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Digital Predictions For Kenya In 2023

For the last few days, I have been mulling over what could happen in Kenya from a digital perspective in 2023. I have done this in the past quite a few times at the start of each year and there have been lots of hits and misses but ultimately, it makes for an interesting read, if nothing else.

So, here are my digital predictions for Kenya in 2023:

Digital Transformation Continues To Accelerate Across The Board For Businesses & Brands Of All Sizes.

Digital transformation has become a common buzzword globally and in Kenya since the advent of the COVID-19 pandemic almost 3 years ago. As things stand, many Businesses in Kenya saw a seismic shift in not what they do but how they do it by leveraging digital channels and processes. This saw businesses adopt work-from-home and hybrid working models, e-commerce integration for online sales, digital advertising to generate sales, business process automation for back-office operations, etc.

In a nutshell, the majority of businesses in Kenya have been digitally transformed in a myriad of ways to date that has helped many become even more viable by optimizing how they operate across the board. The next iteration for 2023 will see businesses implementing more digital transformation initiatives that enable them to build their brands, streamline operations, enhance services and increase revenues as the main thrusts.

Digital transformation in the context of Kenya for businesses means that a big part of their various initiative will have mobile at the core since this is the touchpoint that can reach customers, partners, and employees at scale.

Existing & New Automotive Brands Launch Electric Vehicles In Kenya

One of the things that happened in Kenya in 2022 is that we saw what appears to be the start of an electric mobility revolution with the advent of electric buses, cars, vans, motorcycles, and tuk-tuks all coming to the market via a number of innovative startups in the marketplace.

Already, Hyundai is selling its KONA model in Kenya and this may well have been the first electric vehicle (EV) to be sold locally that is brand new and is supported by a major global automotive brand. At the same time, China’s JAC Motors is also selling their EV Pick-Up Trucks in Kenya which like Hyundai has sold several units to KenGen for their corporate fleet.

It stands to reason that going forward in 2023 we should expect other major global automotive brands already operating in Kenya to also launch their own EV models here too. Brands like Nissan come to mind since the Leaf has been a successful EV model globally for years and we can see quite a few used ones on the roads in Kenya.

Volkswagen is another global automotive brand that has already built up an impressive roster of EV models that has a presence in Kenya through their dealership partners so this should be relatively straightforward for them to bring to Kenya. Other EV brands that could enter the market for the very first time with a strong line-up could be China’s BYD which is already supplying electric buses to BasiGo in Kenya.

Electric Vehicle (EV) Charging Stations & Battery Swapping Centres Proliferate.

One of the key factors to mass electric vehicle (EV) adoption in Kenya will be easy access to charging stations and battery swapping centers. In the former, KenGen has already implemented two charging stations in Nairobi and Naivasha as of this writing and has plans for a further thirty charging stations throughout Kenya by the end of the year. In addition, several malls in Kenya like Two Rivers and The Waterfront have charging stations in place from companies like EV Chaja.

What is critical to note is that one of the reasons Tesla has been so successful in North America, Europe, and Asia is due to their Supercharger fast-charging network. Tesla’s supercharger network that ensures car owners can travel short and long distances with the reassurance that they can recharge quickly and within close proximity of wherever they are.

In Kenya, in addition to the proliferation of EV charging stations, another aspect that needs to happen is networks of battery swapping centers for electric motorcycles and tuk-tuks which can be expected to become quite mainstream in Kenya this year given that startups like ROAM and others are working to build out this infrastructure.

There are many EV startups in Kenya that are targetting the public transport sector for electric motorcycles or ‘boda bodas’ so what is clear is for these to be successful there needs to be a more practical approach to getting them to operate that EV charging stations cannot meet. Battery swapping makes sense and this will clearly take off going forward for the public transport EV market in Kenya.

Affordable Off-Grid, Renewable & Clean Energy Solutions For Homes & Businesses Gain Adoption Due To Rising Costs & Sustainability Considerations.

Any business or consumer today looking at their monthly expenditure for electricity from Kenya Power will tell you that it’s become incredibly expensive compared to just a few years ago. Coupled with the current ongoing war in Ukraine as well as other global macroeconomic factors that have seen the price of oil and gas rising, consumers and businesses in Kenya are looking at off-grid and renewable energy solutions that can help them save on costs and even generate income.

As things stand, the cost of deploying solar energy solutions for instance has become attractive as the technologies become more widespread and affordable. We are also seeing companies like Koko Networks who have built energy-efficient and affordable ethanol cookers and a retail network targetting low-income customers at scale who want clean and affordable solutions — these solutions will also appeal to middle-class consumers going forward. Companies like M-Kopa offer affordable pay-as-you-go (PAYG) lighting solutions to consumers in rural Kenya but these same offerings are just as appealing today for the urban dweller as well.

