KENYA- Online food and grocery platforms generated US$103 million in 2023, according to a study by the Competition Authority of Kenya (CAK).
Projections indicate a robust annual growth rate of 19% in the coming years.
The study highlights essential players in the market, with Glovo leading with a 33% market share, followed closely by Jumia Food at 23%, Uber Eats at 21%, Bolt Food at 16%, and Yum Deliveries at 2%.
Retailer preferences also underscore Jumia’s dominance, with 31.8% favoring the platform, 25% for Jumia Food, and 25% and 12.5% for Glovo and Uber Eats, respectively.
This data underscores the increasing significance of e-commerce in Kenya, particularly in the food and grocery sector.
The report forecasts a notable uptick in online shopping frequency, from 9% to a projected 16% by 2027.
Notably, the majority of these online shoppers are in the 21- —to 30-year-old demographic, and mobile money platforms like M-Pesa and Airtel Money are their preferred modes of payment.
However, challenges persist within the industry, with 32.9% of consumers citing delays as a primary concern.
Additionally, approximately 30% of customers report receiving substituted items, while others express dissatisfaction with product quality and customer service, resulting in refunds for 10% of orders.
Furthermore, the study reveals a concerning trend: Some platforms redirect consumer complaints to headquarters outside Kenya, prolonging resolution times and increasing costs for consumers.
In light of these challenges, the report emphasizes the importance of fostering a balanced relationship between retailers and online platforms to fully harness the industry’s potential, particularly in achieving price harmonization.
Interestingly, contrary to conventional assumptions, taxes were not found to significantly impact pricing on these platforms.
Overall, while the online food and grocery sector in Kenya presents substantial opportunities for growth, addressing consumer concerns and fostering cooperation between stakeholders will be crucial for its sustained development and success.
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