We consider the nonlinear interaction of finite amplitude kinetic Alfv¿n waves (KAW) with parametrically excited convective motions in the Earth's upper ionosphere, accounting for nonzero ion-Larmor radius effects. The generation of the convective cells is due to the Reynolds stresses of the Alfv¿n waves. These stresses are nonzero only when the perpendicular wavelengths of the kinetic Alfv¿n waves are of the order of the ion-Larmor radius. It is found that the wave vector of the fastest growing convective mode is perpendicular to that of the pump KAW. The instability growth rate is compared with those of other channels for the parametric decay of KAWs. Applications to satellite observations of KAWs in the auroral ionosphere are proposed, suggesting that convective cells produced by the parametric instability of KAWs can contribute to the turbulence in the plasma of the upper ionosphere.