In December 2023, Kenya unveiled its National E-Commerce Strategy, a pivotal initiative to fortify its position as a leading African digital economy. This comprehensive strategy aims to support the e-commerce industry and promote the use of safe and trusted online trade services across the country.
The strategy comes at a time when cloud computing is redefining the global marketplace. In Kenya, cloud computing technology is rapidly evolving, and e-commerce is gaining momentum. The Kenyan e-commerce market revenue is expected to reach USD 801.4 million by 2024 and show a compound annual growth rate of 14.2 per cent by 2028.
Kenya’s move to adopt a national e-commerce strategy underscores its proactive stance in capturing the vast opportunities presented by the digital economy. However, this rapid growth in cloud technology raises a critical question: Are there growing cybersecurity vulnerabilities that require increased vigilance?
Cloud computing plays a dual role in Kenya's e-commerce ecosystem—serving as an agent for innovation while also presenting implications for cybersecurity. Traditionally, launching an e-commerce platform required substantial upfront investment in IT infrastructure, including servers, storage, licenses, and software, which could be exceedingly costly for startups. Cloud computing has changed this dynamic by offering a pay-as-you-go model.
With cloud computing, startups and SMEs can access high-quality IT resources without significant capital expenditure. This enables them to focus on developing innovative products and services rather than worrying about IT infrastructure. Cloud-based solutions help e-commerce businesses in Kenya overcome traditional barriers to entry, such as high upfront costs and infrastructure limitations. By leveraging cloud services, startups and SMEs can rapidly deploy and scale their online operations, driving innovation and competition in the market.
Kenya's e-commerce sector has undergone remarkable growth due to increased internet penetration, rising smartphone usage, cutting-edge cloud solutions, and a growing middle class with more purchasing power. In 2023, the top five e-commerce stores in Kenya were mydawa.com, jumia.co.ke, phoneplacekenya.com, desertcart.co.ke, and copia.co.ke. These leading platforms commanded about 21 per cent of the e-commerce market share. However, the sector continues to grow, with other players like Wasoko (formerly Sokowatch) and Kilimall offering a wide range of products and services to consumers in East Africa.
Cloud computing has reformed market dynamics and consumer trust in the e-commerce sector. In Kenya, cloud technologies have democratized access to technology and leveled the playing field for all types of businesses. As a result, there’s increased growth, innovation, and competition in the e-commerce market nationwide.
Thanks to the scalability and affordability of cloud-based solutions, startups and SMEs can now compete with large corporations globally. Cloud computing enables online stores to maintain responsive and fast loading speeds even during periods of high traffic, preventing downtime that could hinder consumers from accessing products and services or making purchases.
Google research illustrates the critical impact of website speed on consumer behavior, suggesting that a 5-second delay increases the probability of bounce up to 90 per cent. Additionally, Google's search algorithms prioritise site speed, meaning slower websites might find themselves lower in search rankings, directly affecting their visibility and sales.
Furthermore, cloud computing enables real-time and valuable data analytics and insights into consumer behavior, preferences, and purchasing patterns. This empowers e-commerce companies to make informed decisions and adapt to changing market trends quickly. This data-driven approach to decision-making has developed more personalized experiences for consumers, driving customer satisfaction in the e-commerce sector.
Cloud computing also plays a crucial role in building and maintaining consumer trust by ensuring the security, reliability, and privacy of data transmitted and stored on cloud servers. Cloud service providers deploy advanced security measures to protect customer data from unauthorised access and cyber threats. Such reliability fosters trust among customers, who expect secure online shopping experiences. Moreover, cloud-based solutions enable e-commerce companies to comply with industry regulations and standards related to data protection and privacy.
E-commerce businesses integrated with banking systems and mobile money face security threats, including phishing, malware, and ransomware. Cyber attackers often target e-commerce sites through sophisticated techniques to steal sensitive data, disrupt operations, or defraud businesses and customers, making data protection and privacy central concerns.
Kenyan officials reported that over 1 billion cyber threats hit the nation in the final quarter of 2023—a massive jump from the 123 million cyber threats detected in the previous quarter. The number of cyber-attacks has increased across Africa, threatening digital growth.
With the growth and benefits of cloud technology, the cybersecurity segment is also evolving rapidly. Cyber threats are becoming more complex and widespread, and businesses have to stay one step ahead to effectively cope with them.
Navigating this landscape involves balancing the drive for innovation with the imperative to secure digital assets and customer data against increasing cyber threats. This dual approach and choice of a reliable cloud provider will not only protect e-commerce companies but also solidify customer trust, which is vital for sustained business growth in the digital era.
Victoria Kleinbort is the country manager for Kenya at Servercore
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