Electronic
business, commonly known as e-business, refers to the conduct of business
activities, such as buying, selling, and exchanging of products, services, or
information over electronic platforms such as the internet. E-business is
rapidly gaining popularity as it provides businesses with an efficient,
cost-effective, and convenient way to reach customers and expand their
operations.
China
is a global leader in e-commerce, with its internet penetration rate reaching
54.3% in 2020, according to the China Internet Network Information Center
(CNNIC). On the other hand, Kenya, a developing country in East Africa, has
also embraced e-commerce, with the sector experiencing rapid growth in recent
years, driven by increasing internet and mobile phone penetration.
In
this paper, we will examine the state of e-commerce in China and Kenya, and the
potential for electronic business between the two countries.
State
of E-commerce in China
China's
e-commerce industry has grown rapidly in recent years, driven by the country's
massive internet user base, which reached 989 million in 2020. This has created
a fertile ground for online businesses, with e-commerce sales in China reaching
$2.3 trillion in 2020, according to Statista.
The
Chinese e-commerce market is dominated by two major players, Alibaba and
JD.com, which account for over 80% of online retail sales in the country.
Alibaba's Taobao and Tmall platforms have a combined market share of over 60%,
while JD.com has a market share of 20%. These two platforms offer a wide range
of products, including consumer electronics, fashion, home appliances, and
groceries, among others.
In
addition to online retail, China's e-commerce industry has expanded to include
other sectors, such as online travel, online education, and online healthcare,
among others. For instance, the online travel sector has been growing rapidly
in China, with players such as Ctrip and Qunar dominating the market. According
to Statista, online travel sales in China reached $114.5 billion in 2020.
Moreover,
China's e-commerce industry has been boosted by the government's favorable
policies, such as tax incentives, subsidies, and investments in infrastructure.
The government has also implemented regulations aimed at protecting consumers,
such as the E-commerce Law, which came into effect in 2019. The law requires
e-commerce platforms to disclose information about sellers and their products,
and to take measures to protect consumers' personal information and prevent
fraud.
State
of E-commerce in Kenya
Kenya's
e-commerce industry is still in its early stages but has been growing rapidly
in recent years, driven by increasing internet and mobile phone penetration.
According to the Communications Authority of Kenya, internet penetration in
Kenya stood at 43.3% in 2020, while mobile phone penetration was at 114.8%.
The
Kenyan e-commerce market is dominated by a few players, such as Jumia,
Kilimall, and Masoko, which offer a range of products, including electronics,
fashion, and household items, among others. Jumia, for instance, is the largest
e-commerce platform in Kenya, with a market share of over 80%. The platform has
also expanded to other African countries, such as Nigeria, Egypt, and Morocco.
Moreover,
Kenya's e-commerce industry has been boosted by the government's efforts to
promote digital entrepreneurship and innovation, such as the creation of the
Kenya ICT Authority and the establishment of technology hubs in various parts
of the country. The government has also implemented policies aimed at promoting
e-commerce, such as the removal of taxes on mobile money transactions, which
has made it easier and cheaper for consumers to make online payments.
There is a significant potential for electronic business
(e-business) between China and Kenya, driven by several factors.
Firstly,
China is one of the world's largest e-commerce markets, with a growing middle
class and an increasing demand for high-quality goods and services. Kenya, on
the other hand, has a fast-growing e-commerce industry, with a large number of
tech-savvy consumers.
Secondly,
China is Kenya's largest trading partner, with bilateral trade between the two
countries increasing steadily over the years. This presents an opportunity for
Chinese companies to tap into Kenya's growing e-commerce market and expand
their businesses in the country.
Thirdly,
Kenya is strategically located in East Africa, providing a gateway to other
African markets. This makes it an attractive destination for Chinese companies
looking to expand their businesses across the continent.
Fourthly,
both China and Kenya have made significant investments in their digital
infrastructure in recent years. This has resulted in improved connectivity,
increased mobile penetration, and the adoption of digital payment systems,
making e-commerce more accessible and convenient for consumers and businesses
alike.
Finally,
there is a growing interest in cross-border e-commerce between China and
Africa, with the Chinese government announcing plans to support the development
of e-commerce in Africa. This presents an opportunity for Kenyan businesses to
access the Chinese market and vice versa.
In conclusion, the potential for e-business between China and Kenya is significant, driven by a growing demand for high-quality goods and services, strategic location, improved digital infrastructure, and a growing interest in cross-border e-commerce.
