A Global Business Experience: Growing E-commerce in Kenya
Becoming the leading online marketplace in Africa is no easy feat, and as part of the Global Business Experience, a team of MBA students discovered firsthand just how difficult such a goal could be, especially in a developing economy. Tejal Desai (MBA’17) worked with five classmates to provide a long-term business strategy for African e-commerce giant Jumia Kenya—a plan that she says should help Jumia grow throughout the entire continent.
Jumia Kenya is a subsidiary of Jumia International, Africa’s leading e-commerce marketplace backed by Africa Internet Holdings; it is also Kenya’s leading online shopping destination. Based in Nairobi, Jumia provides African consumers with an online platform that offers a wide assortment of high quality, affordable products available for delivery anywhere in Kenya.
SOLUTIONS FOR THE FUTURE OF ONLINE SHOPPING IN KENYA
In order to thrive, the company must overcome a handful of cultural and logistical challenges. Kenyans are hesitant to embrace online shopping due to the country’s susceptibility to online fraud and its highly competitive open market structure. And unlike in the United States, where the United States Postal Service is considered a reliable system, Kenya’s national postal service has yet to develop at a rate that can accommodate the demands of its growing population.
“Kenya’s culture has a long way to go before it fully shifts from ‘brick and mortar’ shopping to online shopping,” Desai said about the challenges. “Kenyans also don’t trust the mail system. Things get stolen or they never show up; there’s no such thing as tracking. And even if there were, the infrastructure isn’t able to support that type of service.”
Desai and her team think the first hurdle in Jumia’s race for growth is the culture’s perception of online shopping. She believes that her group’s recommendations might influence a change in the company’s approach to building an online marketplace, especially as the convenience of online shopping grows in popularity throughout the world. Inspired by the efficiency of container ship deliveries, Desai also expects that her team’s recommendations will strengthen Kenyans’ trust in delivery services though that plan is far off and will require extensive resources and support.
At the conclusion of the project, Jumia’s leadership appreciated what the MBA students provided to them. “My team and I were able to collectively leverage our backgrounds, experiences, business expertise from the MBA program, and creativity to develop insights and sound recommendations for Jumia to implement,” Desai said of her experience collaborating with her classmates.
KENYA: AFRICA’S MOST CONNECTED COUNTRY
While in Kenya, Desai and her teammates found time to explore the country and interact with some of Jumia’s consumers about the company’s e-commerce structure. Many Kenyans still do not have access to internet, even though the web has seen usership increase from 200,000 people to almost 32 million in the span of 16 years. Internet usage in Africa falls short of any other continent at just below 27 percent but as the continent’s most connected country at 66 percent, Kenya offers endless opportunities for Jumia.
Reflecting upon the experience, Desai found the GBE to be a highlight of the MBA curriculum. “Working on a pilot business idea and a new strategy for a hot Kenyan tech startup was an amazing and unique experience.” While the specific nature of the team’s recommendations remain confidential until Jumia can prepare for a launch, the proposals are a unique and novel concept, not yet introduced to the African internet industry. Desai expects the launch to be a success, but notes that “only time will tell.”