KENYATTA UNIVERSITY

SCHOOL OF BUSINESS ECONOMICS AND TOURISM

DEPARTMENT OF COMMUNITY RESOURCE MANAGEMENT

HFS 211: CONSUMER ECONOMICS

GROUP 8

1.Achieng Georgia Noels E23/0490/2023

2.Natasha Wekesa E23/2234/2020

3.Sheilah Kwamboka E23/8187/2023

4.Sharon Kipchumba E23/8263/2023

5.Nafula Ebby Blessed E23/3949/2023

6.Brenda cherotich E37/3711/2023

7.Momanyi Sylvia E23/3544/2020

8.Lectisher Avoga E23/4187/2020

Kenya continues to experience a rise of e-commerce. Discuss the influence of digital platforms on
consumer choice and market competition. Use relevant examples and references.

Kenya's rise in e-commerce has significantly reshaped consumer choice and market competition, driven
by the increased adoption of digital platforms.

Influence on Consumer Choice

1. Influence on Consumer Choice

1. Enhanced Product Variety and Accessibility

Explanation: Digital platforms aggregate products from various sellers, offering consumers a vast
selection beyond geographical limitations.

Example: Jumia Kenya provides electronics, fashion, and household items from both local and
international vendors, broadening consumer options.

2. Convenience of Shopping Anytime, Anywhere

Explanation: E-commerce allows 24/7 shopping, accommodating consumers' schedules and reducing the
need for physical store visits.

Example: Kilimall enables customers to place orders at any time, with delivery services reaching various
parts of the country.

3. Access to Customer Reviews and Ratings

Explanation: Online reviews provide insights into product quality and seller reliability, aiding informed
purchasing decisions.

Example: On platforms like Jiji, buyers can read feedback from previous customers before engaging with
sellers.

4. Personalized Shopping Experiences

Explanation: Algorithms analyze browsing and purchase history to recommend products tailored to
individual preferences.
Example: Carrefour utilizes user data to suggest items that align with customers' interests, enhancing
the shopping experience.

5. Competitive Pricing and Discounts

Explanation: Online platforms often feature price comparisons, flash sales, and exclusive online
discounts, making products more affordable.

Example: kilimall frequently holds "Flash Sales" with significant discounts on various products, attracting
price-sensitive shoppers.

6. Access to International Products

Explanation: E-commerce bridges the gap between local consumers and international markets, offering
products not available locally.

Example: Through platforms like Alibaba, Kenyan consumers can order products directly from
manufacturers in China.

7. Multiple Payment Options

Explanation: Integration with mobile money services and digital wallets offers flexible and secure
payment methods.

Example: Most Kenyan e-commerce sites accept M-Pesa payments, catering to the prevalent mobile
money user base.

8. Home Delivery and Logistics Services

Explanation: Efficient delivery networks enhance convenience by bringing purchases directly to

consumers' doorsteps.

Example: Glovo offers delivery services for various products, including food and groceries, within Nairobi
and other cities.

9. Augmented Reality (AR) for Virtual Try-Ons

Explanation: Some platforms incorporate AR to allow consumers to visualize products before

purchasing.

Example: Lenskart enables users to virtually try on glasses using their smartphone cameras.

10. Subscription Services for Regular Needs

Explanation: E-commerce platforms offer subscription models for recurring purchases, ensuring
convenience and potential cost savings.
Example: Platforms like Copia allow customers to subscribe for regular deliveries of household
essentials.

2. Influence on Market Competition

1. Lower Barriers to Entry for Businesses

Explanation: Digital platforms provide SMEs with access to a broader market without the need for
physical storefronts.

Example: Artisans can sell handmade crafts on platforms like Etsy, reaching both local and international
customers.

2. Increased Price Competition

Explanation: The transparency of online pricing forces businesses to competitively price their products.

Example: Multiple vendors selling similar products on Jumia must adjust prices to attract buyers.

3. Innovation in Marketing Strategies

Explanation: Businesses leverage digital marketing tools, social media, and influencer partnerships to
stand out.

Example: Fashion retailers use Instagram influencers to showcase their products, driving traffic to their
online stores.

4. Diversification of Sales Channels

Explanation: Companies operate across multiple platforms, including their own websites and third-party
marketplaces.

Example: A tech gadget store might sell products on its website, Jumia, and Kilimall simultaneously.

5. Enhanced Customer Service and Engagement

Explanation: Direct communication channels like chatbots and social media improve customer relations.

Example: Businesses use WhatsApp for Business to handle inquiries and provide support promptly.

6. Adoption of Advanced Technologies

Explanation: Utilizing AI, big data, and machine learning optimizes operations and personalizes customer
experiences.

Example: E-commerce platforms employ AI to recommend products and predict inventory needs.

7. Expansion into Rural Markets

Explanation: Digital platforms reach underserved areas, increasing competition and market penetration.

Example: Copia specializes in serving rural Kenyan consumers by delivering goods ordered online to local
collection points.

8. Strategic Partnerships and Collaborations

Explanation: Businesses form alliances to enhance service offerings and expand reach.

Example: E-commerce platforms partner with fintech companies to offer consumer financing options.

9. Focus on Niche Markets

Explanation: Specialized platforms cater to specific consumer segments, intensifying competition within
niches.

Example: Sky.Garden focuses on providing a marketplace for SMEs to sell unique products.

10. Regulatory Challenges and Compliance

Explanation: Businesses must navigate digital taxation and consumer protection laws, impacting
competitive strategies.

Example: The introduction of the Digital Service Tax in Kenya affects pricing and operational decisions
for online platforms.

References

1. Biwot, S. (n.d.). The rise of e-commerce and online shopping in Kenya. Sedi Kenya. The-rise-of-e-
commerce-and-online-shopping-in-kenya

2. Bizna Reporter. (2018, September 18). The rise of e-commerce in Kenya. Bizna Kenya.
3. Kevin. (2023, April 7). The state of e-commerce in Kenya in 2024: Trends and predictions. Truehost
Kenya.

4. Bergemann, D., & Bonatti, A. (2024). Data competition and digital platforms. American Economic
Review, 114(8), 2553–2595.

5. Coyle, D. (2018). Practical competition policy implications of digital platforms. Bennett Institute for
Public Policy.

6. Scott Morton, F. (2019). Digital platforms: Market structure and competition. CRESSE.