Kenyan shoppers embrace online stores to beat runaway inflation
Violet Njeri's shopping experience has become unbearable as trips to the local supermarket become more costly. The price of sugar, for instance, has hit the all-time high of Sh200 per kilogramme.
"Every time I go to the supermarket I spend more money than the last time," she said. Runaway inflation has dealt many a Kenyan household a blow, with most struggling to balance their pay cheques against high commodity prices.
Many consumers have put a cap on expenditure, especially on non-priority goods, in a bid to save or merely survive.
For some tech savvy consumers respite is found in online shopping. Njeri is among the many Kenyans who are seeking solutions to their shopping woes in online stores and group buying websites that provide two great incentives; convenience and discount deals.
Over the last six months online shopping portals such as Dealfish.ke and group buying sites like Zetu.ke and Rupu.ke have registered phenomenal growth with more Kenyans turning to them for affordable deals.
Zetu.ke marketing director Martin Muli said group buying was rapidly gaining a following. "We started Zetu about 10 months ago and at the time the reception was not all that good, but lately growth has been impressive," he said.
Group buying offers shoppers products and services at significantly reduced prices on condition that a purchase is made by a certain number of buyers.
Clients register with a group buying service provider like Zetu.ke, then they receive updates on available deals through email or social media sites such as Twitter and Facebook.
The users then share information on the deal with friends and colleagues until the required number of customers is reached.
Once an optimum number of clients is registered, the customers receive a deal voucher on their emails, print it out and present it at recommended shopping outlets to buy the product or service. This model has been successful in the marketing of mostly middle to high end discretionary commodities like concert tickets, dinners at high-end restaurants, family getaways, and spa treatments.
Group buying has worked well in developed markets like the US where Groupon website has grown to become one of the largest Internet based companies.
The concept, which is relatively new in the country, is fast chalking up followers owing to the tough economic times and increased Internet penetration. "More people are looking for discounts and we have witnessed a lot of interest especially in food and clothing," said Muli. In addition, Kenyans are becoming more trusting of the online third parties that they send money to for transactions.
As a result, the value of online transactions is growing. "When we began the volume of sales was low since most clients were uncomfortable with carrying out large online transactions. However, they have tested the system and their trust has grown," he said.
Dealfish East Africa regional manager Moses Kemibaro attributed the rise in volumes of goods and services moved through online marketing portals to increased consumer awareness.
"Like any other market, Kenyans like a good deal and saving money will always be an incentive for buyers of products and services," he said.
Group buying websites act as a way of marketing businesses cost-effectively. "It is one of the cheapest and most effective ways of marketing products and services." Over the last six months, the website has recorded a surge in the number of transactions. "This is a result of customer education as well as changing attitudes towards online commerce.
For instance, we now have a good number of car dealers and real estate agents who move a good deal of their businesses via Dealfish.ke which was not the case six months ago," Kemibaro said.
The Website, which features cars, property, jobs, and general items, is currently ranked the second most visited local site after dailynation.ke. The rise in Dealfish.ke's popularity is testament to increased appeal of online marketing among Kenyans.
Better times lie ahead for local online marketing as Internet penetration, especially through mobile phones, continues to grow, said Kemibaro.
"There are over 10 million Internet users in Kenya, which represents over a quarter of the population. The greater percentage of these users get online via their mobile phones," he said.
"In addition, Safaricom's M-Pesa and Airtel Money which have over 16 million users collectively make it easy for users to pay for their deals."