How collaboration is redefining Kenya's e-commerce playbook
Kenyan online traders are turning to collaboration, digital tools and cross-promotion to survive rising costs and weak demand, as e-commerce penetration and rural smartphone use accelerate nationwide.
As Kenya’s business environment becomes increasingly unforgiving, marked by rising operational costs and weakening consumer purchasing power, a quiet shift is taking place across the country’s entrepreneurial ecosystem.
Instead of competing head-on for the same shrinking pool of customers, more small and medium-sized enterprises are choosing collaboration.
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This is by cross-promoting complementary products and leveraging digital platforms as a survival and growth strategy in the fast-expanding e-commerce space.
For Mwangi Mahugu, the founder of Acacia Shade Furniture Limited, this approach is less about surrendering competitive advantage and more about expanding reach, sharing demand, and building resilient networks that thrive on trust.
Notably, the model is gaining traction, particularly among online traders, where visibility, speed and product range often matter more than exclusivity.
According to Mahugu, collaboration has become a practical response to the pressures facing businesses today.
By working within a network of furniture sellers who promote each other’s products, he notes that enterprises are not only staying afloat but also unlocking income streams that would otherwise remain out of reach.
“We operate as a network where each seller focuses on what they do best,” Mahugu said.
“If a customer approaches me looking for a coffee table that I don’t stock, I can source it from a partner and have it delivered seamlessly. Instead of losing the sale, the entire network benefits.”
He adds that this collective approach helps dilute cut-throat competition, especially in crowded urban markets where similar products often flood the same channels.
Trust, he admits, can be a concern when customers realise that a product is supplied by a different seller.
But transparency has become a core pillar of the model as invoices clearly indicate the original supplier, while delivery timelines and responsibilities are communicated upfront.
“We are essentially promoting each other’s businesses. If everyone sells the same products, the chances of walking away empty-handed are high. Collaboration gives the customer options and keeps the sale within the network.”
Mahugu’s entrepreneurial journey reflects the potential of this strategy.
Mwangi Mahugu, the founder of Acacia Shade Furniture Limited. (Photo: Handout)
Since launching his venture in 2019, after transitioning from a creative career as a writer and musician, his business has recorded steady growth.
He focuses on office furniture, including desks, workstations, partitions and boardroom fittings, while also serving a growing home-office segment.
Technology sits at the heart of this collaborative model.
Digital tools and online platforms have made it easier for traders to coordinate orders, manage inventories, and tap into a wider customer base at a time when the number of furniture sellers continues to rise.
Social media channels in particular are amplifying this momentum. On a good day, Mahugu receives up to ten orders through digital platforms, though volumes fluctuate.
Increased competition on the platforms has also pushed prices down, a trend Mahugu believes ultimately benefits consumers.
“Customers are getting quality products at much lower prices compared to traditional showrooms,” he noted.
The collaborative mindset has also opened doors to new partnerships.
By focusing on office furniture, Mahugu has connected with higher-end players and suppliers, including manufacturers of power tools, allowing him to support carpenters within his network and broaden his product offering.
Yet the digital shift is not without risks. Mahugu recalls losing valuable goods to online fraudsters after delivering items to a client who resold them and disappeared.
To mitigate such risks, he relies on digital invoicing and inventory apps that formalise transactions and improve accountability.
This collaborative business model is unfolding against a backdrop of rapid growth in Kenya’s e-commerce market.
Industry players project that online retail penetration will record double-digit growth over the next two years, driven by mobile technology and smartphone access.
Smartphone penetration in Kenya currently stands at about 70 to 75 per cent, with growing adoption in rural areas unlocking fresh demand for digital commerce.
According to Jumia’s East Africa regional CEO Vinod Goel, mobile internet and mobile money penetration are reshaping shopping habits, even as overall e-commerce adoption remains relatively low at three to four per cent.
Data from the Competition Authority of Kenya shows e-commerce penetration rising from 46.7 per cent earlier this year to a projected 53.6 per cent by year-end, with expectations that it will surpass 54 per cent next year.
Crucially, rural markets are emerging as the growth engine, accounting for more than half of e-commerce activity.
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