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Small businesses in Kenya find respite online amid tough economic times

Tan KW
Publish date: Fri, 01 Dec 2023, 08:35 AM
Tan KW
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NAIROBI, Nov. 30 -- The Internet has become the saving grace for an increasing number of small businesspersons seeking to survive tough economic times in Kenya.

The traders are closing their physical shops and stalls and moving online to escape high operation costs occasioned by rising inflation.

While embracing online operations, the businesses are seeking to eliminate operation costs associated with rent, electricity as well as licenses.

"It is the only way to survive the tough times," said Gilbert Wandera, who used to run a computer and mobile phone shop at Jamia Mall in the Nairobi central business district.

Wandera, who also offers computer maintenance services, said he closed the shop two months ago as he shifted online.

"I keep the stock at home and promote the wares online, especially on social media, where I use influencers. Potential customers contact me for deals," Wandera told Xinhua in a recent interview.

The businessperson said he used to pay 55,000 Kenyan shillings (about 360 U.S. dollars) monthly rent for the shop as well as 26 dollars for electricity charges and yearly licenses of 163 dollars.

"I could not sustain those costs since sales declined due to the tough times. I also had to release my two workers as I shifted online," he said.

Kenya's inflation stood at 6.9 percent in October, according to the Kenya National Bureau of Statistics, up from 6.8 percent in September.

While the rise was marginal, the costs of goods and services are on the rise occasioned by high cost of fuel.

The situation has been exacerbated by the shilling declining over 22 percent year-to-year against the dollar and other major world currencies, leading to expensive imports as the east African nation is a net importer.

On Thursday, Kenyan shilling traded at 153 to the dollar.

Among traders who are shifting their operations online to beat the tough economic times in Kenya are vendors of clothes and shoes, food, interior decor, perfumes, beauty products and various machines.

"I do graphics design making a range of items. From receipt books, business cards, flyers, funeral programs, wedding cards, banners, stickers, anything to do with printing and top branding solutions at very affordable rates," wrote Sam Musyimi in search of customers on social media.

"Tomorrow, I will be preparing some chicken biryani at 3.2 dollars and it comes with banana and chilli. Place your orders," Abbie wrote.

Betty Wafula, who sells second-hand women clothes as a side hustle, said she cannot let her business die despite the tough times.

"I did not start from scratch this time round, because during the COVID-19 period, I embraced online business but relapsed when normalcy returned. But then I did not close my stall in Nairobi. This time round I have closed it and completely shifted online," the insurance agent said, noting she was paying 131 dollars for rent.

Her new operations involve getting her wares, posting them online and delivering orders to offices and homes in Nairobi, the capital of Kenya, where customers pay upon receipt of the goods.

Some customers, however, pay in advance, and she sends the goods bought using courier services.

The surge in online businesses in Kenya has been catalyzed by widespread use of mobile money, social media and the internet in general.

The Communication Authority of Kenya put the number of internet users in the country at 49 million at the end of June, while during the same period, mobile money users stood at a new high of 63 million.

Bernard Mwaso of Edell IT Solution, a software development firm in Nairobi, said the ability to reach more potential customers, locally and globally, and the ease in serving them makes online trading friendly to not only small businesses but also big ones.

"The cost of operation for online trade is also low since one does not incur overhead costs like rent and electricity. However, trust is key in the success of such businesses, and lack of it is what most traders struggle with," he said.

The Kenyan government is pushing for the increased adoption of e-commerce, especially among small businesses, through setting up free Wi-Fi spots in market centers and other public spaces.

"We are providing Wi-Fi for free in markets and in bus termini to support our mothers and our youth so that they can get involved in e-commerce and other gainful economic employment activities," Eliud Owalo, the Information, Communications and the Digital Economy Cabinet Secretary, said recently.

Kenya's economy is expected to grow 5.5 percent in 2023, an increase from 4.9 percent in 2022, according to the National Treasury.

The country's economy has been battered by global shocks including Russia-Ukraine conflict and rise in interest rate hikes in developed economies as well as extreme weather conditions like floods and drought.

 


  - Xinhua

 

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