companies that folded shop in 2020 and 2021 respectively.
The pace of growth has also accelerated in recent years; whereas between 1955 to 2011 it took a Fortune 500 company 20 years to reach a billion-dollar valuation, today they are getting there in 4 years. He said that companies in Kenya could enhance their value by mining customer data, doing analytics, managing customer relationships and experiences, managing human resources, digitizing supply chains, and monitoring how they spend their resources.
Easy Connections: Stanley Dube, SAP’s Head of Presales in Africa explained how Nokia sold 126 million model 3310 devices, and while his still works 22 years on, the company is a shell of its past. He said that one teaches people how to use phones and applications – they simply buy new devices and start using apps, without realizing how they are partners with companies like Apple and Google who do software updates and backups in the cloud. And if someone loses their phone, they can recover everything back in a matter of hours on a new device.
He likened owing a phone to SAP’s vision to enable companies to be intelligent and sustainable enterprises to deliver business and societal outcomes, with SAP’s modular ERP in the cloud that can manage finance, procurement, manufacturing, warehousing, asset management, research, supply chain and human resources combining 50 years of experience and meeting 80% of the enterprise needs of most companies. SAP’s ERP can connect with apps from other technology vendors while they also have a store that has 2,000 applications where companies can find products that others have built and which they can use.
Aside from the savings that can be 20% to 30% over five years from having SAP run backups, operations, data centres, software, licenses, and maintenance, it frees up managers from doing things like generating reports and shifting to do other things that can add value to companies like strategic planning.
Finding Value in Data: Bhavesh Chavda, Senior Director of Business Technology (BTP) Platform, spoke of the importance of harnessing data; it’s not just about migrating data from an unsafe on-site server room to the cloud, companies also must assess the quality and timeliness of their data for it to be useful and accessible and interrogated by management and by other applications. He said managers should be able to interrogate data, without knowing how to do any coding (“no-code, low-code”). The SAP BTP cleans up enterprise data and enables data-driven decisions, with continuous automation, low code extensions, and application testing. The BTP discovery centre is a free tier to try out for companies to connect, automate, and innovate and 12,000 customers around the world use BTP. He said that SAP’s ERP can connect even with third-party apps while companies can sign on to the free business technology platform (BTP) and start building on new applications.
Rapid Feedback with SAP: Sherif Hamoudah, Head of Ecosystems & Channels for SAP Signavio spoke about SAP Signavio, a transformational system that enables companies to do what used to take consulting teams months to do. Signavio drills through 60 different processes for enterprise transformation within a day, spotting redundancies and inefficiencies and recommending fixes that have been adopted by other organizations for continuous improvement. He gave examples from the auto industry where semiconductor shortages are affecting car manufacturing, and in finance, where global firms are using Signavio for risk compliance.
Using Data to Drive Revenue: Rais David, Senior Customer Experience Solutions Specialist SAP spoke of the value of data and the importance of using current data to discern trends in revenue. Google is phasing out cookies by the end of 2023 and this is at a time when mobile e-commerce accounts for $511 billion or 7.5% of all sales. At the same time, $93 billion of online sales are abandoned each year because customers find there are too many steps to complete a purchase transaction. SAP systems manage 3 billion consumer data identities, while protecting their privacy, and process $570 billion making them the 7th largest entity in sales.
Fast Turnaround on Implementation: Lewi Maina, Consulting Services Manager at SAP emphasized the importance of businesses being quick to implement changes if they are to thrive in fast-changing environments. He said that once they took a path, they should aim for a quick turnaround time for projects as he said that some companies in Africa can now deploy Rise and other SAP projects in a few weeks. This is a takeaway from previous transformation projects at companies that took up to three years. He said that the five keys to a successful deployment were implementing cloud with an agile mindset, using preconfigured solutions, leveraging on modern integration and extension technologies, and ensuring transparent documentation on deviations.
At the drive event, testimony was shared from some clients of SAP including;
David Kariuki, ICT & Innovation Manager of the Kenya Electricity Transmission Company (KETRACO), the state agency that builds high voltage transmission lines across Kenya. In 2018 after the government asked entities to take procurement online and plug into their central procurement system, known as IFMIS, KETRACO chose SAP’s Ariba as it sought to replace a manual procurement process where suppliers brought in envelopes and huge booklets of tender documents to be reviewed and scored in a time-consuming and laborious process. After a long process of digitization, standardizing procurement, tracking activities to reduce time loss, and overcoming supplier resistance, KETRACO, which was one of the first companies in East Africa to deploy SAP’s Ariba is now a centre of benchmarking for e-procurement. They also have access to innovation, as SAP updates come over the cloud quarterly for them to adopt.
John Wachira the Group Manager of Information Technology at the Safal Group (popularly known for its Mabati Rolling Mills products) spoke about the complex deployment with SAP to consolidate the group’s 36 operations that are in eight countries. They are in the second phase now to consolidate the end-to-end manufacturing, downstream operations, and commercial operations into one standard business environment on the cloud. They have gone live in six countries with two to go.
