M-Commerce in Kenya

Topics: Mobile phone, Internet, Electronic commerce Pages: 20 (6051 words) Published: September 23, 2008


Businesses in Africa are turning to the internet to enable them reach a wider market. This is known as Electronic Commerce, where buying, selling, investing and lending is done over the internet. Unfortunately in Kenya, the internet infrastructure is very limited. However with the cell phone boom, there is hope through Mobile Commerce.

1.2Background of the Organization
For the purpose of this study, we look at a small company called Easy Logistics. Easy logistics started in March 2005 in a small town in western Kenya called Kisumu. Kisumu has a population of 822,024 (1999 census) in a region over a breadth of 1131Metres. The company provides logistical solutions for both small and large businesses. The CEO, Mr. James Bingo, owns 35% of the company while the six board of directors own the rest of it. The company has six departments; Accounting, Human Resources, Operations, Inventory, Quality control and Marketing departments. The organization has 106 employees working in its 65metres squared warehouse. The organizations Vision is to have the best logistical network in Kenya in the next five years. The Company’s Mission is to provide Logistical solutions for both small and large companies through quality service. The company will use modern technology to ensure efficiency and the best value for money in the logistical industry in Kenya. This will ensure reduced order to delivery times, and inefficiency caused by inaccuracies. The company’s main objectives are:

1.Open one outlet every year
2.Increase its customers by 10 % every year
3.Increase its profits by 12% every year
4.Reduce inefficiencies caused by damages and inaccuracies by 60% every year. This is how the company operates. The marketing department would approach manufacturing companies that supply wholesalers and super centers in Kisumu with intentions of securing contracts. Retailers, small businesses, NGOs, government offices are also solicited. The marketing idea was to inform the clients how they would benefit by letting Easy Logistics handle their storage and transportation needs. Some of the advantages included: 1.Manufacturing companies would have their goods closer to their customers, reducing storage and transportation costs. 2.Small businesses would save a bundle on storage and inventory costs. 3.Transactions done over phones get easier, with customers getting their products directly from the warehouse, or getting them delivered. This reduces inconveniences of high office rents. 4.NGOs, save on delivery times to their remote areas in Kisumu, since their products are more accessible. The company also handles their transportation for them at a cheaper cost since they have fixed rates with their outsourced companies. 5.The company monitors product demand in Kisumu for their clients by observing their inventory movements. 6.The company also networks their customers by organizing business seminars for their clients. To achieve most of its objectives, the company has to reach more customers. E-Commerce is one of the ways to do this. However, with the poor distribution of computers and Internet Cafes, and the entire internet infrastructure, the project focuses on Mobile Commerce. Mobile Commerce is the buying and selling of product and services over the net using Mobile devices such as smart phones, mobile phones and hand held computers (Nad Nadesan 11/2007). For Easy Logistics to reach remote markets in the countryside, they will need to do most of the transactions using mobile phones. This is because cell phones have become more affordable making them widely distributed with over 14 million subscribers (Safaricom 2007).

With the increased saturation of the city markets, small businesses have to access the remote customers to compete. The problem is that these businesses are located in the city, far away from their customers in the...
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