I’m picking up from this tweet by Robert Alai claiming that Nakumatt is wrong being this late to get into ecommerce. Nakumatt is one of Kenya’s largest supermarket chains with ambitions to be solid in East Africa (story for another day).
Now I have been in a session where Thiaragajan Ramamurthy (TRM) was speaking
And he explained why it’s still early to get into ecommerce in Kenya if you don’t have loads of money to burn without getting returns. Foot traffic still wins in this market, we can argue this till chickens go home, but there is a reason McDonalds is referred to as a Real Estate player and not a fried potato and chicken retailer. It’s access. You don’t have the luxury of making impulse purchases when browsing through an ecommerce site. You do even when walking by a window of a store on the street.
When people get into a store, chances of being convinced either visually or by a promoter are high where you can touch, fit or even get convinced to make a purchase by a commission-hungry promoter at a store. Physical stores are also strategically placed on the way of many Kenyan consumers, like bus stops and other public places.
Ecommerce sites on the other had are mostly winning where they get exclusive deals and massive discounts on products, a necessary thing to get people interested. For a player that has been used to get it easy by real estate advantages, they won’t burn money the way ecommerce sites like Jumia do without immediate returns.