Safaricom sets up online sales portal as net profit hits Sh26.2bn
Telecommunications firm Safaricom has established an online sales platform in a move expected to roil Kenya’s fast-growing e-commerce market.
The platform, known as Masoko, Kiswahili for markets, is modelled after retail e-commerce giants Alibaba (Chinese) and Amazon (US). It is currently undergoing internal testing ahead of rollout later this month, according to people familiar with the matter.
It will ride on Safaricom’s successful mobile money platform, M-Pesa and will target the fast mushrooming formal retail and informal online trading in Kenya.
Kenya’s e-commerce sector is currently dominated by brands such as Jumia, Kilimall, OLX, Pigiame, among others. Safaricom is expected to face stiff competition from market leader Jumia which boasts of 5,000 vendors and about 500,000 products listed on its e-commerce site four years after its launch.
Masoko will start with 200 vendors and about 30,000 consumer goods ranging from electronics to food and will provide a platform for merchants to trade goods on social media sites.
“Kenya has a huge untapped potential for e-commerce,” Safaricom chief financial officer Sateesh Kamath said at the company’s investor briefing in Nairobi Friday.
“To start with Kenya has a large number of customers with access to high speed internet through Safaricom’s vast and efficient network”.
Mr Kamath, who is sitting in for Safaricom CEO Bob Collymore who has taken sick leave, did not give the timelines for its roll out.
“We believe this market has the potential to grow multiple times in the next few years,” he added.
The telecoms operator defied economic slowdown to announce a 9.5 per cent increase in after-tax profit to Sh26.2 billion for the six months ended September 30.
Mr Kamath said the performance was boosted by a strong performance by M-Pesa and data while traditional services such as voice remained resilient.
M-Pesa revenues grew by 16.2 per cent to Sh30.05 billion in the period while data income rose from Sh13.4 billion to Sh17.55 billion. Voice revenue, which is still Safaricom’s biggest income stream, grew from Sh45.7 billion to Sh47.35 billion while messaging revenue rose 3.4 per cent to Sh8.92 billion. Total revenues jumped 12.1 per cent to Sh114.43 billion in the half year period.
“M-Pesa and Mobile data are becoming the engines of growth,” said Mr Kamath at the investor briefing.
Yesterday, chairman Nicholas Ng’ang’a urged an end to speculation over Mr Collymore’s health, whom he said went for specialised medical attention abroad on the advice of his doctors.
Mr Ng’ang’a said Collymore’s absence for “a few months” leaves no vacuum at the company.
“Bob’s style of management is very strong. He’s empowered managers adequately hence as far as the company itself is concerned it’s in strong hands,” said Mr Ng’ang’a.
The nature of Mr Collymore’s sickness has not been disclosed a week after the company announced he would take leave.