Kenya's Safaricom Eyes African Expansion
Kenya's Safaricom is reportedly eyeing expansion into other countries in east and west Africa where it sees a big opportunity in mobile money and e-commerce.
CEO Bob Collymore told the Financial Times this week that Safaricom is developing an e-commerce platform called Masoko. He said this would be like the service offered by Chinese e-commerce giant Alibaba, which combines e-commerce and mobile payments, rather than that of Amazon, which holds inventory and manages logistics.
The plan is to prove that Masoko works in Kenya before introducing it to other markets in the region. Collymore's aim is to move Safaricom Ltd. into "four or five" other African countries in the next two to three years, he told the newspaper.
The move will be funded by the Kenyan telecom business, which reported a 32% increase in sales in its recent fiscal year (ending March 2017), to 55 billion Kenyan shillings ($533 million), and saw pre-tax profits from M-Pesa rise 27%, to KES70.6 billion ($684 million).
The success of M-Pesa, Safaricom's world-famous mobile money platform, has fueled earnings growth for the operator in recent years.
Collymore said that UK-based Vodafone's sale of a 35% stake in Safaricom last month had "unshackled" his business. Vodafone Group plc (NYSE: VOD) had regarded anything outside Kenya as "Vodacom's territory," said Collymore, referring to the UK operator's pan-African subsidiary.
Vodafone continues to hold a small 5% stake in Safaricom.
— Iain Morris, News Editor, Light Reading