Effect Of E-Business Strategy On Performance Of Selected Supermarkets In Kisumu City, Kenya

ABSTRACT

A number of firms in the retail sector in Kenya have embraced electronic business strategies in an attempt to improve their profitability, sales turn over and efficiency. A report by Cytonn indicated that despite adoption of electronic business strategies, regional retailers are able to yield up to only 11.7% returns. African Consumer Insights report that the market penetration rate of retail chains is still low at a figure between 25% - 30%. Various challenges on supermarkets have also been reported despite the adaption of e-business for instance Uchumi supermarket has experienced frequent stock outs and operational challenges. Tuskys supermarket has also in a number of times experienced operational inconsistencies and some have also been shut down like Nakumatt supermarket mega plaza,Yattin supermarket, Ukwala and Pramukh supermarket just to mention a few. Kisumu is considered as one of the best towns to invest in, with the revival of the Kisumu ports the retailing market is expected to increase due to the access of imports and export within the region thus the study on retailing market specifically supermarket for evaluation of their survival in the market with the influence of e-business too. The existing research has not provided a clear link between adoption of electronic business strategy and performance of supermarkets hence this study sought to determine the effect of e-businesses strategy adoption and performance of supermarkets with specific focus on selected supermarkets operating within Kisumu city. The specific objectives of the study were to examine the relationship among e-payment, e-procurement, e-marketing and e-retailing on performance of supermarkets in Kisumu city. The study adopted the diffusion of innovation and socio-technical systems theories. The study used census with a target population of 100 but only 60 responded. The study obtained a reliability index of .775 thus the research instrument was considered reliable and valid. The study concluded that e-business strategies had effect on performance (R square = .930; p value