Implications of the on-demand economy in Kenya

A Kenyan 18-year-old has more in common with a Chinese agemate than with his own parents, claimed a recent consumer insights report.

Hyperbole aside, there’s an important truth here: the way in which youth experience the world, driven by the internet and new technology, is similar no matter where you’re from, and this is fundamentally different to the ways any previous generation experienced life.

There is a growing group of slightly older consumers who are also experiencing life in a new way. Urban professionals are busy, connected and always in a rush.

They are seeking efficiency and convenience in their lives and they are looking for help. 40-50 percent of urban professionals are willing to spend more on services that help them to make better use of their time, and they are the driving force behind a new multi-billion dollar economy.

Over the past few years, this ‘on-demand economy’ has become increasingly important globally with Kenya an important hub in Africa.

Before diving into this, I’d like to hit the rewind button and look at the music industry. It was one of the first industries globally to connect with consumers on demand. I started my first job at EMI Music in 2003 and in the same year, iTunes music store launched.

This was the first mainstream legal store for purchasing digital music and a really important moment in the evolution of the on-demand economy. Before this point, if you wanted to purchase a song, you had to take a bus to a record store and buy a full CD album. With iTunes, consumers could now make a purchase from the comfort of their home and consume it instantly.

Fast forward to 2019 and consumers have come to expect the same convenience and instant gratification around urban services and physical products. For a few years now, people have become accustomed to using services to request a ride on their phone and achieve real world satisfaction within minutes.

Instant gratification around physical products is still quite new but it’s happening now, and there’s nowhere more popular for these services than cities with terrible traffic. No one wants to sit in a traffic jam to go to a shop. But neither do people want to wait days for a standard ecommerce delivery, often a scheduled delivery slot later in the day.

Several companies have entered Nairobi recently to cater to these consumer trends. My Dawa delivers pharmaceutical products in minutes. Glovo allows users to order anything, from any store in Nairobi and it will deliver the product to you immediately. Whether hot food for lunch, the groceries you need to cook dinner in an hour, a present for a loved one, or a courier to collect mandazi from their favourite kibanda.

The on-demand economy is opening up incredible opportunities for traditional businesses to engage new customers. To leverage these new opportunities, businesses need to think about consumers in a new way. Where are consumers now making their purchasing decisions? In the kitchen preparing for a dinner party?

The writer is General Manager of Glovo Kenya.