Since its launch in December 2010, Rupu has become Kenya’s most successful version of the US website Groupon. The site offers daily deals at 50-90% off the usual price on the premise of group-buying, where a minimum amount of people have to sign up for the deal in order in order to claim the benefits. Rupu offers these deals in Nairobi and Mombasa, and will possibly be expanding to Zanzibar in the near future.

Ben Maina, CEO of Rupu, told Think Africa Press that in the website’s first six months “Rupu has managed to feature slightly over 200 deals from over 150 businesses that operate in different industries. In the process we have sold over 3,000 coupons and have saved our subscribers just under Ksh 5 million” ($56,333).

The original Groupon site was launched in the US in late 2008 and has quickly expanded to now operate in 43 countries. It serves an estimated 50 million customers worldwide. Rupu is closely modelled on Groupon but has been adjusted slightly to serve its Kenyan market. While consumers in Europe and America pay mainly by credit or debit card and PayPal, Rupu customers are more likely to use M-Pesa, which sends payments through mobile phones. Maina explains that Rupu has spent time “making the purchasing process as user-friendly as possible, by integrating local mobile payment methods”.

Kenya’s internet penetration reaches around  25% of the country’s population, standing at around 10.2 million people, with a much higher concentration in the cities. While Kenya is fortunate to be home to four undersea fibre-optic cables, mobile phones account for a large number of internet users and Rupu has admitted that at present it is not reaching “the maximum number of consumers”. Making the site more accessible for Kenya’s dynamic mobile phone space will be key to tapping into the larger market of potential Rupu users.

Rupu isn’t without its competitors. The most successful of these is Zetu, which was launched shortly before Rupu in 2010. Based on the same concept, Zetu also offers a wide range of daily deals, but Rupu has outstripped its rivals by being adaptable and able to respond to its users. According to Maina, daily deals were launched in Mombasa in June 2011 as a result of “growing demand from would-be subscribers located in the city”. In February 2011, a partnership was announced with a similar website, EatOut, which offers restaurant deals, as customers were regularly asking for restaurant coupons. The first restaurant to utilise the partnership between Rupu and EatOut was the Sankara Hotel in Nairobi, which wanted to dispel its image of being too expensive for the average Kenyan.

Rupu sees its role as introducing people to businesses and vice versa, and while daily deal websites undoubtedly expose customers to businesses they would not normally use, there is an issue of accessibility and sustainability. A legitimate concern for all businesses advertising on Groupon-type websites is whether or not deal buyers will be returning customers who create meaningful profits in the long term. The Sankara Hotel may have attracted swathes of restaurant-goers in the short term, but can Rupu’s customers who earn an average Kenyan wage afford the services when the 50-90% discount rate is not provided?

This, of course, is not just a worry in Kenya, but is a consideration for all cities where Groupon-type websites operate.  Ben Maina has admitted that as Rupu posts multiple deals on a daily basis Kenyans with little disposable income probably cannot afford to keep buying on a regular basis, meaning the majority of the buyers have greater purchasing power. Recent estimates released by the African Development Bank, 44.9% of the country’s population have per capita daily consumption of between $2 and $20. If this is the case and Rupu continues to consolidate itself in urban centres such as Nairobi and Mombasa, it may have a more soluble consumer base than outsiders might at first assume.

Perhaps the challenge to Rupu isn’t accessibility in terms of social mobility, but in terms of internet connectivity. For the time being, efforts to attract new customers are focused on the mobile phone market, but Rupu is just one success story in a much larger trend of technological innovation in Kenya. Government initiatives such as  Vision 2030 look set to turn Kenya into a middle-income country in the next two decades. Kenya has also been selected as one of five countries worldwide to become an incubation centre to promote a knowledge-based economy. The three founders of Rupu, businessman Munyutu Waigi and site builders Charles Kithika and Joshua Musau, were nurtured in the iHub, another initiative which provides an incubating environment for rising stars in the country’s technology field.

Kenya could be on the way to creating a “Silicon Savannah” with the building of the Konza Technology City. This will create a $7 billion “technopolis” and could put Kenya on a par with India to be one of the world’s largest business outsourcing centres. Recognition of Kenya’s status as a rising software development and technology hub, along with the creation of networks such as AfriLabs, are encouraging for websites such as Rupu, who will depend on being able to expand throughout Kenya, and should attract foreign investors to the industry due to its cheaper prices.

While Vision 2030 is still in the early stages, a knowledge-based economy is a very achievable aim for Kenya, which appears to be becoming entrenched as an East African software development and technology hub. Rupu has succeeded by taking the time to consolidate its new ventures and, so long as it can tap further into the potential mobile phone-operated market, it looks set to continue expanding.