An Exploratory Study on E-commerce, Digital Payments and Digital Remittances in Nairobi
10th October 2013
Leonida Mutuku firstname.lastname@example.org
Afrikoin is a flagship conference on digital currency and payments in Africa with the aim of bringing to light and tackling the real challenges surrounding digital currency and payments in Africa, while providing a rewarding learning experience for anyone new to the space. The conference, which will be held on 20th November 2013, targets practitioners, innovators and entrepreneurs in the industry with an aim to push forward practical innovation in digital currency and payments. Thematic issues that will be addressed at Afrikoin include gaps and broad opportunities in the digital money space in the nascent African market such as: identifying payment aggregators, technical considerations for digital payments and regulation policies. Afrikoin will also double up as a demo day for Savannah Fund e-commerce focused investments.
One key component to digital money is an understanding of the African online consumer, their preferences and habits when it comes to e-commerce, digital money transfers and remittances. This is in order for players in the space to effectively anticipate their needs and capitalize on the growing population of African online consumers. Little research has been done in Africa that distinctly brings to light this growing populace, their characteristics and needs, and how different stakeholders in the e-commerce/digital money space are engaging online consumers.
Further, there is a need to landscape the e-commerce market in general in Africa, with a focus on the existing trends in e-commerce and digital payments, various actors and stakeholders, the macro-factors affecting adoption of e-commerce and digital payments, and the potential for the market to grow. Currently, new and existing players in Africa are struggling to identify the current dynamics of e-commerce and digital payments, and ultimately how to acquire and retain customers.
iHub Research together with Savannah Fund is conducting research to understand the e-commerce landscape in Kenya, particularly Nairobi. The main objectives of this research include:
Key questions this research aims to answer include:
Future iterations will scale this research to other key African markets.
This research will be conducted in Nairobi and will use a mixed methods approach as outlined below:
Online desk research will be conducted to study any existing literature on e-commerce and digital payments in Africa, and particularly in Kenya. This will provide background knowledge on definitions of e-commerce and digital payments and the different scenarios in which they take place; consumer profiles and behaviors; existing legal frameworks governing e-commerce; and prevailing challenges and barriers to growth of e-commerce in the region.
A short survey will be conducted with both e-commerce and digital currency users and non-users. This survey aims to understand consumers’ and non-users’ perceptions to e-commerce and digital payments, current trends in purchases and payments of goods and services using digital channels and any challenges faced when conducting such transactions.
Initially, this survey will be deployed as an online questionnaire targetting 150 users and 75 non-users of digital currency, payments and e-commerce services. The research team will use BiNu market research tool to deploy this online survey, which will be live for a period of three weeks. Additionally, the research team will partner with popular e-commerce sites to post links to the survey on their sites in order to ensure that the target sample sizes are fulfilled. It is intended that this survey will reach an equal number of male and female respondents.
Finally, to ensure that the sampling targets are achieved, we will code the questionnaires on to tablets and hold face-to-face interviews with at least 20% of the required sample target.
In-depth interviews will be conducted with at least one representative from a regulatory agency as a follow up to findings from the literature review on existing regulatory frameworks for e-commerce and digital payments/currency. Similar interviews will be held with at least 10 founders of e-commerce and digital payments companies and startups to understand further the business side of e-commerce transactions, and payments and the various challenges faced in delivering such services. An additional two interviews will be held with traditional commerce merchants already using digital payments such as the Uchumi and Chandarana supermarkets.
A team of researchers from both Savannah Fund and iHub Research will conduct this study. Data collected in this research will be aggregated and analyzed and key findings highlighted in a report. This report will also include findings identified in the research such as various existing models of e-commerce in Nairobi presented in graphical formats. Further, the research findings will be disseminated through an infographics and in a PowerPoint presentation format at the Afrikoin conference.
Finalizing Research Instruments -questionnaires; Coding to the tablets; Finalizing Engagement with BiNu
October 14th – 18th
October 20th – November 5th
October 28th – November 1st
October 22nd – November 1st
Analysis and Report Writing; Building infographics; Peer Review w/ Tonny Omwansa
November 1st – November 14th
Presentation of Findings
November 15th and 20th
Users of E-commerce
Where did you find this item/service?
How did you make payment?
How received the service
Digital - credit card
Facebook Page- Jewels by Angeline
Digitally - M-pesa
Central Bank of Kenya
Kenya Bankers Association
Communications Commission of Kenya
2 Social Commerce companies e.g. Facebook sellers