A few weeks before Kenya’s August 2022 general election, Parliament is to debate and pass the Finance Bill which was published in April. Some measures it proposed will become effective in July 2022 and others in January 2023.
The tax proposals are to meet the country’s 2002/23 budget with a planned expenditure of Kshs 3.4 trillion which includes Kshs 2.14 trillion of ordinary revenue. The Finance Bill will need to be passed along with the Budget Estimates, Appropriations Bill and County Allocation of Revenue Bill. A recurring concern with investing in Kenya is the ever-evolving tax code that changes from year to year, adding, taking away or adjusting taxes and deductions.
Local tax advisory firms such as PWC, KPMG, and Deloitte have published summaries and interpretations of some of the tax proposals,
Agriculture: Removal of an exemption of clearing or planting on agricultural land.
Digital Economy: The digital service tax doubles from 1.5% to 3%. What impact will that have on e-commerce in Kenya?
Energy: Briquettes using sustainable fuel are exempted from VAT
Financial Markets Capital gains tax (CGT) goes up from 5% to 15%. Also, gains by foreign investors trading in derivatives will attract a withholding tax of 15%.
Foods: Excise duty of 15% on imported potatoes, excise duty goes up slightly on fruit juices, beer, other alcohol, wines, imported sugar, and white chocolate. Also, excise tax is added on electronic cigarettes, ice cream not containing cocoa, and liquid nicotine.
Local medicine manufacturing: in the recovery from covid-19, plants aiming to manufacture pharmaceutical products will be exempt from paying import declaration fee (3.5%) and railway development levy (2%). Also while a 25% excise duty on imported glass is imposed, it excludes those for pharmaceuticals.
Media: 15% excise tax added on advertisements by betting firms and alcohol companies.
NGOs: Trusts must now use taxpayer PINs to transact.
Big Stick Enforcement: To appeal against a tax claim, someone must deposit 50% of the amount upfront in a special account at the CBK. Also, ships, planes, and motor vehicles can have a payment claim registered against their ownership by KRA, in case their owners have not paid other taxes. The law currently only applies to land & buildings. Also, multinationals with a turnover of Kshs 95 billion ($750 million) will be required to file Kenya-specific reports within a year of their financial year-ends.
Yesterday Jumia released their Africa e-commerce index 2021 with some interesting trends, a year after Covid-19 impacted lives across the continent.
Sam Chappate CEO Jumia Kenya said that in Africa, e-commerce still has room for growth as currently, it still accounts for just 1% of transactions, and another 300 million people will be accessing the internet in two years. 75% of traffic to Jumia is on mobile, while it is 85% for Kenya.
Gross merchandise value has shifted – from 40% of pre-pandemic sales coming from everyday stuff (FMCG, beauty products) to now 60%. Now, a 2kg sugar bag is the top-selling product on Jumia in Kenya.
NYSE-listed Jumia is in ten countries and Kenya number 2 in searches, behind Nigeria. Top cities in Africa are Lagos, Cairo, Nairobi, Casablanca, Abidjan, Gaza, Abuja and Accra.
With 11,000 sellers and 1,600 pickup stations, Jumia has the biggest logistics infrastructure in Kenya. Coca-Cola is probably bigger but it’s a closed system whereas Jumia has opened their system and logistics infrastructure to third parties/partners (e.g. Premier Foods and Unilever). Small companies can use pickup stations for FMCG.
Sales of Jumia are 51% primary cities, 27% secondary cities, and 22% rural – so 50% outside Tier-I cities. Most deliveries in Kenya are to Nairobi Mombasa and Kiambu.
Now big in fintech .. 35% of Jumia orders are paid through Jumia pay which has 4 million downloads – they have now opened Jumia pay to third-party partners, starting in Egypt.
Also, Chap Chap GO, an -e-commerce startup that’s winding down, uncovered some gems from its year of operations in Mukuru and Langata areas trading a limited basket of products. Its founder Soud Hyder, a digital commerce specialist, shared some urban e-commerce insights on Twitter.
Fastest moving items were wheat flour (Ajab), cooking oil (Salit), cooking fat (Samli), and then sugar – all needed on a daily basis by Mama Chapos (informal roadside cafes).
Ajab Flour was super interesting; it’s very popular with Mama Chapos despite being a relatively newer brand, they cited quality and texture for it being the preferred choice, something to do with the elasticity of the chapos and preferred kneading consistency by the cooks.
Samli was a product requested by customers, trialled with a small cohort in Jul-Aug 2020, mostly “Mama Chapo” type of customers.
GIL (manufacturer of AjabFlour) has a lower quality fighter brand called Umi, intent was to help them garner market share but turns out the premium brand is more popular even in the lower tier of the market, customers are willing to pay a bit more for quality.
The market has already validated the “measure and pour model” (weka ya kupima), unhygienic & inconvenient but the market has found equilibrium, works for both retailers and customers, an additional 3% margin is not bad at all for folks in informal retail
.. Mama Chapos ended up becoming our core customers because of on-demand service, fair pricing and convenience. We were not always the cheapest but the convenience aspect really helped them focus on their business.