More and more businesses in Kenya are investing in enterprise-grade renewable energy solutions that enable them to run their operations in a more cost-effective and sustainable manner as part of their environment, social, and governance (ESG) agenda. Basically, we are going to massive uptick in these trends going from an energy optimization perspective for consumers and businesses in Kenya from 2023 at scale.

A Challenging Global Investment Environment Leads To Consolidations In Kenya’s Startup Ecosystem As Well As Startup Closures.

As things stand today the global economy is seemingly headed for a massive recession. This trend was accelerated by the war in Ukraine but the signs had all been there after over a decade of continuously good times as far as startups and investments have been concerned.

Things have taken a dramatic turn for the worse in the last half year or so as startup funding dries up and investors hold back as they ride out the tougher economic environment we are currently operating in globally. As a result, Kenya has felt this impact in the technology startup ecosystem across all aspects with the exit or closure of startups like Kune Foods, SkyGarden, Nopea Taxies, SWVL, and others.

In a constrained startup funding environment for Kenya for the foreseeable, I can see two certain outcomes. One is that startups that are competing for the same markets will have to look at consolidating to build scale and market share in as short a time as possible whilst taking austerity measures to ensure profitability is achieved sooner rather than later as dictated by investors.

Startups that are unable to scale quickly and operate sustainably with limited funding will end up being acquired or in the worst-case scenario shutting down altogether. It’s already happening in the market and only time will how bad the fallout will be. That being said, the Kenyan startups that can weather the storm will come through this challenging period much stronger for long-term success.

Data Privacy Cases & Fines Escalate As The Office Of The Data Protection Commission (ODPC) Takes Action.

Ever since Kenya’s Data Privacy Act came into place in late 2019 things have been moving quickly towards a market environment that is clearly no longer business as usual as far as data privacy is concerned. The Office of the Data Protection Commissioner (ODPC) which has the mandate of handling all matters of data privacy has become increasingly busy as it flexes its muscles in addressing complaints and ensuring that businesses are compliant with Kenya’s data privacy laws.

The latest instance of non-compliance affected OPPO Kenya which was fined Kes. 5 million for using someone’s likeness in an Instagram campaign — this is just the tip of the iceberg and my prediction is that there will be a tsunami of cases and fines in 2023 for non-compliant data privacy behavior meted out to businesses of all sizes.

One major concern I have for the future of data privacy compliance in Kenya is that of small businesses. Indeed many small businesses may not have a full understanding of what it takes to be compliant and may simply not know what they don’t know in this context. I predict many small businesses will get a rude awakening in 2023 if they do not spend time and resources to ensure that they are compliant in the eyes of the ODPC.

The same also applies to agencies and third parties who handle consumer data on behalf of clients who will need to really bone up on all the data privacy laws and guidelines so as to ensure that their clients and their customers are not at risk in this regard.

Airtel Kenya, Telkom Kenya Or Jamii Telcom Launch 5G Services.

The investment required to roll out 5G is massively expensive which is why only Safaricom has managed to do so in Kenya as the largest mobile network in the country. That being said, now that Safaricom will aggressively expand their 5G network nationwide in Kenya from 2023, it seems only logical that Airtel Kenya, Telkom Kenya, or Jamii Telcom also launch some kind of 5G offering this year to remain competitive. 

I suspect that any of these mobile networks will do so in a limited manner targetting major cities and towns for the same. It is also possible that they will enter into some kind of infrastructure-sharing arrangement so that they can overlay all their networks via the same to make it more affordable for all the parties involved.

One saving grace though is that 5G services globally are still very nascent and it’s going to take years before they achieve widespread coverage and mass consumer adoption so there is time for this to really take off. Secondly, the availability of affordable 5G enabled devices is still very limited in Kenya so it’s going to take years as well for this to go mainstream from this perspective. Whatever the case, we can expect at the very least a second 5G network in Kenya by the end of 2023 that will compete with Safaricom’s.

Telkom Kenya Gets A Private Sector Investment After Being Acquired By The Government of Kenya.

Telkom Kenya has always been referred to as the sleeping giant given the massive resources and telecommunications infrastructure it has had at its disposal for decades. Telkom Kenya entered into a partnership with France’s Orange and later with Helios Investment Partners before it was nationalized again in late 2022 when the Kenyan Government re-acquired 100% equity in the business.

The reality is that Telkom Kenya is nowhere close to giving Safaricom a run for its money at this time and my sense is that even though they have a great leadership team it’s going to take the input of a private sector business to make it really take off!

