Kenya stands at a pivotal moment in its digital economy journey, with e-commerce poised to become a major driver of growth and inclusion. Despite strong digital foundations—57 million people, 48% internet penetration, over 42 million smartphones, and 45 million mobile money accounts—online retail sales represent just 2–5% of total retail, far below global leaders.

Digital commerce’s potential extends beyond shopping. It is connecting rural populations, which make up nearly 70% of Kenyans, to new markets and services. For example, 60% of orders on Jumia originate from secondary cities and rural areas, demonstrating expanding digital participation.

Small and medium enterprises (SMEs) are also benefiting. They now comprise 60% of sellers on Jumia, up from 40%, supporting over 80,000 livelihoods. Digital platforms enable these businesses to formalise operations and access broader markets.

Policy priorities to unlock e-commerce potential

  • Establish a modern regulatory framework: Regulations must reflect the role of digital marketplaces as facilitators of transactions, logistics, and payments between independent buyers and sellers.
  • Encourage SME formalisation: Policies should support the transition of informal businesses to the formal economy, broadening the tax base and improving compliance.
  • Ensure a level playing field: Local businesses investing in Kenya should compete fairly against foreign operators with limited local presence.
  • Invest in infrastructure and logistics: Beyond connectivity, efficient delivery systems, reliable payments, and affordable access are crucial for expanding e-commerce beyond urban centers.
  • Institutionalise public-private dialogue: Regular consultations between government and industry are needed to keep pace with rapid technological changes.

Kenya’s success with mobile money demonstrates the power of aligning innovation with enabling regulation. The country now faces a similar crossroads with e-commerce. With millions of new online consumers and growing SME participation, the right policy choices will determine whether Kenya leads Africa’s digital commerce economy or falls behind as investment flows elsewhere.