We used a hub and spoke model, had small depots in the neighbourhoods we operated in .. the eventual goal was to partner with existing businesses/retailers that had storage space to spare and delivery capacity.
We mostly did two, Fresh Fri (B2C – middle class) and Salit (informal retail/kibandas), our B2C footprint was relatively small, so ended up doing quite a bit on Salit including repacking it in 1L reusable jars, see the cost of packaging easily adds 3-5% to the price.
Differences in margin is all about supply and buy planning (basis of commodity trading) and following market prices being set by the bigger suppliers/manufacturers, if they drop you have to drop otherwise you won’t move stock.
Flour and oil move every day so it’s a volume game and moving bulky items from depot to customer/market in the most efficient way possible, for those who are able to do it really well e.g. the Eastleigh wholesalers and some of the bigger distributors.
So FMCG margins are razor-thin in sub-Saharan Africa, pricing makes or kills a business, so wholesalers and bigger retailers make money from rebates in subsequent months, invest capital to build seed customers and retention, build volume for rebates, qualify for credit .. and build credit lines with manufacturers, that net 15 or 30 or 45-day credit line could easily get sub 10% margin, so not a bad hustle if one has all their ducks lined up, but it’s hard, not the easiest of businesses to run, so many things could go wrong
.. which is why you are seeing an influx of new oil and fats brands, if you crack distribution, you can carve out a niche. They call vegetable oil these days “Salad* after the brand Salit.
Primarily it’s a quality, price point and availability problem. So more on the distribution side, like milk ATMs, if you can plug a brand on top that and execute, even better
Unfortunately, we shut down our FMCG business in Q4-2021 and are formally shutting down @ChapChapGO .. we’ve become another statistic of a fledgling startup but hope the insights and lessons learnt will benefit and inspire others.
Dalberg has released a report titled Kenya’s Digital Economy: A People’s perspective. It finds that, in terms of digital transformation, Kenya is a lower-middle/income country that shows some characteristics of a higher middle-income economy.
The survey is based on in-depth responses from 2,456 people in Kenya’s 47 counties. It was done in 2020 to assess their perceptions on the state of the supporting ecosystems, digital infrastructure, enabling resources, applications and services.
The report differentiates between the uptake of “basic” digital services (sending money, buying airtime/data) and “advanced” digital services (e-commerce, paying for goods and services – health, education, agriculture, supporting livelihoods). It notes that some challenges to the next step of Kenya digital economy including exclusion and digital safety (fraud/harassment, cybercrime when using devices).
A stunning finding is that there is a low demand for advanced digital services, beyond mobile money, digital communication and social media. This is because non-users and 30% of current basic digital users do not find digital products or applications that are relevant.
Some of the sectors it touches on:
Agriculture: Kenya is one of the most advanced agri-tech markets with approximately 30% of agri-tech startups in Sub-Saharan Africa operating here and with 18% having their headquarters in the country But the awareness of landowners of digital services is low. 45% of those surveyed are not aware, while just 13% use digital services for their livelihoods – mainly to communicate with customers, suppliers and vendors while 10% use it for inputs and 15% for knowledge sharing. Half of those who do, use it as a result of assistance from field agents who are strong support factors for rural digital economies. Also half of adult female farmers face challenges in affording devices and accessing the internet which makes them hard to reach with interventions.
Health: There is low use of digital health services with only 15% of respondents aware, and of those, 35% use it mainly to consult health workers and pay for medicine with mobile money. The challenges cited are high costs and mistrust of doctors they can’t see while a quarter are concerned about sharing health information online.
Ecommerce is urban: 23% use e-commerce in urban areas compared to 9% in rural ones, and in Nairobi and the central region, uptake (24%) is twice as popular as in other counties in the rest of the country where it ranges between 1-12%.
On Financial Access:
Mobile Money has (+) and (-) aspects. The usage of mobile money is near-universal with 95% of lower-income and 93% of rural people using it as Kenyans have good user experiences with it, unlike some other countries. And while there have been concerns about fraud, 80% have trust in mobile money, but also 53% cite high costs as a reason not to use mobile money, more so with lower-income Kenyans.
Easy Credit: The report cautions that government should watch for debt traps from increase ease of digital credit in the country. Half of the respondents have had to sell assets, borrow more or reduce food & education expenditure to repay a loan – and this increases the chance of financial exclusion. Also, basic digital users lost an average of Kshs 1,470 to fraud while advanced users lost twice as much (Kshs 2,996) over the past three years. This is a risk that can grow as more unexposed people turn to advanced services and may face devastating losses that they cannot absorb.
Social safety nets: People with government stipends or pensions are more likely to use e-government services (such as eCitizen, iTax NHIF) than other Kenyans in general.
Entrepreneurs use it little: Among self-employed and business owners half use digital services and mainly for basic reasons like communicating with customers and vendors. Only 15-18% use it for advanced reasons like keeping business records, tracking stock, paying taxes, selling services and buying supplies through e-commerce platforms.
The report by Dalberg, done with support from the Omidyar Network, along with its data sets, can be downloaded here.