NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, April 27, 2016

A new Nielsen Study on Kenyan Retailers and Technology reveals that despite the massive uptake in mobile usage in Kenya, there is still significant scope for growth in the market, particularly in the retail environment.

The study utilised face-to-face interviews to gauge the technology adoption rates of 300 retailers across a wide spectrum of channels and functions. Based on these interactions, the research reveals that the Kenyan retail arena remains dominated by direct dealings in terms of both transactions and communication, with 96% of customers still preferring to use cash in-store, and 88% of retailers relying on face-to-face interaction to inform customers about new products.

The mobile channel seems hugely under utilised, with mobile money being used by only 12% of customers, and only 3% of retailers using SMS to inform customers about new products, and 1% using WhatsApp. In light of this, Nielsen East Africa MD Jacqueline Nyanjom comments; “In a country with 96% mobile penetration, the findings are somewhat surprising – but they do point to enormous potential for growth.”

MOBILE MONEY MARKET ON THE RISE

Perhaps the most surprising avenue of growth is in the mobile money market, which is already one of the largest of its kind worldwide, with 43% of the population actively using a mobile money application. Incredibly, however, only 12% of retail transactions are currently conducted via mobile money; an unexpected finding given the benefits of safety and ease of use that mobile money has brought to the African continent. This points to enormous potential for growth in a sector that has already outperformed all expectations.