How to Start an eCommerce Marketplace in Kenya?

Do you want to start a marketplace in Kenya? Then you must be knowing that Kenya is one of the growing eCommerce ecosystems in Africa.

Moreover, eCommerce in Kenya has expanded exceptionally over the last few years, primarily among small and medium businesses.

There has never been a right time to start an online business in Kenya than now to see an ample amount of growth in online sales.

Because now Kenya’s eCommerce sector is expanding and experiencing massive growth. Furthermore, it is up as a global competitor in the e-commerce space.

Henceforth, online multi-vendors are predicting and finding enormous growth scope and opportunities to uplift Kenya’s eCommerce industry to the next level.

In this smart-technological era, online buying and selling have been easier through live streaming, and social commerce. The ongoing pandemic scenario has changed the business structure of the entire world.

Online presence is a must for every retailer. Almost everything is now digitalized. Kenya is obviously not left behind in the tech world.

Entrepreneurs in Kenya now want to run the business with no geographical boundaries or physical restrictions.

Kenya’s e-market is still developing and players are entering the e-Commerce market due to the high turnover. Online turnover is 20 times higher than traditional retail stores.

But many Kenyans still do not trust buying goods online so online payment options are still unexplored.

Hence this is the most suitable time to enter this market and start an eCommerce marketplace in Kenya. Let the traditional vendors join your marketplace to increase online shopping for product demand.

This will help the marketplace owner to have enough variety of products to attract more customers for shopping.

You can go through more of Webkul customer showcase success stories. And, get to know how our clients have benefitted using Webkul’s marketplace solutions.

For an e-commerce marketplace business, you need to consider certain other factors based on the country you will be starting your e-commerce marketplace.

Just like the ecommerce website budget varies across countries. Similarly, there are certain additional requirements and legal regulations that need to consider if you are planning to start an e-commerce marketplace in Kenya.

Domain Name

• Choose a unique and simple domain name easy to remember.
• Do not use an existing well-known trademark.
• It is also essential to endeavour trademark protection for the chosen domain name and the website logo.

Data Protection Act

To run a successful eCommerce marketplace in Kenya e-owner must adhere to the guidelines of Kenya’s Data Protection Act. As a website owner, you need to maintain a privacy policy to gather any personal information.

Consumer Protection

Consumers are the key to thriving in the market that’s why online marketplace owners are much concerned about consumer protection against unfair practices.

Copyright

As per Wikipedia, a Copyright is a type of intellectual property that gives its owner the exclusive right to make copies of creative work, usually for a limited time.

As an online marketplace owner, you must review the entire website and not copy any materials from others.

Terms and Conditions

Online trading develops a relationship between business owners and customers. Hence it is a must to protect yourself and limit legal liability by showing Terms and Conditions on your website.

If you are planning to have a Marketplace in Kenya’s region then the following are the top leaders:

Jumia

Kilimall

FiveSok

So, being a new player in the e-Commerce marketplace industry one can take reference from the above competitors.

In such a cutthroat competitive era, the major question is What do you need to start an e-commerce marketplace?

If you have the plan to start an eCommerce Marketplace in Kenya, then, in that case, you’ll be requiring several components:

eCommerce Platform

The prime concern for entrepreneurs to start an eCommerce marketplace is to decide which platform will be the right choice.

Drafting out a few to help you to pick the one suitable for your e-business – Bagisto, Magento 2, OpenCart, or WooCommerce.

Web Hosting Service

Hosting is an essential component for setting up an eCommerce marketplace. Check the below-specified list of cloud-based services through which the hosting can be achieved:

• Amazon AWS Stack
• Google Cloud
• Microsoft Azure StackSSL, wherein the requirement arises of the cloud support team, which Webkul Offers.

Domain Purchase

A domain name should be unique because it signifies the registration of the domain to claim space on the internet. This registered name is used by the eCommerce business owner on the websites as well as in e-mail.

Inventory Management

Inventory/Stock management is the most complex part when it comes to setting up a marketplace. Usually, the stock of goods and services is massive in the marketplace.

Thus, a reliable inventory management system is the most required feature of a marketplace. If it is not managed in a proper way then it can become the biggest challenge to manage the records of inventory depleting and incrementing.

Secure Payment Options

The main part of any online store is the payment procedure. It must be fast, reliable, and super convenient for the shoppers to win the customers’ trust in Kenya.

Any eCommerce business achieves success when it supports multiple payment methods to allow an effortless transaction.

Shipping Methods

Shipment is also an important part of any eCommerce business. It has to be handled in the right way with proper guidance.

