Article written by Samantha Kipury, Managing Director for Carat Kenya
The Kenyan market is witnessing various major disruptions on the digital front, similar to other African markets which are being driven mainly by the surge in availability of affordable smartphones, increased internet penetration, mobile money, e-commerce, social media, digital migration to name but a few. Whilst these factors can be traced back to the increased uptake of smartphone devices and availability of mobile broadband, usage of both social media and mobile money have become global phenomena that have attracted the world to the East African powerhouse to learn how these innovations can enable traditional businesses to be more seamless and efficient.
Smart phone usage and mobile penetration have been driven by a host of factors such as the availability of cheaper devices, drop in prices of mobile broadband and government policies that encourage the growth of the ICT sector. The Kenyan government for starters in 2012 waived tax on various ICT products and software that enabled the country to leap ahead of its peers. The introduction of cheaper (under $100) handsets by manufacturers from India and China further enabled segments that could not afford the devices to be connected. Prior to this, the government had already readied the market for the smartphone revolution with the arrival of more internet capacity through two submarine fibre optic cables TEAMS and EASSy. The availability of affordable devices and affordable mobile broadband has allowed Kenyans to easily access social media, participate in ecommerce and further expand in the area of mobile app development allowing for new ways for brands to reach consumers and contributing greatly to creating the dynamic, exciting and limitless opportunities found in the Kenyan market today.
Although details on exactly how many smartphones are in Kenya is not available according to the latest Communications Authority of Kenya (CAK) statistical report for April to June 2016 there are 37.7 million internet subscribers a majority of whom access data through smartphones. Another report by the Ericsson ConsumerLab, TV and media report 2015 put the smartphone penetration in Kenya at seventy percent or an estimated 30.8 million devices going by the CAK report which shows that Kenya has a mobile penetration of 90 percent or 39.7 million mobile devices.
Data affordability continues to be a hindrance to the number of Kenyans accessing the internet despite the availability of smartphones although new innovations by carriers to bundle data alone or with airtime is having an impact. Currently the cheapest bundled offering in Kenya puts the cost at less 1 shilling per 1MB where 50 shillings gets the subscriber 20 minutes of airtime, 100MB of data and thousands of SMS. This is however higher than what it costs in internet cafés as just 30 shillings will get you unlimited data for one hour. In 2017 we expect to see more bundled offerings that encourage the use of data over mobile with internet usage contributing significantly to the providers bottom-line.
Going forward brands must then be cognizant of these changes in the market and tailor-make campaigns that will reach their consumers with the aid of these technologies. Brands will need to provide content that is realistic of this new breed of consumers who are more exposed, better connected, more vocal and more empowered and with increasingly infinite choices.
Aided by mobile money and internet banking businesses, Kenyan businesses have opportunities that even their peers in developed nations lack when interacting with their consumers.
Mobile money, for example, has taken out the expensive infrastructure that businesses formally had to invest in, to accept other forms of payment other than cash with various telecom operators in Kenya offering diverse solutions. Just recently telecoms have even taken out restrictive charges on smaller transactions that attract more people to use this innovation.
In the last quarter of 2015/16 the CAK report shows that there were 227.3 million mobile commerce transactions made which translated to the cost of goods and services valued at Ksh. 404.1 billion purchased. The person-to-person money transfers recorded in the period was valued at Ksh. 429.4 billion.
While mobile money has solutions for business to business trading, internet banking offers a solution above mobile money that allows for transactions globally further extending the efficiency of cash transfers. As a result of these changes in the Kenyan market there are a number of innovations such as online shopping that have become popular, with consumers having the liberty of purchasing goods and services and paying for them remotely. New companies that were not household names locally five years ago such as Rupu, Kilimall, Jumia, Yum, Hellofood and OLX just to name a few are clear testament to this.
Come 2017, there will be a huge opportunity for businesses to integrate their brands into developments such as mobile money and home deliveries that will allow the growing middle class to access their goods and services at their convenience. To this end, there is a move by a number of retail stores to begin home deliveries motivated by the success of online shopping and projections showing that e-commerce will outpace brick and mortar in Kenya within the next decade.
