PARTNERSHIP

Safaricom increases e-commerce stakes after Alibaba Group deal

In Summary

• Online shoppers will now be able to pay for goods purchased on Aliexpress.com using M-Pesa.  

• The platform under Alibaba Group commands 46 per cent of Kenya's global online purchases. 

A customer waits to be served at an M-Pesa shop.
A customer waits to be served at an M-Pesa shop.
Image: MONICAH MWANGI

Safaricom is looking to expand its e-commerce reach in the country by providing mobile payment services on Aliexpress.com.

The firm on Tuesday announced it had partnered with the Chinese run online store under Alibaba Group, to use M-Pesa as a payment option.

This is set to boost the telco’s daily mobile money transactions which currently stand at 17 million or 25,000 transactions per minute, as more Kenyans lean towards online shopping driven by increased internet access.

“This partnership seeks to connect Kenyans to even more business opportunities by enabling them to seamlessly source, purchase and import goods from the world’s leading manufacturers,” Safaricom Chief customer officer Sylvia Mulinge said.

Under the deal, Ant Financial, which runs the portal’s payment services, will offer M-Pesa as one of the payment options with transactions denominated in the Kenyan shilling.


“The move especially targets micro-traders in the country who source goods and other supplies from manufacturers in China,” Mulinge said.

Kenya has undergone a mobile commerce boom driven by mobile penetration, increased smartphone adoption, and a mobile-first strategy that enables shoppers to pay for goods and services online through mobile money platforms.

Data by the Communication Authority shows e-commerce accounted for 76 per cent of total mobile money transfers at a value of Sh1.55 trillion between July and September last year. This was through 526.9 million transactions.

This has seen a shakeup in the country’s e-commerce sector with more online stores, both local and global, launching their products in Kenya to compete for the vast market share.

Currently, Aliexpress accounts for 46 per cent of Kenya’s total international online purchases, competing with eBay and Amazon.

Last November 2018, Safaricom launched M-Pesa Global aimed at tapping into remittance through a partnership with financial services firm, Western Union. The new service also encompasses PayPal integration, allowing customers to deposit from M-Pesa to PayPal and withdraw from their PayPal accounts to M-Pesa.



Mulinge said the new partnership with AliExpress will not affect the telco’s Masoko e-commerce platform but seeks to address small traders’ needs as it continues to expand M-PESA’s capabilities.

“Masoko is more of a Kenyan market place, we can’t ignore that consumers are shopping in more global places and we are just following where the customers are and still adopting innovation under Masoko,” she said

“The move especially targets micro-traders in the country who source goods and other supplies from manufacturers in China,” Mulinge said.

Kenya has undergone a mobile commerce boom driven by mobile penetration, increased smartphone adoption, and a mobile-first strategy that enables shoppers to pay for goods and services online through mobile money platforms.

Data by the Communication Authority shows e-commerce accounted for 76 per cent of total mobile money transfers at a value of Sh1.55 trillion between July and September last year. This was through 526.9 million transactions.

This has seen a shakeup in the country’s e-commerce sector with more online stores, both local and global, launching their products in Kenya to compete for the vast market share.

Currently, Aliexpress accounts for 46 per cent of Kenya’s total international online purchases, competing with eBay and Amazon.

Last November 2018, Safaricom launched M-Pesa Global aimed at tapping into remittance through a partnership with financial services firm, Western Union. The new service also encompasses PayPal integration, allowing customers to deposit from M-Pesa to PayPal and withdraw from their PayPal accounts to M-Pesa.

Mulinge said the new partnership with AliExpress will not affect the telco’s Masoko e-commerce platform but seeks to address small traders’ needs as it continues to expand M-PESA’s capabilities.

“Masoko is more of a Kenyan market place, we can’t ignore that consumers are shopping in more global places and we are just following where the customers are and still adopting innovation under Masoko,” she said