There are various shipping providers available in the market. Select the best-suited shipping method for your business and customers.

Above are a few of the common considerations, if you are planning to start an e-commerce marketplace. No matter in which Geo-location you will start your online business.

However, if you wish to extend your marketplace to an advanced marketplace, then you can have a look at Webkul custom e-commerce development services for the best solution.

Also, if you want to have your marketplace for a specific location, then you can opt for a hyperlocal marketplace. For more details please check What is Hyperlocal?

The Hyperlocal Marketplace is advancing e-commerce for both merchants and consumers.

Have a look at some of the benefits of the hyperlocal marketplace:

• The hyperlocal marketplace raises the demand for local stores in a particular geographical region.
• It helps in providing a better shopping experience to the buyers.
• Improves the delivery procedure of purchased products by the customers.
• Also, it helps in developing the sales and revenue of the retailers to grow their business.

Best Payment Gateways in Kenya for Marketplace

There are plenty of payment gateway providers you can choose any of them based on your business need for the marketplace startup in Kenya.

There are a few recommended payment gateways named M-Pesa, PayGate, PayPal, Stripe, Net Billing and, Paystack are best to use in Kenya & Africa.

M-Pesa

M-Pesa has got massive success in the online market of Kenya and Africa. So this is also a reliable payment gateway to go ahead with if you’re running your marketplace in Kenya or are willing to start the new one.

PayPal

PayPal is the world’s most popular and most adapted payment gateway for any merchant dealing in any business online payment process. Without thinking much you can go ahead with PayPal it is a highly accepted payment gateway in eyes of Kenyans.

Even you can use Multi-Vendor PayPal Commerce to integrate PayPal Payment Method for their customers. This module incorporates the Instant and Delayed disbursement modes (also known as, PayPal Commerce).

Even the sellers can integrate PayPal for their customers only after authenticating with PayPal. Both the admin and the sellers can process the refunds for the customers in their respective panels.

Stripe

Stripe is also a stable payment gateway in Kenya for marketplace startups. Even this payment gateway is also accepted in Kenya.

Marketplace Stripe Payment Gateway will help the merchant allow the customers to do a checkout and make an online payment using the Stripe Connect gateway.

It makes online payment processing much easier to manage and also helps in returning order refunds easily. With Stripe’s secure interface, it provides a much safer transaction environment between the payer and payee.

Which one is better to use in Kenya, PayPal, Mangopay or Stripe payment gateway?

PayPal is a top-class payment gateway for any business to go ahead without any hesitation.

Also, by having access to a U.S. Stripe account, African startups will be able to instantly accept payments in over 130 currencies and a number of alternative payment methods.

Moreover, Mangopay has a specific list of countries where it is authorized to process payments and Kenya is there on the list hence Mangopay Payment Gateway solution is also a better choice to proceed ahead.

Kilimall the top-selling marketplace in Kenya is allowing shoppers to pay for the purchase through various payment methods. Shoppers can choose any of one for making the payment at their convenience:

• M-Pesa Express
• M-Pesa
• Airtel
• Equity
• Debit/Credit Card

Payment is the most significant and sensitive part of the eCommerce marketplace. However, let’s have a look here, at how payment processing is done in the marketplace.

Default Payment Flow

In the Default Payment Flow, the payment made by the customer for their purchases will go directly to the store owner’s bank account.

And then, it’s their responsibility to pay the respective sellers out of the e-commerce platform such as NEFT, cheque, bank transfer, etc.

Split Payment

However, Split Payment Flow allows splitting the payment made by the customer as per the orders and commissions among multiple vendors. That too from the single transaction made by the customer.

In split payment, the payment will automatically split between the seller and the admin as per the commission set by the admin in the marketplace configuration.

The seller will receive the payment in its linked payment account concerning the payment gateway which the seller is using. And the admin will get the commission in their payment account.

After the payment, shipping is the most essential part of any eCommerce business. The eCommerce owner needs to handle this part of online business with sensibility.

After the customer has done the payment of their order, they will look for their products to deliver on time.

Henceforth, Providing convenient shipping service to your customer is equally important as providing payment options.

Henceforth, you need to choose logistic options that charge a reasonable price to ship the products depending on the size and weight of the product.

Moreover, the best shipping is required because the customers will not prefer to purchase from your store if the delivery is delayed. Also, if they find the shipping charges too high.

Summing Up!

If you are willing to spread your eCommerce business, then there has never been a better time to be in e-commerce in Kenya. It is peak time that you invest in Kenya and look for booming growth.

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