This new technology has reshaped the way marketers reach their potential clients through consideration of the four main factors: Price, Product, Promotion, and Place with this strategy reorganized to stand for: brand for product, social media objectives for price, platform for place and messaging for promotion. Social media while allowing brands to reach a bigger market as earlier discussed further offer alternative cheaper, measurable and achievable options. The secret many pundits will point out is creating the right content and delivering it at the right platform and at the right time. Already a number of big brands have integrated social media into their business mainly in the media, financial and services sector where technology has been utilized to modernize customer service and information dispensation.
In 2017 social media will shape conversations especially on the political front where various politicians, who are also brands representing their parties and financiers, have immersed huge populations to follow their accounts. President Uhuru Kenyatta, for example, has more followers than the major companies in Kenya well ahead of Safaricom, Airtel and Kenya Power and just like in the US elections, social media is expected to shape conversations during Kenya’s campaign period outside the traditional press with the advantage of the brands being able to access them at will and at lower costs.
Although social media will show what younger Kenyans are thinking and feeling about the upcoming election, this does not necessarily translate to how they will vote. During the last election, Peter Kenneth and Martha Karua had the highest number of likes on Facebook, as well as the most engaged posts, however, it was President Uhuru Kenyatta who won the election. A similar situation happened in the US where Hilary Clinton had the most positive sentiment on both social media and media, however it was Donald Trump that won the election. The reason for this is that firstly, social media in Kenya while growing, still represents a small fraction of the voting population in the country. Secondly, people will often say they will vote for the candidate that seems to be more popular, but actually sign the ballot for who they connect with as a leader – whether that is based on policy or other strong affiliations.
That said brands can creatively plunge their messages in all the noise as was utilized by the American series ‘House of Cards’ series to gain mileage from all the noise. Whereas if not well utilized this can be catastrophic, brands must focus their campaigns to where the audience is.
In 2017 the social media political space is expected to see more bloggers and other twitter and Facebook heavyweights engaged to push the ratings of various candidates especially in the presidential category. Already the view is that a number of staunch anti-government bloggers have softened their criticism and in other times even began to critic the opposition. There has even been a rumor that the government had in 2015 engaged some 36 bloggers to drive pro-government sentiment and fight the anti-government online war in the past, if this was true then 2017 is the time to go full throttle in this online offensive.
From a marketing/branding perspective the digital migration that occurred in 2015 was both an opportunity and a challenge at the same time. As an opportunity brands that concentrate on segmented age groups can now target specific demographics and professionals such the youth, toddlers, mums, farmers, etc. As a challenge companies/brands that have products that target the general audience are now forced to market on multiple platforms leading to increased expenses amid decreasing marketing budgets. Going forward brands need to identify platforms and space at the right timings as on when they can garner maximum impact which is possible using the right analytic tools and proper interpretation of insights.
With smart television and the growth of video on demand brands will need to be more creative where they will have to embed their campaigns into content as the audience can now choose to do away with advertisements many of which they deem intrusive. There are however numerous ways to still reach out to this group mostly millennials with the merging of content and campaigns such as including them on music videos and recipes on the rise.
We will also expect more livestreaming on various platforms such as Facebook and YouTube for various major events offering new platforms to place campaigns that could reach bigger audiences.
Other global trends
Recognizing that we live in a global village we expect various global trends to slowly start catching up locally such as the internet of things that will see our world interconnected between devices, data and processes making our lives more efficient. Smartphones are currently driving this trend. Cost and ransomware are currently acting as the main inhibiting factors to the faster adoption of this trend.
Other worldwide trends include machine and deep learning currently being spearheaded by Google and Amazon in other parts of the world where driverless cars are currently being tested and the Amazon recommendation engine by the latter. Virtual reality is also a growing trend though catching slowly locally with new age video gaming and virtual reality glasses expected to speed up consumer adoption. Robotics whereas big elsewhere, is yet to pick up largely due to the lack of resources needed to fund their research. However, all is not gloomy as countries in Africa have begun embracing robotics. Liberia, for example, where TRU-D the first automated room decontamination machine was used to aid in the battle against the Ebola virus outbreak at JFK and ELWA hospitals. In the Democratic Republic of Congo, two solar powered robocops are being used to help in controlling traffic and in South Africa where robots will soon be used to evaluate the safety of mines.