The boda boda sector has emerged as one of the key sectors driving uptake of the buy-now-pay later models for devices and appliances.
The model according to industry players has skyrocketed in popularity, especially among young and low-income consumers who may not have ready access to traditional credit.
The 2022 insights from Samsung show that bodaboda’s and small vendors account for the largest share of the pay later model for its entry level devices.
As the cost of living increases, some shoppers have been forced to start breaking up payments on essentials, rather than just big-ticket items like electronics.
Corporate marketing manager for Samsung East Africa, Nyawira Muraguri, says that ride and food hailing apps like Glovo have also been driving the uptake of smartphones as drivers look to expand their markets.
“In 2021 an estimated 70 per cent of buyers opted for cash payments with the remaining settling in for the instalment payments,” said Nyawira.
She however notes that despite the lower band recording the highest numbers in terms of the buy now pay later models, a majority of Kenyans are opting for the midrange devices of between Sh25,000 and Sh50,000.
The industry players foresee the instalment payments growing following the recently effected taxes on electronics imports that have been passed on to the consumers.
The firms product marketing manager for East Africa, Rehema Nyambura, said with the average Kenyan earning a daily wage, it has become paramount for companies to develop flexible payment options that complement the daily life of the customers, thus driving user accessibility in the long-term.
According to market intelligence firm IDC, the entry level smartphones from the lower price band of below $100 (Sh13,600) recorded reduced shipments declined year-on-year, from 41.2 per cent in Q4 2021, to 28.6 percent in Q4 2022.
This was driven by the fact that venders to take advantage of higher profit margins in the other categories, shifting their portfolios to the mid-level price band of between $100 to $200(Sh13600 to Sh27,300).
The share of shipments from this band increasing to 55.3 percent, up from 41.0 percent.
IDC senior research manager Ramazan Yavuz says inflation is expected to hurt the smartphone market this year and the recovery will begin only in the final quarter of 2023.
With the challenges currently in the market, the firm says the rapid transition to smartphones will continue, enabled by mobile financing schemes such as M-KOPA and Easy-Pay that help consumers to purchase new devices even as prices continue to rise.
"As economic uncertainty diminishes, vendors bring price volatility under control, and supply shortages come to an end," says Ramazan Yavuz, a senior research manager at IDC.
In 2023, IDC expects Kenya's smartphone market to remain relatively flat, with shipments growing by just 1.4 per cent.
