Local firms including East Africa Online Transport Agency which uses the internet to link trucks and people who want to transport cargo have reaped the benefits of the digital disruption.
Their continued growth and interest in technology adoption has been at the forefront of warming up the market to endless possibilities of technology as well as operating remotely.
Technology has been the biggest disrupter of business and industry not only in Kenya but across the globe over the recent years.
When M-Pesa arrived in Kenya over a decade ago, the financial sector had to adapt and adopt or risk being swept aside by the revolutionary change. Uber came into the market with the e-hailing idea that sent the Kenyan taxi business into disarray, creating and destroying jobs all at the same time.
These innovations were initially perceived negatively, but the positive impact they have had has led to them being embraced widely. For instance, initially M-Pesa was considered a bank killer, but the mobile financial platform has been one of the biggest players in pushing a cashless economy, facilitating payments and boosting financial inclusion.
“Digital technology is not just about high-tech start-ups like Netflix or Uber – it is also creating exciting opportunities for small and medium businesses and entrepreneurs to reinvent themselves,” said Nikki Summers Regional Director for Sage in East Africa.
According to Ms Summers, the best disruptive ideas are the ones that are tailored to the needs and conditions of the market.
“One good example is how mobile money has enabled people to pay each other in Kenya, increasing financial inclusion in a country where penetration of formal financial services was low in the past.
Another instance is the mobile phone, which has brought affordable internet access and telecommunications to nearly every country in Africa, leapfrogging landline infrastructure and making technology affordable to a mass market,” she says.
Businesses such as Kopo Kopo, Tala and Branch have been built on the backbone of digital disruption, using the new available technology to offer financial services and loans to those underserved by traditional providers.
“Falling smartphone costs, combined with increased deployment of fibre, 3G and 4G LTE networks, are helping to accelerate digital transformation across the region,” says Ms Summers.
Research firm Ovum forecasts that there will be 32 million LTE subscriptions in Kenya, Tanzania and Uganda by 2022, while smartphone connections will be 108 million.
“The East African region has made great progress in broadband connectivity over the last few years, and this has unlocked great potential in digital services segment, including mobile financial services, digital media as well as enterprise services,” said Danson Njue, research analyst, Middle East and Africa at Ovum.
According to Ms Summers, in a tight economy, small and medium business owners welcome any way to reduce costs without compromising on quality and service. Many technology services allow them to meet this goal.
For example, fintech can make it cheaper to take and process payments, ride-hailing services are an affordable alternative to taxis, and accommodation sharing sites are often more affordable than booking a business hotel. Individuals and small business owners now have the vast opportunities to take advantage of digitisation.
Youtube stars including Joanna Kinuthia or comedian Njugush, who last week received a silver play button from Youtube for 100,000 subscribers on his channel, have found a new platform to make money and sell their brands. This ten years ago was not an option in Kenya.
Businesses such as Showmax, Netflix and other over-the-top content producers have found ways of reaching the masses beyond home country borders without incurring extra costs.
Jesse Muiru’s platform SereneStudy uses the cloud to provide education, lessons through class notes, audio and video lessons, past papers and exams that are relevant to primary and secondary schools pupils.
Research firm GFK says in its ViewScape Africa study that 97 per cent of Kenyan adults with internet access are using some form of online service, with nearly two-thirds paying to view digital online content.
Ninety-four per cent watch some digital video on YouTube. In the subscription video on demand (SVoD), users aged between 16 and 24, spend a whopping seven hours and 41 minutes a day viewing video.
“Social media and search engines are changing the ways big brands do their marketing, and entrepreneurs in East Africa are also starting to catch on. Twitter, Facebook, Google and other online services offer a range of affordable and even free ways to promote your goods and services. They also offer you easy-to-use analytics tools so that you can track your performance,” says Ms Summers.
The cost of infrastructure is no longer a big issue for business. There is no longer a need to have a room full of expensive servers and computers, pushing up the cost of rent and security with the onset of cloud.
Ms Summers says cloud apps are usually sold on a per-user, per-month basis, so users do not need to find a lot of cash to pay upfront for a software licence. You can get an online accounting solution for under Sh1,300 per user per month - which can save you hours of your time each month. Devices such as smartphones are also more affordable than ever – you can get a usable device for under well Sh10.
“The barriers to entry are quite low, given the benefits technology can offer,” she adds.
Local firms including East Africa Online Transport Agency which uses the internet to link trucks and people who want to transport cargo have reaped the benefits of the digital disruption. Their continued growth and interest in technology adoption has been at the forefront of warming up the market to endless possibilities of technology as well as operating remotely.
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