Just imagined guiding the mkokoteni guys with a GPS system to supply groceries in the morning? Or being able to call one with an sms system

True there are opportunities in M-commerce ...who will take the baby steps and test the market..

@chessmaster that could be a good business. There is a lot of money to be made by simply cloning SA entrants into the Kenyan market, but running your version cheaply.

I don't think the big boys are concerned about the small fish when it comes to deliveries and distribution.

When MJ-safaricon started the big boys would "NOT" even imagine the small fish with a mobile phone,...same with Dr. mwangi equity's ATM where the Mbig Mboys would NOT allow you into the banking halls with gum boots..see this is where the cut is made where the small fish who are the majority are courted and made to feel big(remember peculiar Kenyans habit)

Looks like Nigerians already got it going on
http://www.jumia.com.ng/
In the Kenyan case mobile based catalogs and selections may work

It the peculiar Kenyan habit of things cheap-sms being one of them ..in some case 1 bob per sms ..whereas bundle are expensive ..so telling the small fish to buy bundles when he can get free sms package per day offers so even with wifi the uptake of internet usage will be less because to the small fish its expensive

Wow I was left out in this interesting conversation.
I have to still insist how Kenyan's interact with the internet is very different from developed countries.
The tools to successfully launch a great e commerce business are all there. We have great online payments, our courier firm business is one of the most developed and Posta is also waking up and trying to rise to the challenge everything is there.
Tie all the pieces together is what is lacking and the problem is that the techies think they are the ones to do it. The only people who can make sense and actually launch this is a proper enterprenuer whether the is a techie or not is not relevant.
Let me try and explain how I see how such a model would work.

You have a product whether you are selling through online or mobile catalogs is irrelevant and that is where the techie razmatazz stuff comes into play.

Now the first issue starts.How do you pay for the goods and service? It should be a mix of payment methods and this technologies are all live and working in Kenya from MPESA to VISA.

Second issue how do I get the goods. The infrastructure exist and it is either courier service or Posta. Courier services and G4S being the biggest has a huge footprint in Kenya. In large towns they have several pick up and drop off points that can be used to deliver goods or pick up goods. For example OLX would hold money in trust as the buyer delivers goods to be transported to the seller. Payment is only effected once proof of delivery or buyer acknowledges receipt. The techies can create links with the courier so as to provide a comprehensive list of pick up and drop off places. @Wanyee, forget GPS that is a techies wet dream and we aren't there yet. In future maybe.
G4S and Posta are more than willing to play ball and can even provide a fixed cost for delivery and the fixed cost can be very low provided you have volumes. I am speaking from experience where I actually negotiated a deal with G4S to deliver goods for the company i used to work for. We even shut down the transport department and increased areas we were serving.

But what do we have now is fake groupon services like Mocality, Rupu and Zetu. They have a huge sales force trying to get deals for them to sell online. The numbers are currently not enough and they don't do a great job. I have bought from Zetu(thoroughly disappointed) and Mocality (okay service).

The other e-commerce are auction sites, and online catalogs. None of them handle the money and depend on payment for services or advertising. Now this guys should close shop soon since they all have stupid business models.

To take ecommerce to the next level we need to sort out basics and the technology is not the basics. Basics are handling the cash and the handling of the goods. Focus on those currently online and the early adopters and scale up to the mid adopters and the laggards.

@tony stark - I agree especially on handling the goods.Thats where I think the major issue arises. Do you have more information on the courier services,I've become interested in that.Also once delivered do they facilitate home deliveries or thats up to the individual.

Why would you want home delivery. Office delivery makes sense.
Here is my logic people are away from home for most parts of the day when deliveries are being done. People will gladly collect from a nearby G4S point or post office for that matter during their lunch break or on their way home.
Office delivery also makes sense since there is always someone in the office and your gods can be signed for on your behalf if you are not there.

In our case they would deliver the products to an office during work hours. Our offices are mainly in the towns so delivery from the store was not bad. Home delivery is tricky due to the lack of labelled streets and apartments.

Stick to pick up and delivery points. It's cheaper and saner. They already do this in Russia where gods bought online are delivered to pick up points that can be any store!