Kenya’s e-commerce sector projected to generate Ksh.28 billion by 2027 - report

Kenya’s e-commerce penetration is projected to grow to 53.6 per cent by 2025, according to a new report by the Competition Authority of Kenya (CAK).

The Online Food and Groceries Delivery Platforms Market Study released Thursday says revenue generated from the sector is expected to grow annually at a 19.15 per cent rate to reach a market volume of $208.2 million (Ksh.28 billion) by 2027.

This is in contrast to 2020 when the country’s e-commerce penetration, including online food and groceries shopping, was estimated to be at 40.3 per cent.

At the time, it was estimated that 9.3 per cent of Kenyans were shopping for food and groceries online as of 2023, which is now projected to rise to 16.7 per cent by 2027, which translates to 10.5 million consumers.

CAK attributed the rapid growth in online food and grocery shopping in Kenya to the increased need for convenience and proficient delivery services. 

“Businesses and industry regulation including competition law and policy enforcers, need to be adequately prepared and have an in-depth understanding of not only potential competition concerns in these markets but also consumer protection issues that may arise in online shopping platforms including, online food and groceries markets which are multi-sided,” the competition watchdog said.

The online food and grocery market in Kenya saw an upsurge with the onset of the COVID-19 pandemic in 2020 as consumers avoided social places as part of regulations to stop the spread of the coronavirus.

Other arrangements such as remote working saw many middle-class Kenyans opt for online deliveries, which in turn incentivized food and grocery retailers including restaurants and supermarkets to partner with delivery platforms, payment and courier service providers.

CAK further attributes the surge in home and office delivery to the convenience and safety that came with the model.

Some of the popular players in the local e-commerce and food delivery scene are Jumia, Glovo, Uber Eats and Yum Deliveries as well as restaurants and retail chains like Carrefour who have independently incorporated e-commerce into their shopping experience.

While Kenya does not have explicit regulations governing e-commerce, there have been several legislative changes in the recent past including the Data Protection Act, of 2019 and the Copyright Amendment Act, of 2019.

The CAK report however notes significant information and regulatory gaps on how digital platforms operate along the e-commerce value chain.