Safaricom Is Challenging For A Share Of Kenya's Online Electronics Market With A New E-Commerce Platform

There are many things I find truly fascinating about Safaricom. They are the biggest mobile operator in Kenya with close to 70% market share, and the country's most profitable company by a mile. They are no longer just a telecoms company.

We don’t want to become a company for everything, we want to become a platform for everything. And in fact we’ve even moved on from using the word platform. We now use the word raft because platform is something which sits still. A raft is something which moves. And the world that we’re in today is moving at a particularly rapid pace.  Safaricom CEO Bob Collymore in an interview with the Business Daily

Safaricom made 4 billion shillings (US$39 million) from the sale of handsets during the first half of the 2016-2017 financial year. Majority of these sales were through the company's brick-and-mortar stores co-located with their customer service centers, so having an online platform for this is the next logical step.

When news of Little, their taxi hailing app, started spreading, I thought it wouldn’t work. Months later, it seems like they are progressing well.

Then weeks ago came the news of the expanded coverage of Safaricom Fibre, a fibre-to-the-home solution, and I was excited only to later realise, the service is only still available in some estates in Nairobi.

Hopefully, this will expand to other parts of Kenya.

Then…

And as it turns out, Safaricom is looking for someone to head their e-commerce department.

This past Valentine’s Day, we heard of something very new from Safaricom, an e-commerce platform called SafMall.

Okay, not new exactly. Plus, we may all be wrong because we already have the Safaricom Online Shop. This may just be an upgrade.

However, Safaricom went ahead to tease a 'new e-commerce proposition' on Twitter…

Internally, amongst its staff, Safaricom was testing a new e-commerce platform with Flash sales of ridiculously priced phones. Maybe as a test of what the site could handle.

The fact that these were just phones “on sale” made me feel skeptical that it would just be a revamping of Safaricom Shop. But remember, Jumia, Kilimall and other online retailers thrive on smartphones and electronics.


Image

SafMall staff offer

This will likely be a big disruption once it rolls out.

A check-up on Safmall.co.ke shows the following:

Image

This may take a while. Or may come as soon as next month.

It certainly makes sense for Safaricom to venture in the space. Think about it:

  1. Pricing and quality of products – Jumia has a lot of issues on this, and Safmall's differentiator could be in delivering quality products with deep discounts. We could also see the introduction of contracts for devices, where rather than having to pay the full amount for a device beforehand, one can spread the payments over a period of time, making them more affordable in the long term.

  2. Getting people to know about the platform – Safaricom controls close to 70% market, so extending the operator's reach into how these people acquire their devices makes sense.

  3. Easy payments – Seeing as Safaricom's Lipa na MPesa already has a significant presence in the payments space, it can easily be added on to Safmall for convenient, fast and seamless payments.

  4. Delivery – Safaricom's Spark Venture Fund invested in Sendy, an on-demand delivery company, meaning that the company already has a footprint in the logistics and delivery space.

Safaricom is making some interesting ventures in the mobile market, and going online could make waves and challenge established players in the e-commerce market. We're definitely watching to see what moves the green giant will make.

This post first appeared on Tech-Ish.com

Comments