What does it feel like to in Kenya?
Sellers use a mix of platform practices and approaches to pursue their livelihoods showcasing their business through listings, paid ads, SEO, online referrals, and collaboration with social media influencers. Those who have digital skills necessary to survive in the online marketplace succeed but still struggle to measure return on investment, especially with online marketing.
Those selling on formal platforms rely on the platform’s marketing budget, existing clientele, and logistic muscle to expand their business beyond their local networks to new markets both locally and internationally. On the other hand, social commerce is common, based on its low barrier to entry, closed groups that enhance trust and prior familiarity. Sellers mentioned experimenting with multiple business pages where they sell varying products and take up whichever gains more traction.
Experience of sellers on formal platforms
Formal marketplaces offer sellers a massive reach to e-commerce buyers, handle logistics,
place sellers in categories, and offer guidelines on product descriptions and packaging.
Commitment on the platform goes hand-in-hand with the number of sales achieved. Low sales thus result in reduced engagement, for instance, from daily platform interactions to weekly to eventually forgetting to check listings entirely.
A chance to venture into new markets, including exporting globally.
Sellers enjoy easier business fulfilment, getting access to a wider audience necessitated by the platforms’ marketing budgets and logistic muscle. They gain exposure to more clients who already trust the platform, get help figuring out order fulfillments, even internationally.
Sellers lack direct access to clients for possible upsell.
Platform handles marketing and fulfillment, sellers focus on product sourcing. This introduces the challenge of “who owns the client,” where sellers have no direct interactions with clients to get feedback and possible upsell options.
While sellers get access to new buyers on the platform, there is a lack of direct connection
to these buyers. Thus some sellers have an ultimate goal to create a personal website where they can build their own brand and clientele and sell their products.
Some categories do better than others.
With platforms having multiple categories, sellers observed that some do well; electronics sell more on Jumia, for example, while others struggle, as low-priced items bought in small quantities have low-profit margins. They attribute this to what the platform is best known for. Sellers continuously seek more ways to remain competitive in the marketplace with some wishing the platform’s terms and conditions were adjustable to reflect their business needs and offer a fair way to compete.
Experience of social commerce sellers
Selling on social media platforms has rapidly increased, with platforms creating tools for
business management, promotion, and easy connection across different platforms. Sellers are aware of the need to learn about these new advancements, especially as competition increases. Social commerce is a preferred starting point for many as it offers a degree of familiarity with clients.
Easy set-up and opportunities to test out business ideas.
The openness of social platforms makes them relatively inclusive. Anyone anywhere can set up a social media page or share on WhatsApp without any additional requirements — for instance, business licensing. Sellers mentioned running a business on social media has lower operating costs as there is no commission to remit on sales and lower initial capital investment compared to having a physical store which allows small businesses to compete on pricing.
Need to expand beyond close circles leads to new growth strategies.
Platforms with closed groups enhance trust among buyers, leading to a shorter path to purchase due to the familiarity with the seller. Over time, growth plateaus and sellers need to expand beyond direct networks and social circles. This leads to new growth strategies, including paid social media ads or buying followers. These additional costs bring new challenging ways to measure return on investment. Only a few mentioned having digital marketing skills necessary to compete, leaving the business’s overall success to chance and luck.
While social media platforms continue to advance with convenient ways to conduct online business, sellers are aware of the need to learn about these new advancements. Some observe what other online businesses are doing, while others keep experimenting until they find something that works.
Influencers are an easier path to purchase.
The rise of influencers is a way to push back against algorithms—what in the review we call contestation. Some of the sellers we spoke to saw influencers as better channels of marketing as they are relatable and yield greater conversion compared to paid ads. While platform ads increase views, followers, and inquiries, outreach through influencer market days —targeted days where influencers advertise small businesses on their channels, leads to successful sales.
Social platforms offer flexibility for sellers, who can carry out business while on the go.
Some sellers have more than one business and plan their workflow by scheduling posts or carrying out business while on the move. Eroding flexibility, however, is a need to be “always-on” as online clients are impatient and competing businesses are many.
While a shop using marketplace platforms can be fully online, social platform design lacks end-to-end transactions, causing sellers to get creative in last-mile delivery. Without an app or a shipping service, they use informally arranged collection points and agents, including using car boots as mobile
businesses, renting a shared shelf space in the central business district, organizing days of delivery, and using existing logistic service providers for last-mile fulfillment.
How can an online seller in this sector?
1. Win the customer's trust.
Sellers mentioned the need to exert extra effort to navigate the trust issues that exist in online business. With a rise in online scammers, clients doubt the authenticity of online businesses especially those on social media platforms. Online buyers set high expectations for sellers including timely communication, competitive pricing, and quality products. Failure to meet these expectations results in them canceling orders and quickly moving to other online competitors.
Successful online sellers need to earn customers’ trust, compete on pricing and quality, and invest in customer relationships. They do this through investment in creative and quality product images and clearly outlining their terms and conditions.
2. Monitor growth and engage with community.
Apart from the profit on every product, success is also measured by the number of orders, followers count, client engagement and customer generated content that pushes the seller’s brand.
Community of online sellers is more need-based than founded in collaboration or collective action. Sellers engage with fellow businesses in cases where they need help fulfilling an order. It was clear that not many sellers are willing to share information on how they source products, hence possible collective effort of importing and sourcing remains a challenge.
The boundaries between the MSE sector and other livelihoods are blurry, both for physical shop owners who are branching out into platform markets, and for the new, increasingly common digital-only shops, typified by rental lockers, an active social media game, and relentless attention to making the sale day after day. As was the case in some of the other sectors examined in this report, there is evidence of multifaceted and widespread adoption of digital practices: in this case, a combination of occasionally paid ads, participation in electronic marketplaces, particularly Jumia, and lots and lots of social commerce.
There is little doubt that this sector will continue to evolve, likely formalize further, and provide livelihoods for many young Kenyans in the years ahead.
Explore study findings on other sectors
Farmers – Formal marketplaces; social agriculture through social media channels, social support via online groups
Logistics – Fast-paced work, driven by the algorithm. Structured weekly earnings, support in bookkeeping, budgeting, and saving.
Creatives – Digital channels as a source of inspiration, distribution, and a platform to educate audiences on the value of art.
Crosscutting themes – Reflection on cross-cutting themes around rurality, gender, inclusion for differently-abled people, and fractional work.
This platform livelihoods research was conducted by Qhala in collaboration with Caribou Digital and in partnership with the Mastercard Foundation.