Will local supermarkets tap into Jack Ma’s ‘New retail’ way?

Kenya’s retail sector must innovate fast to reap from digital evolution in order to catch up with the fast advancing trends of ‘New retail’.

Ma Yun, popularly known as Jack Ma, China’s richest man and founder of Alibaba, is in town. His establishment, Alibaba.com, is the largest e-commerce company that provides consumer-to-consumer, business-to-consumer and business-to-business sales services via web portals.

An analytical look at the ‘New retail’ shows that Kenya supermarkets lack a seamless blend of online and offline shopping experiences.

The supermarkets have done little to adapt technology to spur their growth or diversify, despite an increase in mobile and internet penetration in the country which currently stands at 88 and 82.6 per cent respectively as at December 2016, as reported by the Communication Authority.

A quick survey of four local supermarkets, Nakumatt, Tuskys, Naivas and Uchumi, indicates that only Tuskys, Uchumi and Naivas have online shopping portals, where the latter is inactive.

Nakumatt has a website on Nakumatt Global Card and an inactive link on its Nakumatt stores tab. It has no option of online shopping.

The four do not have mobile shopping applications, despite Kenya being Africa’s Silicon Savannah, with hundreds of programmers skilled in making almost every solution, from USSD and SMS services to Android and iPhone apps.

Uchumi’s chief operating officer James Mbatia attributed the limited digitization services to liquidity challenges that have dogged the retailer for the last couple of years.

However, he was quick to reiterate that once an expected cash injection from the unnamed local investor hits their bank account, they will revive their shopping portal before end of 2017.

“The plan is already on paper and we are waiting for funding to materialise.

Once ready, we will introduced a mobile application and a cloud based shopping system,” he said.

The COO said that despite minimal activity in their online shopping portal, they expect to drive atleast 20 per cent of their revenue from the digital platforms once they upgrade.

Naivas business development manager Willy Kimani explained they halted their online shopping activities due to fraud and minimal traffic.

The supermarket said they intend to launch a mobile application in October this year.

“We expect to draw at least five per cent of our revenue from these platforms.” Kimani Said.

Once the services are introduced, Kenyans will be able to shop from anywhere in the world and let their families pick the goods from a store of their choice by presenting a digital code.

This will require downloading a shopping mobile application of choice, linking it to a credit accounts and shop flexibly from the comfort of one’s location.

Efforts to reach Tuskys and Nakumatt were not successful.

Mark Kaigwa from Nendo, a digital research firm, said local supermarkets need to work hand in hand with tech startups with a niche in the retail sector, and if need be, acquire them.

“Customers are nomadic,and supermarkets need to think of how they can remove obstacles in their markets by embracing technology in bid to raise their competitive advantage” Kaigwa said.

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