Kenya's Retail Giants Battle as Online Shopping Disrupts Mall Traffic

The numbers coming out of Kenya's leading shopping malls tell an uncomfortable story for bricks-and-mortar retail. According to Knight Frank Kenya's mid-year retail property report, average daily foot traffic at Nairobi's five anchor malls — Two Rivers, Garden City, The Hub Karen, Westgate, and Junction — fell by between 12% and 18% in the first half of 2026 compared with the same period in 2025. The declines are being attributed to a structural shift in shopping behaviour accelerated by the post-pandemic habituation to digital commerce and now entrenched among Kenya's urban middle class.

Jumia Kenya, the continent's largest e-commerce platform, reported a 46% year-on-year increase in Kenyan gross merchandise value in the first quarter of 2026, the sharpest quarterly growth in its Kenya operations since 2020. Jiji, the classifieds and marketplace platform, says its daily active users in Kenya exceeded 800,000 for the first time in April. And Kilimall, the Chinese-founded Kenyan marketplace, has expanded its one-hour delivery service to cover all of Nairobi's 17 sub-counties, making same-session fulfilment a realistic proposition for the first time.

Social Commerce: The Disruptor Within the Disruptor

More disruptive than the established platforms may be the informal social commerce ecosystem that has mushroomed on WhatsApp, TikTok, and Instagram. An estimated 85,000 Kenyan micro-merchants now operate primarily through social media storefronts, selling everything from imported Korean skincare to locally made leather goods, with Safaricom's M-Pesa providing near-frictionless payment and neighbourhood motorbike courier networks handling last-mile delivery, often within two hours.

"The conventional retail model assumed that brand discovery, product comparison, and purchase all happened in the same physical space," said digital commerce analyst Grace Murimi of Nairobi-based consultancy Orbit Digital. "Social commerce has collapsed those steps into a single Instagram reel. The customer sees a product, asks about it in the DMs, pays via M-Pesa, and has it at their door before they've left the sofa. The mall simply cannot compete on that experience."

The social commerce surge has been turbocharged by Safaricom's 5G rollout, which by mid-2026 covers approximately 72% of Kenya's urban population. High-bandwidth connectivity means that live-stream shopping — popularised in China and now taking hold in Kenya — is technically viable for middle-class Kenyan consumers for the first time. Several Nairobi-based creators have turned live-stream product drops into commercially significant events, with single sessions generating millions of shillings in sales.

How the Retail Giants Are Responding

Naivas Supermarkets, Kenya's largest grocery chain by number of outlets, is investing Ksh 1.8 billion in its digital infrastructure after its own app-based delivery service, Naivas Online, saw a 78% increase in orders in 2025. The chain has partnered with Glovo and Jumia Food to extend delivery reach beyond its own logistics network and is piloting automated micro-fulfilment centres within three of its Nairobi stores to improve pick-and-pack speed for digital orders.

Quickmart, Naivas's closest competitor, has taken a different tack, doubling down on the in-store experience by expanding fresh food counters, adding pharmacy and wellness sections, and hosting experiential events — cooking demonstrations, children's activity corners — designed to give shoppers a reason to visit that a screen cannot replicate. "We don't think physical retail is dying," said Quickmart CEO Peter Kang'arua. "We think boring physical retail is dying. If you give people a genuinely enjoyable place to be, they will come."

Mall owners are also pivoting. Two Rivers Development director Mucai Kunyiha told ZaKenya.com that the mall had converted 8,000 square metres of former anchor-store space into a mixed-use configuration combining co-working facilities, an entertainment arena hosting e-sports tournaments, and a food hall with 22 local food brands. Footfall in the new food hall zone is up 31% since it opened, even as the wider mall's traffic softens. "The future of the mall is as an experience destination, not a shopping destination," Kunyiha said. "The distinction matters enormously for how we curate our tenant mix."

Employment and Tax Implications

The retail transition is generating an employment debate. Traditional retail employs an estimated 380,000 Kenyans formally and supports a further 600,000 in informal supply chains. While e-commerce creates jobs in logistics, warehousing, and technology, the net employment arithmetic of the structural shift is contested. KRA has also intensified its focus on taxing digital transactions, extending VAT obligations to social media sellers with annual turnover above Ksh 5 million as part of its IMF-conditioned revenue mobilisation push. The measure has been controversial, with small traders arguing that the threshold is too low and the compliance burden disproportionate for micro-businesses.