Going forward, in 2023, I foresee Telkom Kenya going into partnership with a global player in the mobile networks space. Top of mind for me would be a company like MTN that has enjoyed serious success in markets like Uganda, South Africa, and Nigeria. If MTN could be aligned with Telkom Kenya that could be a whole new ball game in terms of what Telkom Kenya can become.

MTN is obviously one of any number of successful global mobile networks that could invest and run Telkom Kenya but I see them having the right DNA to make a serious go at it. Barring getting an additional private sector investor involved in Telkom Kenya, it seems hard to imagine that they can do it on their own as they are today, fully owned by the Kenyan Government.

The Return Of Work-At-The-Office For Everyone & Every Business.

One of the things that the COVID-19 pandemic taught us is that work is not a place you go to, but rather a thing that you do, wherever you are and however you choose to do it. This paradigm has served us for close to three years globally and even today in Kenya a good number of local and international businesses and organizations continue to operate with the work-from-home (WFH) model for remote working as well as the hybrid model where employees do work from the office as well a few days a week.

The big shift I am seeing happen in 2023 is that more and more businesses and organizations will start shifting back to the pre-pandemic work-at-the-office (WATO) model on a full-time basis. If you speak to many business leaders today you will invariably hear that there is a general consensus that there is something missing from the quality of work as well as their culture due to the WFH model. People are simply not as connected or engaged in their work and organizational culture as they used to be pre-pandemic and as a result, many business leaders in Kenya are determined to get their teams back in their offices on a full-time basis from 2023.

Naturally, there will be pushback for those employees who have become accustomed to WFH for almost 3 years and some may even resign when this happens eventually but I don’t see things staying the way they are indefinitely now that the pandemic that started it all has essentially ended.

Legacy Media Companies Innovate, Consolidate, Or Go Out Of Business.

Kenya’s media landscape is undergoing a massive level of digital disruption. Late last year we saw a good number of legacy media businesses announce massive layoffs and cost-cutting measures. Major advertisers no longer run massive campaigns via legacy media channels like print, radio, and TV and as such advertising spend has dropped significantly for the majority of the well-established media businesses in Kenya. Many of these businesses started operating in a pre-digital era when everyone read newspapers and rushed home in the evenings to catch the 7.00 pm and 10.00 pm news hours. This is quite simply no longer the case in Kenya where the typical consumers get their news via social media and WhatsApp on a daily basis.

Digital-first media consumption has become one of the major trends accelerated by the COVID-19 pandemic in Kenya and as a result, traditional media businesses are playing catch-up as they try to find viable business models for this new context. Many are hopelessly ill-equipped to take on emerging and nimble digital-first media upstarts in Kenya that offer the latest consumer focused content online via their own platforms as well as social media that enable them to scale and reach millions of customers cost-effectively, and profitably, without the luggage of traditional media channels to weigh them down.

The reality going forward for many legacy media businesses in Kenya is that they really only have two options. In the first instance is that they need to consider reinventing their businesses from top to bottom to be compatible with both the digital-first Kenyan consumer with a bias to Millenials and Genzers, as well as the advertisers who are looking for engaging advertising offerings that will resonate with these consumers at scale. The second thing legacy media businesses in Kenya need to look at is how they can consolidate their businesses where possible whilst shedding off non-essential offerings that could be profitable at this time but are likely to lose steam within the next few years by becoming irrelevant. The last outcome is going out of business altogether! In 2023, I see these three scenarios playing out for legacy media companies in Kenya.

Consented First-Party Data Investments & Practices Grow For Businesses In An Increasingly Privacy-First Kenya.

Data privacy has become a major area of concern for businesses globally. However, as mentioned earlier, data privacy in Kenya is still very much in its nascent stages. There is an oft-said statement that data is the new oil that everyone seems to be quoting these days. Nothing could be closer to the truth except that consumer data also needs to have consent.

The big paradigm shift for 2023 in Kenya will be that businesses need not only be compliant with local and international data privacy laws, but they also need to ensure how they source, store, manage and use customer data is on a first-party basis. This is important so that businesses and their customers as well as their prospects are in a consented relationship as far as their data is concerned. There needs to be full visibility and traceability as to how their data was acquired, how it is being used, and not to mention that it can be deleted if they so wish at a future date.

As big tech companies like Google, Facebook, Microsoft, and Apple gradually reduce the ability for businesses to access and use third-party customer data on their platforms, consented first-party data will become an area of focus for businesses in Kenya from 2023 as a means of marketing and sales, as well as serving customers better, faster and in a more personalized manner, leading to better business results.

The post Digital Predictions For Kenya In 2023 appeared first on Innovation Village | Technology, Product Reviews, Business.

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Digital Predictions For Kenya In 2023


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