This archive report was first published on 3 July 2021.
Amid the COVID-19 pandemic, Kenya's small and medium enterprises (SMEs) have gone digital to boost their market share and grow sales. A recent report by think tank Genesis Analytics found that a combination of affordable devices, a young population, and a diverse economy can create a thriving ecosystem for entrepreneurs in the country to grow their businesses despite existing challenges.
According to the report, Kenya ranked highest in Sub-Saharan Africa in digital skills such as computer literacy, basic coding, and digital reading. The report noted that while the world median score in 2019 was 4.2, sub-Saharan Africa's median score was 3.7. Kenya ranked 48th out of 141 countries in the global rankings for digital skills, while South Africa ranked the lowest at 126.
Programmes like the State-run Ajira Digital Skills programme have seen thousands of young entrepreneurs receive training, mentorship, and online work placements. The government is looking to expand the same to universities and colleges.
Business owners leverage on data and creative information generated by and shared on social media platforms that is relevant to their enterprises to find new customers and markets. Applications such as e-commerce, digital payment, and communication tools facilitate digital transactions and cut high administrative costs that many small businesses find prohibitive.
While some business owners rely on digital marketing, others use it to complement offline traditional marketing. Peter Kabugi, founder of SmartPic Productions, a firm that produces audio visual content for both individual and corporate clients, says social media is useful for boosting their online presence but only to a certain extent.
“A lot of our new business comes from referrals where people we’ve done work for in the past refer their friends and family to us,” he explained. “We have a large portfolio of work we’ve done and we put some of it on Facebook so when people search for our business they can see what we’ve done.”
However, some businesses are unable to tap into the opportunities that platforms such as Facebook, WhatsApp, and Instagram have to offer due to several limitations. Problems with network connectivity and device access usually manifest in affordability constraints, the report stated.
Of the 500 businesses surveyed in Kenya, 23 per cent cited the cost of internet usage and mobile data as the limiting factor to digital marketing while 16 per cent stated that mistrust for the platforms is a hindrance. The report recommends policy interventions by the government to assist bring down the cost of digital tools, including low or zero-rated taxes on internet usage and mobile data as well as incentives for companies putting up digital infrastructure in rural areas.
