December 04, 2020
How small businesses can benefit from the digital economy
By Francis Wainaina, SEACOM East Africa Senior Product Manager
The digitalisation of the global economy has changed how everyone does business. While multinational enterprises are innovating their worldwide operations, small businesses are faced with a unique set of challenges – and a wealth of opportunities – when it comes to adopting digital platforms and business models.
Despite limitations when it comes to financial resources and economies of scale, small businesses in Africa can innovate and stay ahead when it comes to digital trends.
The benefits of taking small business online
Technology can improve growth and productivity for small businesses, as well as customer experience. Incorporating features like online ordering, appointment making, and live chat can make interactions quick, easy, and convenient. And customers are more loyal to the companies that make things easier for them. Having a website that has these functionalities will often require changes in some business processes, but this will prove to be more profitable and sustainable in the long term to meet growing digital demands.
Since the global pandemic, consumers not only want more convenience but also safer ways to shop. New forms of alternative credit options like ‘buy now, pay later’ are also increasing sales and customer loyalty across Africa. M-PESA, one of the world's most successful mobile money transfer services, has boosted Kenya’s economic development, with estimates showing that 48% of Kenya’s GDP was processed via M-PESA in 2019.
Small businesses can also use digital tech to create partnerships through business-to-business ecommerce. Diversification of suppliers can help source better or more cost-effective goods as well as mitigate out-of-stock risks during periods of high demand.
Digital skills will become more important
Many new and innovative digital platforms and services are now available for small businesses to use. With these tools being introduced at a rapid pace, there is a dire need for businesses to educate their employees to be able to thrive in an everchanging digital environment.
The benefit of bridging the digital gap for employees has a direct effect on the productivity of a business as workers can collaborate more easily, get more done in less time, and use less resources. Digital familiarity also creates a more innovative environment. Providing regular opportunities for staff to learn and develop their technical skills is essential for creating and improving talent and will enable sustainable development for both businesses and employees.
Connectivity and its role in an increasingly digital business environment
As the digital economy grows, so does the need for fast, reliable, and affordable connectivity for companies and customers. According to the World Bank in the Foresight Africa report, giving Africans fast and affordable Internet coverage could increase GDP by 2% per year. This should put digital infrastructure on the very top of our government’s list of priorities.
By embracing new digital platforms, supporting digital education, and building better digital infrastructure, we can – and we will – uplift Africa to a world-class economy. This is why SEACOM is an ideal partner for businesses – big and small – to take advantage of digital opportunities. Contact us to begin your journey.